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The Jewish Ethicist  - Snitching to the IRS

The Jewish Ethicist - Snitching to the IRS

Law enforcement should generally be left to the authorities.

by

Q. I have a neighbor who boasts that he hides much of his income from the tax authorities. Should I report him?

A. Taxes are as old as civilization; indeed, Oliver Wendell Holmes remarked that they are the price of civilization. We may assume that the first tax evasion followed closely on the first tax, followed in turn by the first effort to detect evaders. Of those tax evaders caught by the tax authorities, most are flagged by routine enforcement efforts such as audits, field officers, and so on. However, a certain fraction are located through citizen reports. For example, in the US the IRS maintains a tax fraud hotline for the average citizen to report suspected tax cheats, and if enough evidence is presented the IRS follows up reports with an investigation.

Most people are reluctant to "snitch" on others, and I think there is a good reason for this. Our democratic system is based on a delicate balance between the freedom of the citizen and the long arm of the law. If freedoms are too extensive and law enforcement hesitant there will be chaos; as the mishna tells us, "If it were not for the fear of the sovereign, men would eat each other alive." (1) But if law enforcement is too aggressive, then we end up in a police state where freedoms are eroded. For this reason, democratic societies have many built-in safeguards to limit law-enforcement efforts. Among these:

  • "Equal protection of the law"; the authorities may not single out particular individuals or groups for selective enforcement. This principle applies also in Jewish law, which holds that sovereign power is legitimate when it is applied equitably. (2)
  • Protection against self-incrimination: In the United States and many other democracies, a person can not be compelled to testify against himself. In Jewish law, this protection is even greater; such testimony is inadmissible even if not compelled. (3)
  • Admissible evidence: evidence obtained improperly is generally inadmissible in court in free societies, to deter overly aggressive investigations.

One additional safeguard is that law enforcement is in normal circumstances left to law enforcers. Of course if there is a clear and present danger every person has a civil obligation to protect himself and his neighbors by reporting on criminal threats. But in the absence of such a threat, the natural balance is generally the best. I presume that if you have a neighbor who boasts that he speeds on deserted highways you don't rush to report him to the traffic police.

To their credit, the IRS itself does not give much emphasis to informants. The IRS site mentions that "if you suspect or know of" a tax cheat, "you may report this activity" – there is no implication of a civil obligation. Based on figures I found on the internet, informant tips lead to recovered taxes of around 100 million dollars a year – out of total tax revenues of about two trillion dollars. So tipsters bring in something like one dollar out of twenty thousand. (That's .005%.) Let us conjecture that by expanding the program they could multiply this by a factor of ten. Is an additional twentieth of a percent of tax revenue really worth the price of creating a culture of suspicion?

Another consideration is that many tax cheats eventually get caught, so there is a good chance that even without your intervention the tax authorities will eventually get their hands on this person's back taxes.

Jewish law explicitly legitimates reporting someone to the authorities for non-violent crime as a civil duty in cases where their disregard for the law constitutes a substantive danger to the community. (4) In addition, a person may be justified in reporting when he suffers directly from the wrongdoing – for example, if he is being driven out of business because a competitor is evading taxes. My view is that in the absence of either of these considerations, it is best to avoid reporting non-violent crimes like tax evasion to avoid any chilling effect on neighborly relations and communications. A few million dollars of lost tax revenue is a very small price to pay for a culture of openness.

SOURCES: (1) Mishna Avot 3:2 (2) Babylonian Talmud Bava Kamma 113a (3) Babylonian Talmud Sanhedrin 9b. (4) Shulchan Arukh Choshen Misphat 425:1 in glosses of Rema.

Send your queries about ethics in the workplace to jewishethicist@aish.com

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The Jewish Ethicist presents some general principles of Jewish law. For specific questions and direct application, please consult a qualified Rabbi.

The Jewish Ethicist is a joint project of Aish.com and the Business Ethics Center of Jerusalem. To find out more about business ethics and Jewish values for the workplace, visit the Business Ethics Center of Jerusalem at www.besr.org.

Published: May 11, 2008


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Visitor Comments: 7

(7) Naftali, May 16, 2010 10:54 AM

Better to do taxes right

My humble suggestion is to use all the available deductions and do your

(6) Jerome, May 19, 2008 7:03 AM

rat

why dilly dally around the issue. Just tell the guy that he shopuld mind his own bussiness. I''ll bet the question is about another Jewish person. Ask him if he knows what a Kapo is?

(5) Jacqueline Mamoni, May 15, 2008 5:57 PM

Did you know --

that personal income tax is not a ratified law? never was. Ask your accountant or tax lawyer this. Also look up Aaron Russo , he wrote a book on it..Gov waste would be a better thing to "snitch" about IMO.ty

(4) Karen Eble, May 15, 2008 6:15 AM

What are you teaching your children?

Tax cheats hurt us all financially. Knowing about it and allowing it to continue, hurts us ethically. Do you really want your children thinking you condone stealing with your ''not my job'' attitude? Do you want them thinking stealing is okay, just because it is a ''small'' amount?

(3) Paul I. Roda, May 14, 2008 9:04 PM

Our Tax Code assumes honesty

and assumes that we are all the government, not the government''s enemies. So when we allow someone to cheat the IRS, he/she is hurting all. The person should be reported. The only real question is whether or not one should be comfortable accepting the reward, or is that money tainted and best given to charity.

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