Payoff for Informers

For tips that helped the Internal Revenue Service recover $18.1 million last year, 822 "tax tattlers" earned rewards totaling $565,254. Although payments to tipsters hit an average of $687, reported Commerce Clearing House last week, hardly anyone knows the range of their rewards--except the IRS, of course, which taxes the payoffs. The tax code sets the "normal" payoff as 10% of whatever money informers bring in, but district tax collectors can pay whatever a tip is worth. Moreover, "no unauthorized person shall be advised of the identity of the informant"--a provision which protected the 3,672 informers whose information proved to be worthless last year. Wrongly accused tax evaders have only one recourse: if he succeeds in uncovering the name of the erring tattler, the taxpayer may have a claim for defamation.

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