You know what happens if you fail to report some income? You get a notice 6 months later for the amount owed. That’s it. It’s no hassle at all.
It’s ridiculous that the US doesn’t send a tax bill to citizens like is done in other countries. You get the bill, amend it if there’s anything they missed, and send it back. If they know enough to audit you, they know enough to send the tax bill.
Venmo, or any service, would be responsible for producing said tax form if they are also reporting the funds to the IRS. So she would be made aware of the tax form.
If anyone wants to test this though you’re welcome to venmo me $601. I’ll take a few volunteers just to make sure there are no flukes
I’m not american but we also have yearly tax here and if I’m ever audited I’m FUCKED. I don’t have a singe document saved. But also I’m super poor so id think they want me
This whole yearly tax thing seems like so much unnecessary work to me. Here in the UK we have a “pay as you earn” system. Taxes get deducted from your wage automatically every time you get paid and it’s all recorded. No extra steps needed. You only need to do extra reporting if you have significant income from other sources e.g. owning a business and getting dividends.
As a rule of thumb the IRS won’t audit anybody they can’t recoup more from than the cost of the audit. Maybe $20,000 maybe $40,000.
Obviously, the number should be on the higher end because now the IRS is short staffed.
They also won’t audit you if your rich, so there is a nice middle-class sweet spot they can exploit. If your poor though, they may try to still come after you so they can throw you in jail for some of that cheap labor for tax evasion.
Under the Biden administration, as a result of the inflation reduction act, the IRS audited the rich and saw large increases in revenue as a result.
As part of larger efforts taking place, the IRS has stepped up activity specifically on 1,600 individuals whose incomes were more than $1 million per year and who each owed the IRS more than $250,000 in recognized tax debt. Since last fall, this IRS compliance effort has generated more than $1 billion in collections from this group, with work continuing in this area.
Yes, it’s a rule likely based on amount and likelihood to recoup. There’s no incentive to go after people who know how to cheat the system. You gotta go after the folks who don’t know how to fight back.
The current admin gutted the IRS specifically so they didn’t have enough resources to go after the rich
