IRS bounties will be smaller

WASHINGTON – The federal government’s automatic budget cuts mean there will be less financial incentive to turn in tax cheats.

In a notice on its website, the Internal Revenue Service said it would pay 8.7 percent less to informants who blow the whistle on tax-dodging individuals or corporations.

The payments are being reduced because of the spending reductions required by the across-the-board cuts that kicked in Friday.

The IRS pays bounties that can be as much as 30 percent of the taxes, penalties and interest the agency collects in the case. The IRS says it paid 128 whistle-blower awards totaling $125.4 million in the 2012 fiscal year.

For the rest of 2013, the IRS says it will calculate how much money would have been paid to an informant under the previous rules, then reduce the amount by 8.7 percent.