I know, I know, "bounties" are a fraught concept. Some people find "snitching" odious. But this is a tantalizing use case. All the author of this piece got out of their legwork was another article, but it also yielded some money for the federal government:
> Two days after I emailed Finwall in April inquiring about the Xie Foundation’s purchase of the house, the foundation filed records with the California attorney general’s office, stating that it had “discovered a self-dealing event” and including a federal tax return with the word “amended” handwritten at the top. In his email to ProPublica, Finwall said that, after amending its returns, the foundation “paid some excise taxes related to Mr. Xie’s stay at the property.”
Maybe we can give 1% of the recovered tax to forensic accountant bounty hunters willing to vet the appropriate nonprofit filings. As is, the IRS seems under-resourced for this kind of work, and there's no real incentive for anybody else to do it unless they're a journalist -- and you can only write this kind of story so many times. Maybe each submitted case costs $100 or some other fee sufficient to deter spammers. I strongly suspect there's a class of feisty semi-retired accountants who'd be happy to spend some of their golden years on this kind of thing. If we're worried about small nonprofits, we can set a minimum claimed deduction that's subject to a bounty.
Cool! It looks like the SEC whistleblower program has more generous terms than 1% [1]:
> The Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected.
Submitting a tip appears to be pretty simple, too. If you want anonymity you'll need to go through a lawyer, but other than that, it's just a web form [2]?
> If you want anonymity you'll need to go through a lawyer
Sounds like a business opportunity then — the company just needs a lawyer on staff. Whistleblower fields the company with a tip, company splits the SEC reward with the whistleblower, maintains anonymity.
Sadly this is the type of bounty hunting that seems quite likely to get a bounty placed on one’s own head. Making a career out of angering the rich and powerful by going after their money isn’t likely to end well.
> Both the $200 million CFTC award and the $279 million SEC award involved individuals who blew the whistle after the agency had already begun to investigate the misconduct at issue.
Another thought: What if all corporate accountants were required to be government employees? We can start with transnational companies first. Then LLCs and Incs.
Disincentivize the massive fraud that we see today.
I think this would result in really poor accounting since there’s a big disconnect between a government employer and a company being audited and its books kept.
In theory it works because the government auditor would be more interested in justice than corporate interests. In practice, an embedded external employee would not have the relationships to have viable information and would probably end up doing only the most perfunctory level of work to not be fired.
My org had this issue where our cyber group embedded an employee in each organization (we basically had a federation of different groups with separate funding streams and incentives) but their career ladders were disconnected from the local org. So the boss in the cyber org never really knew the work and just wanted safety. The org wanted to produce for their mission. So it led to this weird cycle where the embedded cyber person would stop stop every new project. The cyber boss was happy and promoted and gave raises. But it was bad for the org because no new projects.
It depends on whether accountants’ concerns here are about auditing and fining (indirectly) for non-compliance, or if they’re allowed and expected to block projects.
For SEC compliance reporting, I’ve seen banks take it both very seriously and provide the absolute minimum to pass muster such that the COs could barely do their jobs.
What’s clear is that the “same old” and “reasonable” approaches aren’t working, and a disruption is needed.
I have no strong point of view and am interested in why you think safety is okay and financial auditing is not. Are both not about serving the interests of the public?
> I have no strong point of view and am interested in why you think safety is okay and financial auditing is not
1. Real-world data. We all know how it went. Like a scientist, I go by with empirical data when dealing with complex systems that can't impact 100s of millions and not by ideology. The last time a govt audited private financial decisions (and other decisions) was when Soviet Union was alive. Let's do a 5-10 year A/B test and see before making a massive change. (This way we ensure dead sparrows don't cause famines.)
2. Also, why can't the govt clean up its massive fraud and wastage first? Isn't that serving the interests of the public more than political commissars micromanaging every nook and corner of the country? First, the govt should clean up massive fraud wasting tax payer money. Then, lets talk about govt auditing minutiae of businesses. In these kind of threads, there is an assumption that the govt. is 100% efficient. It is not. 2 seconds of digging:
> What if all corporate accountants were required to be government employees?
So then what if a company is seeking to expand internationally, and looking at options for various reasons (including costs, which includes the tax burden). Isn’t it a conflict of interest to have a US government employee weighing in on how to improve a company at the loss of IRS revenue?
And that’s an extreme example. Any company accountant or CFO is going to be involved in regular decisions where “paying less tax” is an important outcome to consider.
Depending on the size of the company, you’d probably need a team; but there aren’t too many companies with a tax attorney on the staff so the accounting team would be doing the heavy lifting.
“The sheer size and scope of the department — which makes up for more than half of the U.S. discretionary spending and has assets that range from personnel and supplies to bases and weapons — makes it difficult to audit. “
“The agency had never expected to pass, however, due to accounting issues officials said could take years to fix.
Because accounting records needed to complete the assessment were not available, all five audits received a “disclaimer of opinion,” though there have been improvements each time. ”
The objection you’ve raised, if anything, highlights the need for a neutral outside party to annually audit and create thorough paper trails for very large organizations.
Do you want to pursue this line of argument further?
I believe that for the most part, those who call the shots in law enforcement prefer that people involved are subordinate to them such that important exceptions can be made when necessary. Getting amateurs involved screws things up, though it would substantially improve fighting crime.
Bounty hunters would still be subordinate to law enforcement in this hypothetical scheme, because a bounty submission still has to get approved by somebody inside the appropriate regulatory body. If a corrupt regulatory body wants to protect certain individuals for certain reasons, they can still do that in this system.
Note also that the scheme I'm imagining doesn't give bounty hunters any special powers; we're not deputizing people to kick in doors. For example, my understanding of TFA is that the journalist built their cases through public information. The only exception was using their journalist credentials to get access to a "museum" -- but in that case, simply being repeatedly denied seems like sufficient evidence that it's not a museum open to the public, so being a journalist wasn't necessary to the case anyway.
It's more plausible to me that a regulatory agency might be too proud to use this kind of help. I have no special knowledge of the IRS, maybe they're in that category.
"In 2021, it was reported that 645 claims were submitted, resulting in 179 awards for a total of $36 million on an additional $245 million collected. In 2020, there were 593 claims and 169 awards for a total of $86.6 million paid out on $472 million in additional collections."
Nice, I was not aware of this. It looks like there are some additional stipulations:
* If the subject of the claim is an individual, they must have $200k+ income in at least one of the relevant years, and the amount recovered must exceed $2mil.
* You can't have obtained the relevant information through your (or your friend/partner/relative's) activities as a federal employee.
* It will probably take about 10 years for the affected party's appeals process to complete itself (see the flow chart on p9 of the linked document, and the chart on p21).
* It also appears that the IRS requires more than the publicly available information described in TFA, as p12 of that document implies that "claims based entirely on publicly available information" are also "non-meritorious". So, the exercise conducted by the journalist appears to not qualify for a reward, even though in at least one of the cases it produced a collection. This bit is unclear to me -- I can't tell if it's just ruling out people who spam submissions saying "public figure X is definitely a tax evader!!!" or if you really need to provide additional non-public documents to get anything. There is a random Forbes article about this [2] that claims "the IRS is happiest when you have first-hand (insider information even better) knowledge of the taxpayer and the tax issues".
But if you jump through all those hoops, you can get 15-30% of the additional money collected. Form 211 itself is pretty short [3].
> Two days after I emailed Finwall in April inquiring about the Xie Foundation’s purchase of the house, the foundation filed records with the California attorney general’s office, stating that it had “discovered a self-dealing event” and including a federal tax return with the word “amended” handwritten at the top. In his email to ProPublica, Finwall said that, after amending its returns, the foundation “paid some excise taxes related to Mr. Xie’s stay at the property.”
Maybe we can give 1% of the recovered tax to forensic accountant bounty hunters willing to vet the appropriate nonprofit filings. As is, the IRS seems under-resourced for this kind of work, and there's no real incentive for anybody else to do it unless they're a journalist -- and you can only write this kind of story so many times. Maybe each submitted case costs $100 or some other fee sufficient to deter spammers. I strongly suspect there's a class of feisty semi-retired accountants who'd be happy to spend some of their golden years on this kind of thing. If we're worried about small nonprofits, we can set a minimum claimed deduction that's subject to a bounty.
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