In their book Freakonomics, Steven D. Levitt and Stephen J. Dubner explain how a simple change to U. S. tax rules in 1987 exposed the depth of the public's willingness to deceive for financial gain:
In the 1980s, an I.R.S. research officer in Washington named John Szilagyi had seen enough random audits to know that some taxpayers were incorrectly claiming dependants for the sake of exemption. Sometimes it was a genuine mistake (a divorced wife and husband making duplicate claims on their children), and sometimes the claims were comically fraudulent (Szilagyi recalls at least one dependent's name listed as Fluffy, who was quite obviously a pet rather than a child).
Szilagyi decided that the most efficient way to clean up this mess was to simply require taxpayers to list their children's Social Security numbers… The idea never made its way out of the agency.
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.
