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.
It is not a safe option.
It is designed as a catch all.
The FBI isn’t going through tax returns looking for Illegal income; rather if you’re suspected of illegal activity, they WILL go through your tax returns, because if you didn’t report your illegal income that is another law you’ve then broken. — See Al Capone
So. It is both a very bad idea, and a good idea to report your illegal income
A better idea is to not do anything illegal; or at least do the illegal thing offshore and hide the income there. Like a good multinational corporation would.
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.
If it looks extremely questionable, like you’re a life coach in Alabama and made 380k, it’ll raise a lot of flags.
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.
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Probably why fronts are often restaurants. They would have lots of money going in both ways.
Or car washes? Night clubs maybe.
Laser tag is actually the best option.
Oh?
There’s always money in the banana stand
That is a pretty good explanation of money laundering, actually.
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.