China Relies on the Death Penalty to Secure Tax Compliance. The IRS Pays Cash Rewards to Whistleblowers.
[Updated May 2020] It’s a rainy day in Macau, a former Portuguese island colony off the coast of China. My work as an asset protection and asset (fraud) recovery lawyer frequently takes me to interesting spots in the world. This week is no exception.
Many nations are popular for Americans seeking to diversify their banking risks and protect their assets from creditors. Some Americans flee to foreign lands to avoid extradition on tax evasion charges. Two years ago I defended an individual kidnapped from Panama back to the U.S. to face such charges. No nation is as extreme as China, however, in its zeal to prosecute tax cheats.
Most civilized countries do not criminalize violations of the tax code. The U.S., of course, is an exception. Fail to pay your taxes in most nations and the tax authorities might be able to take your home, take your car, seize your bank account and maybe even take away your livelihood. But in most nations, they can’t take away your freedom. The United States and China are not so progressive.
The headline in the Macau Post today is China’s plan to scrap the death penalty for economic crimes. According to Amnesty International, the Chinese courts execute more people than the rest of the world. Some estimate over 5,000 yearly.
Presently an incredible 68 offenses carry the death penalty in China. Included are crimes you might expect such as murder and robbery. But China uses the firing squads and lethal injections for such crimes as drug trafficking, tax evasion, organizing prostitution and spreading rumors during wartime. That’s right, tax evasion can land you in front of a firing squad in China. [2020 update: now “just” 46 offenses are punishable by death.]
The U.S. may be more zealous than most other nations in prosecuting tax cheats but only China can give the death penalty for such an offense, although that is likely to change.
Failing to file returns, pay taxes or filing false returns is risky business. Defrauding Uncle Sam will not subject you to the death penalty but it may land you in jail.
For those tax cheats seeking exile in Macau, don’t worry. The death penalty has long been abolished here. In addition, there is no formal treaty governing extradition for tax cheats, although as western money pours into Macau, so does the reach and influence of Uncle Sam.
IRS Whistleblower Rewards for Tax Evasion
Even with the threat of prison, tens of thousands of Americans continue to engage in criminal tax evasion. They obviously think they won’t get caught. Many don’t get caught but those that do can often thank whistleblowers.
No one likes paying taxes. We like tax cheats even less, however. For every dollar that a tax evader doesn’t pay, the rest of us have to make it up. Under the IRS Whistleblower Program, whistleblowers with inside information about people and companies who aren’t properly reporting or paying taxes are eligible for cash rewards. The IRS pays to whistleblowers up to 30% of whatever it is collected from the wrongdoers.
In most cases the whistleblower can remain completely anonymous.
To learn more, visit our IRS whistleblower page. Ready to see if you are entitled to a reward? Contact us online, by email or by phone at 800.669.7782. Cases accepted worldwide. No fee unless we recover money on your behalf.