A Scheme to Stop Tax Cheating
The Treasury, I read in Forbes recently, has proposed requiring businesses to report any purchases over $600, so the IRS can check that the seller reported the revenue. That is quite an administrative burden. What could we do instead?
How about saying that if a business reports a purchase to the IRS and it turns out that the seller didn’t report it, then the business gets a payment from the IRS for helping catch a tax cheat? We could at the same time use the stick as well as the carrot. If the IRS finds a tax cheat seller, and then finds that the purchaser did not report the purchase, then the purchaser is fined.