President Bush signed a new law that will allow whistleblowers who turn in tax cheats to share up to 30 percent of the recovery.
Public Radio’s Marketplace ran a story on the new law on December 21, 2006. One of the attorneys interviewed was Erika Kelton of Phillips & Cohen LLP, who expects that revenues from tax evasion will increase into the billions over 10 years.
The December 20, 2006 issue of the Wall Street Journal (subscription required) reported on the new legislation, saying that lawmakers hope this and other incentives in the legislation will encourage more people to step forward with valuable tips. Congress would like to reduce the nation’s “tax gap,” the difference between what the IRS collects each year and what it thinks it should collect. That gap has been estimated at about $290 billion.