...report his income to the IRS?'He' tells me that he only does jobs by the day.Each day is a different job.So, he can bid jobs at $250.Very seldom do any jobs earn him more than $500 from any one person.He worked as a carpenter for 20 years and always paid taxes and child-support and when work slowed down he started doing cash jobs and never really stopped.'He' says that since his credit is bad anyway, he'll never even attempt to finance anything.He has a pre-pay credit card. His roommates pay the utilities.He hasn't had a bank account for two years, either.He realizes his social security benefits will be affected, but 'he' says "who knows if there will even be SS in 20 years.He's 45 now and feels that most people are being hi-jacked by the government by taking almost half your $ when you earn it.Then, they tax you for anything you buy with it.If you save it, they tax you for that.If you invest it, they tax you for that.His roomies cover all rent-Can the IRS ever prove anything?
2007-08-08 12:20:12 · 10 answers · asked by jemrx2 4 in Business & Finance ➔ Personal Finance
If ANY of the jobs "he" has done were for even half-legit outfits, they have "written off" the expense of "his" pay using whatever name "he" gave the payer. Since the IRS pretty much use automated audit tools to scan quarterly business returns now, it's only a matter of time before "he" gets caught.
And he will.
Tax avoidance is legal, but tax evasion (which is what "he" is guilty of) usually ends in jail.
Hopefully your "friend" is smart enough to not admit "himself" to what you are sharing with us on Yahoo!, since Yahoo! is not by any means anonymous, especially not if you're the IRS!
P.S. Is your "friend":
"44, a carpenter, and have many compulsive addictive tendancies I've been both battling and nurturing all my life. I was a jock/stoner and dreamed of being a basketball player or a rock star. Instead, I became a computer tech for 6 years 82'-88'. Then, a carpenter ever since. I have a very high IQ and yet I'm so very, very dumb. I'm an artist, deep-down. A romantic, lover(not a fighter). At 6'-4", I'm secure enough not to have to act all-macho. It seems, though, that something's going on inside that keeps me in constant pursuit of self-destruction."
You're determined to go to prison, aren't you?
Silly goose!
2007-08-08 13:03:59 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Your friend will probably not go to jail if this is the first time he has evaded taxes, and the likelihood of him being caught is very low. If someone turns him in and the IRS follows up his penalties and interest could amount to more then any tax he would owe. He is a tax evader of which there are many, many around thinking they are showing the government something. This is a group of people the IRS is trying to crack down on, but as you can see it is very difficult to find them. They have good reason to go after these people because when they do not pay taxes the rest of us have to pick up the slack, and it is a big dollar amount. I don't know the amount for sure, but I have read, I believe, it is estimated to be in the billions of dollars range.
2016-05-17 09:29:43 · answer #2 · answered by ? 3 · 0⤊ 0⤋
Your friend is in fact breaking the law.
There are some loopholes that he is taking advantage of. One is that payments lower then $600 (it used to be) do not have taxes taken out of them. So, the people that are paying him on a day labor basis, are not doing anything wrong by not withholding any federal taxes.
Another loophole that he is taking advantage of is, technically, he is working as a consultant, or independent contractor. What that means is that it is his responsibility to report his income to the IRS.
The above says that the people paying him are not doing anything wrong. The following says that he is doing something very illegal.
Title 26 US Code is the US law that allows the IRS to collect taxes on income earned in the US and via US interests. Title 26, subtitleF, Chapter 75, Subchapter A, Part 1, subpart 7201 states:
Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.
And, evading taxes is exactly what your friend is doing.
By the way, does your friend have a drivers license? Does he ever go to see a doctor? What about a work injury? If he ends up in a hospital, they will collect data that could be used to track him.
Highly recommend that your friend start filing taxes as a self employed contractor or consultant.
2007-08-08 12:39:47 · answer #3 · answered by cbmttek 5 · 1⤊ 1⤋
"He" is going to get caught sooner or later, and "he" is going to regret not paying "his" taxes. The IRS is going to audit a business that has paid "him", and then the IRS is going to compile a list of transactions that are ripe for tax evasion such as paying cash to a carpenter rather than a check. Then, the IRS is going to audit each of the entities that got paid. Guess what happens when the IRS knocks on "his" door? You had better learn to be a fighter and not a lover in prison.
2007-08-08 14:55:31 · answer #4 · answered by 5_for_fighting 4 · 1⤊ 0⤋
I'm not really sure about the odds of getting caught, but I do know one is expected to pay taxes when working for cash.
I have a friend who's a professional musician. He didn't pay taxes for a few years. When the gov't finally caught up with him they pretty much wiped the floor with the guy. He was in pretty deep and swore that his choice (not paying ) was not to be emulated.
Tell your friend that he's gambling against a pretty tough opponent.
2007-08-08 12:31:35 · answer #5 · answered by billybudd1313 3 · 0⤊ 0⤋
Your friend has a war with the IRS on the horizon. Get educated so your friend may win the war
go to this video link
http://video.google.com/videoplay?docid=7521758492370018023
Good luck
2007-08-08 12:52:15 · answer #6 · answered by Omar M 2 · 1⤊ 0⤋
Remind your friend that Al Capone went to jail for not paying taxes -- taxes on illegal income.
He should be very careful not to anger anyone who might just turn him in to get even.
2007-08-08 14:57:04 · answer #7 · answered by bdancer222 7 · 0⤊ 0⤋
most people are being high jacked by the government... lol but he does need to keep reciepts and report. if he doesn't it is possible to owe alot of money that would then be garnished later. not likely that he would go to jail right off hand but it is possible.
2007-08-08 13:05:25 · answer #8 · answered by Anonymous · 0⤊ 0⤋
I IRS could check to see if he has been getting paid. But they dont have proof unless someone tells the IRS on him
2007-08-08 12:26:43 · answer #9 · answered by Anonymous · 0⤊ 1⤋
sure, but it's unlikely they will come after him if he's paying his child support and they don't hear anything. The biggest loser is probably him because he can't get any gov't benefits.
2007-08-08 12:28:32 · answer #10 · answered by Sufi 7 · 0⤊ 0⤋