Uncle Sam is desperate for cash and taking an especially close look at the biggest fish. February 1, 2010 Not everyone buys the old saw about the certainty of death and taxes -- at least when it comes to the latter. Hence the so-called tax gap, the difference between taxes owed and taxes paid, which at last estimate was running nearly $350 billion a year. So to shrink yawning federal budget deficits, the IRS is taking aim at tax cheats, especially those hiding assets overseas.For fiscal 2010, the IRS requested a budget increase of $603 million, more than half of it earmarked for initiatives to close the tax gap. That includes hiring nearly 800 new agents to combat offshore tax evasion. Last August's landmark deal between the IRS and Swiss banking giant UBS AG unveiled undeclared assets in some 4,450 accounts held by U.S. residents. Another 14,700 Americans turned themselves in under a partial amnesty program. The IRS will now scour their accounts for more leads. I "If you hold overseas assets, you must report and pay your taxes or we will be increasingly focused on finding you," warned IRS commissioner Douglas Shulman in a recent speech. Legislation introduced in Congress would expand that effort, forcing foreign institutions to disclose more about U.S. account holders. Agents are looking for revenue close to home, too. Mortgage-interest deductions are one potential source of scofflaws. The Treasury Inspector General for Tax Administration, an IRS watchdog, reports that many people are paying significant mortgage interest and are either not filing tax returns or filing returns that report income insufficient to cover their mortgage and basic living expenses. The discrepancy between expenditures and income should raise red flags. All told, the inspector general's mortgage-related research indicated unpaid tax revenues in 2005 of $1.4 billion. Advertisement The IRS says it's on the case and expects a nationwide program to make greater use of mortgage data in audits by late 2011. Also starting in 2011, brokers must track the cost basis of newly purchased stocks so that they can report the basis to you and to the IRS when you sell. That's in addition to what's covered on Form 1099B, which shows gross proceeds from stock transactions. The goal is to reduce underreported capital gains. The IRS is adding manpower to probe the complex dealings of the super rich. The Global High Wealth Industry group will look for overly aggressive tax strategies among the trusts, real estate investments, private foundations, licensing agreements and other financial arrangements of the global A-list. Only taxpayers with assets worth tens of millions of dollars are potential targets. G-men aren't the only ones with watchful eyes. A two-year-old IRS whistle-blower program is garnering interest from a growing number of would-be informants enticed by the promise of juicy rewards. If you've got the goods on an individual or a business, you can receive up to 30% of what the IRS collects. But the unreported tax liability has to be more than $2 million, or the individual's gross income must be more than $200,000 a year. If you're privy to lesser shenanigans, you can still be rewarded with up to 15% of any taxes and penalties collected. File Form 211 to rat someone out.