Would you rat on your company to the IRS for a share of the proceeds?

Many would, apparently.

The IRS’s latest (2006 vintage) whistle-blower rewards program is doing good business and boosting the coffers of law firms and government alike, CNNMoney reports today.

Staff reporter Blake Ellis quotes law firm owner and ex-DOJ trial attorney Paul Scott: “The volume of claims and/or tips [the IRS] has been receiving with really substantial documentation or support has increased dramatically since the inception of the program.”

And you thought the joy of being an informant was something reserved for disgruntled Sicilian mobsters and the citizens of Stalinist regimes? Actually it’s as American as brownies. The IRS has been running informant programs for more than 140 years, according to Ellis.

The program has had its critics in recent years, as I noted here. But it sure saves the IRS a lot of grunt work. In a June 2006 report, the Treasury Inspector General for Tax Administration noted that “our analysis of IRS data indicated that examinations initiated based on informant information were often more effective and efficient than returns initiated using the IRS’s primary method for selecting returns for examination.” ###