How to Make Millions as a Professional Whistleblower
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Ah. That's a good method of target selection.
You'd think he'd maybe be afraid of a more...extralegal ending giving the wake of wealthy ruthless people he's Richard Overing
I feel like there was a lot left unsaid in this account, and rightfully so. There’s a conspicuous void in the shape of his recording techniques (or lack thereof), for example; ditto the specifics of the types of malfeasance he goes after.
And while I’m all for maintaining honest norms, it did sound a little bit like he was trying actively to bait his mark into producing fraudulent misrepresentations. That feels a little different from the conventional “whistleblower” notion, of a cog in the machine noticing something wrong and standing up for what’s right. Something a little closer to vigilantism.
But who knows. It’s cool that he was willing even to share this much visibility.
Being a whistleblower only works well if you uncover a scheme that the target already has deployed to victimize other people (or the government). Entrapment isn't an effective tactic.
I had a relative who was a revenue agent with a couple of highly specialized areas of expertise. When he started in the mid-80s, his unit had about 250 agents nationally. When he retired circa 2010, there was 4.
He retired earlier than he wanted because the travel was difficult and he was developing some health issues. The cases they prosecuted were people cheating society out of hundreds of millions, or in one case, billions of taxes. He characterized the scope of what wasn’t even looked at as 15k cases annually where at least $10M of taxes were notn paid. They didn’t even bother to think about anything less than $100M.
We should be vilifying the people doing this. Some of these crooks avoid taxes equivalent to 10,000 or more well paid professional like myself and my colleagues. You also have issues with some cases where the tradition of allowing Senators to nominate US Attorneys and hyper-political judges means that certain crimes are effectively not crimes in certain districts.
I got a letter from the IRS for ~$300. I’m pretty sure the first letter was sent by some automated system of theirs with a bug, and the subsequent letters were some IRS employee trying to cover their ass.
Here’s the sequence of events.
- IRS: You misreported your gain on this one specific trade.
- Me: I checked and the trade is listed with the amounts you claim on the broker’s 1099-B that I sent to you. Here are the 1099-Bs with the transaction highlighted.
- IRS: We’ve already seen your 1099-Bs. Please prove to us the amounts sum to the aggregate.
- Me: Here is a spreadsheet showing all the transactions and the sums.
- IRS: OK OK. What about this other totally unrelated transaction then that is now being mentioned for the first time?
With every single reply, the IRS took months to respond. Each reply was literally just one sentence. They sent me periodic form letters just saying “we’re working on a reply” because apparently there’s some law saying they are required to reply within some number of days. The phone number they provided for me to call was literally just an automated system.
The unrelated transaction was for a huge amount on some stock I had not traded at all. At this point a friend referred me to a tax lawyer who told me to just pay the $300 so the IRS would stop harassing me. Paraphrasing the lawyer: “my rate is a lot higher than $300.”
This incident turned me against the IRS. I’m sorry about your relative but I have no hesitation vilifying them.
In contrast, the CA DMV once sent me a letter asking for $300 because a vehicle’s old registration hadn’t been cancelled. It was a hassle but every time I called in I got a human being, and on the last call the collections person saw the error in their database and fixed it on the spot. Frustrating but not malicious. The IRS on the other hand…
Congress just recently decide to throw the IRS a bone and let them hire a few more people, but they are still chronically under-staffed.
Every time I manage to find a real human at the IRS, they have always been awesome to deal with. If you want to get a real human, the best way is to go to your local congress critter and have them contact the IRS for you. If more people do this, it also helps incentivizes Congress to eventually properly staff the IRS..... hopefully.
I actually had to contact the DMV the same number of times to get my problem resolved, but at least they didn’t make up a new justification for the discrepancy after abandoning their first attempt.
Your tip to contact my congressperson is a good one and I appreciate it. As a high schooler I interned as a legislative aide so I know that calling in does do something. But I think my faith in the IRS was too high before this happened; I never thought they’d do something like this.
If you have literal IRS agents showing up wanting their $300, I'm seriously surprised. I'd recommend you verify they really are IRS agents and not scammers.
You should just pay the $300 and move on with life though. You will spend more than $300 of your time/energy trying to convince the IRS you don't owe it(assuming you feel that way).
In general the IRS is very forgiving and tolerant up to a point, but eventually you get put on their naughty list. Much like a sleeping giant, they are happy to snooze away for a decade or so most of the time, but eventually they wake up and get angry. You never want the IRS actually angry with you, it almost never works out in your favor.
I'm glad you learned something though: It's not worth fighting the IRS over smaller amounts of money like this if you can afford it.
The DMV is usually properly staffed. The IRS is absolutely NOT properly staffed. That was the point of my first comment.
I approached a major tax accountancy with a simple question. Nobody who's unlicensed will give tax advice: it's radioactive like medical advice, because bad tax advice is dangerous.
So I asked a professional a very simple question, and I got the wrong answer. A diametrically opposite, 100% wrong and COSTLY response, and 3 different pros gave the same answer insistently.
Not believing them, I asked to see it in writing, because the first lady on the phone, claiming she researched it prior, was unable to back it up with a doc or link.
When I demanded an answer from the guy in person, sitting in front of me in their storefront office, he exhibited his maximum competence as "imma google this for ya" and he flailed at a few commercial search engines, with no hope of showing me a clear answer.
I effortlessly found an IRS publication from IRS.GOV, which agreed with my other research and my father's opinion (a finance whiz) and I stormed out of the tax idiot's office, vowing never to approach another human there again.
Their software is fine and works. But if all their humans know is Google, why pay for the privilege of bad advice?
Then add the additional economic activity and fraud vehicles created by the internet. It's a job I admire but do not envy.
Everything also got digitized in that time which is somewhat of a confounding factor.
We should probably be comparing IRS staffing to the fraction of the population employed in the private sector equivalent roles.
The IRS being a large federal agency, it's possible that everything except the IRS got digitized...
Or, you know, the IRS "got digitized". In the 90s / 00s -- so, with humongously clunky systems built by huge consulting firms to the standards of (at least) ten years earlier.
80k new jobs is barely slowing the problem down.
But the IRS spent a year harassing me about $300. If that’s the scale of supposed tax fraud that they’re spending staffing resources on I think their prioritization could be improved.
Meanwhile, the real big tax fraudsters use convoluted bespoke schemes that the IRS's clunky systems can't be ayutomated to detect, so no tickets are raised about them.
That said, it wouldn’t hurt if their customer support division had more resources.
I’m not a defender of the IRS. I’ve worked for my share of large corporate and government bureaucracy. They are dumb organizations if you design them to be. The folks who have controlled the purse at the committee level in congress want that org to be dumb.
I’ve consulted for a few DMVs. Fundamentally, they are tax agencies. They sell stickers and plates. They are unique, however, as they are one of the few state level organizations that directly interact with the entirety of the public. They often do a mediocre job, but they see themselves as customer service orgs and make effort to give you a positive experience. Most states have governance structures where individual legislators cannot micromanage agency functions as well.
It's such an impulsive, nearsighted, and frankly child-like reaction.
The situation that we actually have is like if a one stoplight town is setting a speed trap because they need revenue.. but they target only old broken minivans going 5mph over, because they know corporate trucks and private red sports cars going 20 over the limit are more likely to have lawyers that buck the speeding ticket, and cost the town revenue instead of collecting it. Is adding more cops to pull over more old minivans really going to help the town buy a public park, or stop sports cars from speeding? It’s not only unfair, but also completely ineffective.
Staffing/funding is always going to be a bullshit complaint because structurally, enforcement quotas and complex compliance requirements are always going to tend to create a preference for bureaucracies to punch down at soft targets. Similar to how militarizing police doesn’t actually help fix problems with law enforcement, adding additional “support” (ie weapons) for other institutions that have fundamentally broken politics/policies is not a good idea.
Enforcement is like fixing shipped code - expensive and difficult. Effective enforcement shapes people’s risk assessment and behavior. You need to work the middle of the bell curve so that people believe there’s risk.
It’s funny… the people who push the “starve the beast” agenda want to “back the blue”, as long as they are looking in the direction they prefer.
With few resources the wrong people are targeted and I think that’s well established
https://www.forbes.com/sites/eriksherman/2023/01/29/the-irs-...
With more resources, there’s every reason to believe that more of the wrong people will be targeted. Why would you believe otherwise?
And, surprise! -- the new player still has tailored suits, and expensive status symbol wristwatches, goes to expensive hotels for "fun", etc.
Newly aspiring player image types should start buying things from GQ advertisers.