Is someone safe if they report income from illegal means to the IRS? - eviltoast

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.

  • Potatos_are_not_friends@lemmy.world
    14·
    5 months ago

    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.