Pre-paid Visa, what's to keep people from hiding their income?

Question

I'm seeing a lot of things about these pre-paid Visa cards. Some of them have huge limits that you can put on the card using cash as long as you go to one of their distributors. So, what's to keep people from filling up these cards with unreported cash (from gambling winnings or something similar) and not reporting it to the I.R.S or the ex-spouse looking for more alimony??

Answer 1

Nothing other then they aren't paying you interest on your money that's sitting there so it's a pretty stupid place to hide cash. Sticking it under your mattress works just as well.

Answer 2

The same thing that keeps you from just holding the cash. In the case of the IRS, they will see what you are spending doesn't match with what you are reporting earned. An ex would have to hire a private investigator to check on you. In the meantime, you are paying fees to have the money loaded onto the cards.

Answer 3

You can do that, certainly. But the IRS isn't stupid. It's not hard to take a look at your home, cars, and lifestyle, and figure out a level of income it would take to maintain that lifestyle. If you aren't reporting nearly enough income to match your lifestyle, you're a great candidate for an audit.

And these days, forensic accounting is gaining traction. There's people out there that get paid to backtrack your income and expenses, no matter how well hidden you think it was. They already know every trick you'll think of, and many more you haven't.

Answer 4

Nothing.