From Space to Social, One Prize at a Time

Let’s review the first initialed prize: Ansari X

 
This week I read the interview with Thomas Vander Ark, and got to know the X Prize Foundation. Thomas Vander Ark believes prizes can make a big difference; it changed public perception of what is possible. Although prize are a strategy to change perception and policy, he and the X Prize foundation have a very strong bias in favor of entrepreneurial solution, rather than trying to promote regime change, or policy shift.  

However, as he said in the article “When it is not clear how the problem will be solved, a prize mechanism is very useful.” ,it is possible to apply his concept to explore solutions  for problems in everyday life. I develop interest in the prizes that explore solution tacking social problem. According a NY Times critic: “Maybe such prizes like Ansari X today should take the form of more modest bounties -- in contests that are likely to produce multiple winners whose very numbers contribute to solving a problem.” I found the article about using prize as an incentive to tackle tax fraud.

IRS Rewarding Those Who Snitch On Tax Cheats

Posted in IRS Tax Debt, Tax

March 4th, 2010

With the temptation to fudge taxes being greater than ever, the IRS plans to reward those who are willing to rat out tax cheats. As a part of its informant programs, the IRS encourages those who suspect someone of committing tax fraud to report itfor a handsome reward.

How Does the Program Work?

By blowing the whistle on those who cheat on taxes, the IRS usually will give the whistle blower a percentage of the amount that the tax cheat underpaid. However, since there are two different programs carrying different percentage amounts, lets take a look at the two:

1.For small-time crooks: If you want to blow the whistle on a small-time crook then you would be participating in the original IRS informant program that has been around for more than 140 years. If you report someone to this program, you could receive up to 15 percent of the amount that has been underpaid up to a maximum award of $10 million.

2.For big-time crooks: On the other hand, if you suspect someone of cheating the IRS out of at least $2 million (including taxes, penalties and interest) then you could receive between 15 and 30 percent of what was underpaid in a new whistle-blower program. The catch with this program, however, is that the suspected tax evader must be an individual and his or her gross income must exceed $200,000.

Does The Program Help?

So far, the IRS has reported that in the fiscal year 2008, 476 informant tips were received identifying 1,246 taxpayers just in the second whistle-blower program. In total, the firm has received claims from informants that involve billions of dollars in taxes, penalties and interest.

Its clear that the IRS takes tax fraud seriously. However, there are always people ready to try theirunique tax scams, especially when the economy is suffering. If you want to make a quick buck off of someone you know who is planning to cheat on taxes this year, you can complete a claim on the IRS site or call the tip line at 1-800-829-0433.

In my opinion, it is slightly different using prize model to solve social problems and science and tech challenge, the concept is powerful but the mechanism needs to be tried, IRS is a good example using prize as leverage in social sector, it may cause social debate rewarding fraud money to snitchers, but it is a fairly good start for a traditional public sector.

My question:

In the article, Thomas Vander Ark mentioned couple of times about applying prize model to inspire entrepreneur in education. I googled and had a hard time finding any existing prize competition to promote breakthroughs in education system. Currently is there any? It could be a good incentive for donors and venture capitalist, since no one has claim the spot yet.