'I've got this friend' who works strictly 4 cash the last 2 years. Can he go to jail if he doesn't ...

...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?'I've got this friend' who works strictly 4 cash the last 2 years. Can he go to jail if he doesn't ...
They don't have to prove anything they just have to find you. Once they get you to respond they will make an appointment with an agent and he will have assessed your takes for you. You are allowed to file the taxes for the missing years. After you file them the fun begins.





The taxes are all exposed to a penalty of 25% and then the IRS adds 11% a year. I might be wrong over the exact figures it has been many years.





The compound interest add up very fast. Ten or eleven thousand in taxes can become 100,000 in just about five or six years.





Evasion is when you pay taxes but are hiding things from the government. They don't like at all.


Then you can go to jail.





There is a shadow citizenry in this country that never pay taxes. Mostly they are self employed just like your friend and just get by.





Your friend is alright as long as they don't find out about him and nobody turns him in.





BTW if he ever does decide to pay taxes. Make sure he goes to an accountant. Before he goes to the accountant he should see a tax attorney and let the attorney provide the accountant. This is very important. There is attorney client privilege but no accountant client privilege unless the attorney hires the accountant. After all you don't want your own accountant ratting you out.





Tax avoidance is legal tax cheating is a criminal act.'I've got this friend' who works strictly 4 cash the last 2 years. Can he go to jail if he doesn't ...
It's called tax evasion, and he could be in big trouble if he gets caught. At the very least, he'd have to pay the unpaid taxes plus a fine. As a self-employed contractor he probably would have a lot of deductions for equipment depreciation, supplies, transportation costs, etc., so the taxes would probably be minimal. He would have been better off filing with the IRS and taking advantage of those deductions. When I was working as a self-employed musician and only earning a few thousand dollars a year, my deductions were sometimes as much as my income and I didn't owe any taxes.
Only if you rat him out.
i don't thing so do he have any paper or something for the work he does if not there is no prove
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.
The IRS doesn't have to prove anything. All they have to do is bring him in and have him explain and prove to them, how he's paying his bills.





Where's he getting his money? If he's not on public assistance, then he'll have to show the IRS, where it's coming from.





Your friends alright, until he pisses off someone and they turn him in. The IRS checks their records and see he hasn't paid squat and the ball starts rolling.





My brother-in law had a neighbour, who was caught doing that, a couple years ago. He was turned in by his ex-wife, because he made her mad.





He didn't go to jail, but the IRS put the screws to him. Because he didn't have any records, the IRS estimated what his salary was for the four year period, he didn't pay.





They estimated on the high side. On top of penalties, late fee's and the estimated taxes he owed, he'll be paying for a long time. And he's sorry he ever did it.