Filling in the Tax Gap

A few years later, however, with Congress clamoring for more tax revenue, Szilagyi's idea was dug up, rushed forward and put into law for tax year 1986. When the returns started coming in the following April, Szilagyi recalls, he and his bosses were shocked: seven million dependents had suddenly vanished from the tax rolls, some incalculable combination of real pets and phantom children. Szilagyi's clever twist generated nearly $3 billion in revenues in a single year.

Szilagyi's immediate bosses felt he should get some kind of reward for his idea, but their superiors weren't convinced. So Szilagyi called his congressman, whogot the reward process back on track. Finally, five years after his brainstorm became the law, Szilagyi, who earned about $80,000 annually at the time, was given a check for $25,000. By this point, his idea had generated roughly $14 billion.

Which suggests at least one legitimate reason to dislike the I.R.S.: if the agency hadn't been so stingy with Szilagyi's reward back then, it probably would have attracted a lot more of the anti-cheating wizards it really needs today.

Stephen J. Dubner and Steven D. Levitt are the authors of ''Freakonomics: A Rogue Economist Explores the Hidden Side of Everything.'' More information on the research behind this column is at www.freakonomics.com.