By: A.J. Cook


Billy W. Jarvis snitched for the Internal Revenue Service and received $1.8 million. He insists that's not enough - - he was cheated.

You're kidding - - would IRS cheat?

Jarvis had a contract saying in exchange for tax information about a family and their businesses, the IRS would pay him a percentage of collections. The amount, on a sliding scale, went as high as 25 percent of taxes collected. Nothing was to be paid for collected interest. The agency also agreed not to divulge Jarvis' name unless required by law or court order.

After the audits and tax collections, the IRS paid Jarvis the award. He howled - -then went to court. These were his complaints:

• One of the victims sued him, and he wanted the IRS to pay his legal expenses because it must have disclosed his name.
  
• Of the amount collected, the agency overstated and allocated too much to interest, resulting in allocating too little to taxes, on which his compensation was determined.
  
• The government should have collected more than $100 million in taxes, so he should receive $25 million - the maximum reward.
  
• These were the courts responses:
  
• The contract did not require the IRS to pay his legal expenses.
  
• The agency's interest calculation was reasonably correct, so the allocation stands.
  
• The contract requires the government to pay based on taxes it collected, not on what Jarvis thinks it should have collected.
  

The snitch lost on all counts, but he still had $1.8 million- - before taxes.

This is an unusually large payment. Last year, a banner year for payments, the agency doled out $8 million in total. This money went to less than 10 percent of those who applied - 517 out of more than 5200. Many applicants hope for a chance for easy money, but only a few supply the IRS with adequate information. A hunch is not enough.

Surprisingly, revenge not profit is the chief motivation for informing. Jilted lovers, fired employees and angry neighbors make valuable snitches.

The Moral: A snitch in time saves US taxpayers money.