Watching the Ten Percenters

I'm responding to this excellent Herald article by Hillary Chabot as a long-time lottery player.

I've cashed tickets at the Lottery offices for years.  Until 2004, I got the full amount of my winnings, and since then I've paid my 5% cut to the state.  (Quit laughing back there if you're thinking I'm financing Deval Patrick's junkets.  OK, maybe a nice lunch at a London restaurant.)  If you have nothing to hide and you won a substantial amount of money, you would go and cash in the ticket...

...unless you owed child support, back taxes, parking tickets, and the like.  Not only do you get the 5% haircut from the state (or, if you're over $5,000, an additional 25% to the IRS), whatever you owe to the Department of Revenue gets taken.  For instance, if you owe $100,000 to the state for child support and you win $250,000, all you get left is $87,500, as $75,000 is sent to the DOR and IRS for taxes and the $100,000 is sent to the ex who has been demanding payment.  Even if you win as little as $600, whatever you're in arrears gets reduced by your winnings.  If you owe $100,000 and you win $600 - sorry, no check for you, but you get your bill reduced to $99,400.

Enter the professional ticket casher, or the "ten percenter."  What a ten percenter will do is cash the ticket for you in his own name, take 10% for themselves, and then give the rest to the winner.  The result: the tax/child support cheat still owes money, but keeps his winnings out of the radar of the DOR and the IRS

If you're not in trouble and you still want to remain anonymous (or have relatives or collectors dial you night and day because they discovered your suddenly fattened bank account) a blind trust established by a lawyer would be better than giving it to a ten percenter.  That way, the lawyer can come forward and claim the prize in the interest of the trust; the members of that trust remain anonymous (well, except for those under 18).

So what to do about this loophole that's costing the DOR millions in back taxes and child support?


Appeal to the ten percenters to turn against the ninety percenters.  A back stabbing move?  Sure, but if the ten percenter knows that the cheat won't give them their 10%, nothing lubricates the skids more than a ten percenter entrapping his boss.

Here's how it would go: a tax cheat owes $50,000 in child support and $25,000 in back taxes.  The tax cheat wins $100,000 in Mass Cash.  His $70,000 net will be seized if he turns in the ticket, so he gives it to the ten percenter with a promise of giving him $10,000.  The ten percenter knows the tax cheat has screwed him in the past, so he works with the DOR and cashes in the ticket for the cheat. 

The catch: the $70,000 check the ten percenter receives gets deposited into a traceable DOR account, who is also monitoring the amount of money given to the tax cheat.   When the tax cheat discovers DOR and IRS agents at his door and arrests him for child support and tax evasion, he also will find out all of his assets are seized too, thanks to the help of the ten percenter.  The $60,000 that the tax cheat tried to evade gets applied to his outstanding liens, and the ten percenter still gets his 10% of the original winnings - plus 10% interest on what the cheat originally owed, which is $7,500.  A fairly nice bonus.

The program, which I would call "Operation Dime Time," would help the DOR get lost cash from their evaders through the work of the ten percenters, who would also get rewarded for their assistance.  The ten percenters themselves would shed their image as mules for tax and child support cheats.  Even better - children who have been suffering due to the selfishness of their parents would get the money they deserve.