It (the IRS) pays to be a snitch

It's tax time again and, during a recession (or whatever it is we are still in at the moment) the temptation to leave out a little income or inflate a few deductions on your tax return is as strong as ever. But, those thinking of doing so should heed the warning in this CNN/Money report about how the IRS encourages snitches.

If you knew coworkers, former bosses or exes who cheated on their taxes, would you turn them in? The Internal Revenue Service can make it worth your while.

As tax season nears, we all want to get as much money back from the IRS as possible. And while taking advantage of this year's new tax breaks will put some extra money in your pocket, snitching on a tax cheat could make you rich.

In a recent poll from the IRS Oversight Board, 13% of those surveyed think cheating is acceptable, up from 9% in 2008. As the recession puts the squeeze on household finances, the lure of fudging on a tax return is even greater.

"In a down economy, the temptation to cheat on taxes is much stronger because people are in more desperate situations more often," said Bill Raabe, a tax expert at Ohio State University's business school.

More people may be just as desperate to turn in a business, rat out an ex–spouse or report a colleague to collect a reward.

For those who have fudged their taxes, it's probably not a good idea to talk about it.