this post was submitted on 16 Jun 2024
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No Stupid Questions

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I have seen multiple times on Lemmy that the IRS wants people to report income from illegal means and that they don't care to bust someone for it. For example, an illicit drug dealer is expected by the IRS to report their drug sale revenue without having to worry about being caught for drug dealing.

Will the IRS seriously not report illegal activities or individuals that report they earned income through vague illegal means?

If they don't, do law enforcement agencies skim IRS tax reports to find people that report illegal income to further investigate?

Can IRS tax forms that report illegal income be used against someone in court?

It just seems ridiculous that reporting illegal activity, however undefined, to the federal government would be a safe option.

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[–] Modern_medicine_isnt@lemmy.world 35 points 6 months ago (4 children)

What you need to do is report your illegal income in a legal way. Like say you are a life coach, and you advise people.

[–] Potatos_are_not_friends@lemmy.world 14 points 6 months ago (1 children)

If it looks extremely questionable, like you're a life coach in Alabama and made 380k, it'll raise a lot of flags.

  • Do you have a paper trail?
  • who pays for life coaching in cash? And 100% of customers?
  • Life coaching in Alabama and you made that much? " Is there also some business presence like a website?

There's more things to consider. I say that as a person who has to set up my own company to protect myself when I got freelance clients, and complicated the hell out of my taxes.

[–] Kolanaki@yiffit.net 8 points 6 months ago (1 children)

Probably why fronts are often restaurants. They would have lots of money going in both ways.

[–] Maeve@sh.itjust.works 2 points 6 months ago (2 children)

Or car washes? Night clubs maybe.

[–] kmartburrito@lemmy.world 3 points 6 months ago

There's always money in the banana stand

[–] jpeps@lemmy.world 3 points 6 months ago (1 children)

Laser tag is actually the best option.

[–] slumlordthanatos@lemmy.world 7 points 6 months ago

That is a pretty good explanation of money laundering, actually.

[–] ArmokGoB@lemmy.dbzer0.com 3 points 6 months ago

I was looking into doing some mutual "consultant work" with a friend to make it look like I had an income. The taxes wouldn't have made it viable though.