To any criminal defense lawyer who practiced in federal courts since the 1980s, the slide down the slippery slope was one of two things.  The end of the decent, honest, hard-working criminal, or a short term opportunity to cash in.  That’s when everything changed, from guys who lived their lives on the street, engaged in profit-making endeavors that the government frowned upon, coming home at night to their wives, children and the American dream, to snitches.

The fault lies mainly with the United States Sentencing Guidelines, so harsh and inflexible that any honest drug dealer caught in its clutches felt there was no way out.  Where before they would never consider ratting out their brother, it was rat first or be ratted on.  Only one would get the 5K1 letter, and there was no glory in spending the next 20 years in prison.  Snitch was the new growth industry on the streets of the city. 

A large segment of the criminal defense bar dug secret underground tunnels leading directly to 1 St. Andrews Plaza, so they could get their quickly and sight unseen.  The only thing you needed to know to become a New York rat lawyer was how to smile and say sweet things to federal assistants.  And the AUSA thought they were brilliant, what with people pushing and shoving to be the first through the door.

Since people were falling all over themselves to rat anyway, a cottage industry grew of people who cut out the middle man and went straight from the cradle to the DEA payroll.  We went from agricultural nation to manufacturing nation to snitch nation, which has the lowest cost of doing business and no barriers to entry at all.  America is the land of opportunity.

Sound crazy?  Consider this:  On the first page of the instruction sheet for Form 1099-Misc ., the Internal Revenue Service includes this very important bit of information.

Fees Paid to Informers. A payment made to an informer as an award, fee, or reward for information about criminal activity is not required to be reported if the payment is made by a federal, state or local government agency, or by a non-profit organization exempt from tax under 501(c)(3) that makes the payment to further the charitable purpose of lessening the burdens of government.

You don’t make the first page unless it’s an instruction that matters to a whole lot of taxpayers. For example, the instruction for “gross proceeds paid to attorneys” is on page two.  That’s where the small potatoes stuff is put.  Page One is for the big time instructions.

To all those kids considering law school, which carries both enormous tuition costs as well as significant opportunity costs, the IRS is trying to tell you something.  And it’s tax free income.  It doesn’t get better than that.  Plus, you get to hang out in bars.

H/T Jamie Spencer at Austin Criminal Defense Lawyer