# Crimestopper tip money payout question **URL:** \ **Category:** Factual Questions\ **Created:** [January 30, 2016, 5:13pm UTC](https://boards.straightdope.com/t/crimestopper-tip-money-payout-question/744663 "2016-01-30T17:13:15Z")\ **Posts on this page:** 6\ **Page:** 1
**Author:** ![Lucas\_Jackson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lucas_jackson/32/303_2.png) [@Lucas\_Jackson](https://boards.straightdope.com/u/Lucas_Jackson)\ **Post date:** [January 30, 2016, 5:13pm UTC](https://boards.straightdope.com/t/crimestopper-tip-money-payout-question/744663/1 "2016-01-30T17:13:15Z")
I just heard an interesting podcast explaining how Crimestopper programs work. Apparently, when it’s time to pay the reward a time and place is set with the anonymous tipster an he or she is paid with an envelope of cash. Are the tipsters required to pay taxes on this payout? I did a quick Google search but I couldn’t find the answer. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [January 30, 2016, 9:21pm UTC](https://boards.straightdope.com/t/crimestopper-tip-money-payout-question/744663/2 "2016-01-30T21:21:56Z")
> [@White SIFL](#): > > I just heard an interesting podcast explaining how Crimestopper programs work. Apparently, when it’s time to pay the reward a time and place is set with the anonymous tipster an he or she is paid with an envelope of cash. > > Are the tipsters required to pay taxes on this payout? I did a quick Google search but I couldn’t find the answer. Yes. #61"(a)\* General definition Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:"\* So unless there’s a section saying it’s NOT taxable, then it is. Of course, if Crimstoppers, etc doesn’t record the pay-out, then who knows you got it? Certainly you could report it anonymously as “other income”, to protect yourself. You \*could \*argue that if they didnt advert the reward, and you did something without asking for or expecting a reward, it \*could \*be considered a non-taxable “gift”. ---
**Author:** ![Leaffan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/leaffan/32/299_2.png) [@Leaffan](https://boards.straightdope.com/u/Leaffan)\ **Post date:** [January 30, 2016, 9:34pm UTC](https://boards.straightdope.com/t/crimestopper-tip-money-payout-question/744663/3 "2016-01-30T21:34:21Z")
[Since the program started, there are now more than 1700 Crime Stoppers programs worldwide in 32 countries.](http://www.canadiancrimestoppers.org/aboutus) I’m sure the tax laws aren’t harmonized. ---
**Author:** ![jtur88](https://avatars.discourse-cdn.com/v4/letter/j/e9c0ed/32.png) [@jtur88](https://boards.straightdope.com/u/jtur88)\ **Post date:** [January 31, 2016, 12:02am UTC](https://boards.straightdope.com/t/crimestopper-tip-money-payout-question/744663/4 "2016-01-31T00:02:43Z")
The IRS itself pays rewards to people who tip them off about tax cheats, and they consider that to be taxable income. ---
**Author:** ![Lucas\_Jackson](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lucas_jackson/32/303_2.png) [@Lucas\_Jackson](https://boards.straightdope.com/u/Lucas_Jackson)\ **Post date:** [January 31, 2016, 1:28am UTC](https://boards.straightdope.com/t/crimestopper-tip-money-payout-question/744663/5 "2016-01-31T01:28:28Z")
> [@jtur88](#): > > The IRS itself pays rewards to people who tip them off about tax cheats, and they consider that to be taxable income. That would probably be the answer then. On the other hand I don’t think CS keeps records of payouts. ---
**Author:** ![Alley\_Dweller](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/alley_dweller/32/430_2.png) [@Alley\_Dweller](https://boards.straightdope.com/u/Alley_Dweller)\ **Post date:** [January 31, 2016, 1:45am UTC](https://boards.straightdope.com/t/crimestopper-tip-money-payout-question/744663/6 "2016-01-31T01:45:22Z")
I agree that the reward money is taxable and I would have thought that if the reward was over $600 they would have had to issue a 1099-MISC and therefore would need to identify the recipient. But much to my surprise, there is a regulation, 26 CFR 1.6041-3: > [@](#): > > Returns of information are not required under section 6041 and §§ 1.6041-1 and 1.6041-2 for payments described in paragraphs (a) through (q) of this section. See § 1.6041-4 for reporting exemptions regarding payments to foreign persons. > … > (l) A payment to an informer as an award, fee, or reward for information relating to criminal activity, but only if such payment is made by the United States, a State, Territory, or political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any one or more of the foregoing, or, with respect to payments made after December 31, 1987, by an organization that is described insection 501(c)(3) and that makes such payments in furtherance of a charitable purpose to lessen the burdens of government within the meaning of § 1.501(c)(3)-1(d)(2). So, it appears that informants are required to pay tax, but they are on their honor to do so. I guess they do have to fear that some other informant may turn them in for not paying their taxes.