Turning in tax cheats to become more profitable

WASHINGTON (AP) — The Internal Revenue Service is making it easier for whistle-blowers to collect rewards for turning in big-time tax cheats.

The agency proposed new rules today to jumpstart a 5-year-old program designed to entice people to turn in businesses or individuals trying to bilk the government out of $2 million or more in taxes.

The program has elicited a lot of tips but has yet to result in any rewards being paid out.

The IRS issued guidance last summer saying that whistle-blowers could only get rewards if their tips resulted in businesses or individuals paying additional taxes.

The new rules would qualify whistle-blowers for rewards if their tips prevent businesses or individuals from claiming illegitimate tax refunds. Whistle-blowers also could benefit if their information results in a company getting fewer tax credits.

The difference is important because many corporations claim so many credits, deductions and exemptions that they end up getting tax refunds rather than tax bills.