How do I file taxes after getting money under the table?
I'm a returning member. I first joined this group back in August 2010 when I was having tax troubles with the IRS, which I got the help I needed to fix all of those problems from this group. WHEW!!! Today, I'm returning back for pre-help of the inevitable.
I live in Los Angeles, California. I figure I’m just a few weeks away from the IRS asking for me to file my 2011 tax return.
Long story short, in January 2007 I refinanced my house, since I needed money to make some major house repairs. I ended up getting a 100K loan while being self employed. I made some repairs and kept the rest of the money in the bank. My business went bust in March 2007 and I had no income (due to The Great Recession and not being able to find a job at all until late 2010), so I lived off of the remainder of that refinance money I had in the bank until June 2010, which I paid my mortgage and living expenses with that money until the money ran out in June 2010. I got behind in my mortgage and my house started into the pre-foreclosure process in October 2010. In March 2011, the foreclosure process started. Luckily by April, my family loaned me the money to bring my loan current and to stop the foreclosure process. Though I found part-time and temporary work since late 2010, yet I always made less than 5K a year, mainly due to The Great Recession and not being able to find almost “any work” here in Los Angeles. Currently I do not make enough to pay the mortgage, so my family is still loaning me the money until I get back on my feet, since they are financially stable and can afford to help me “for now”. Since I have been making less than 5K per year since 2007, I stopped filing my taxes. Yet the IRS finally came after me in 2010, looking for my 2007 through 2010 tax filings, since the bank had reported that I had paid over 10K in interest (each year) for my mortgage. Luckily, back then, I had enough money in my savings account from the loan, where I could state where I got the money from (to pay my mortgage) when I had to file my taxes 2007 - 2010 tax returns. For the past 10 months, the IRS have left me alone, yet for the entire 2011 year, I made less than 5K and had got money (under the table money) from my family to help me kept my house and to stay afloat.
So now my question is, how can I file my 2011 taxes, when the bank has already reported that I paid more than 10K in interest for the 2011 year WITHOUT my dragging my family into it? Since several members of my family have given me various amounts of money to keep my mortgage current, the IRS is going to want to know how did I manage to pay a $1,300 per month mortgage and deal with basic living expenses while only claiming that I made 5K for the 2011 year. Since I know it is just a question of time before the IRS will want my 2011 returns, I want to file them now, before they come after me.
What can I do to remedy this situation?
- If push comes to shove, you simply tell the IRS that your family members gave you gifts to help you get by. An individual can give another individual up $12,500 (or $13K I'm not sure which.) per year and that money is tax free. So take the amount of money you got from your family and divide it by the number of family members that gave you that money. If the quotient is less than $12,500 (or $13K), then all that is tax free.
So if an IRS agent wants to know the details of your sex life, would you tell them? Why would you even think about sharing your personal business with them? All they need to know is if you had taxable income (you received W-2 or 1099). If they say you had income then ask them to produce the evidence (W-2 or 1099), the burden of proof is entirely their responsibility. If they can't produce evidence don't be foolish and create if for them.
--- On Fri, 1/25/13, Wilson Montgomery <westcoastwilson@...> wrote:
From: Wilson Montgomery <westcoastwilson@...>
Subject: [tips_and_tricks] How do I file taxes after getting money under the table?
Date: Friday, January 25, 2013, 3:26 PM
... the IRS is going to want to know how did I manage to pay a $1,300 per month mortgage and deal with basic living expenses while only claiming that I made 5K for the 2011 year.
Re: How do I file taxes after getting money under the table?
Sidenote: : Perhaps you should investigate why you probably don't owe a thing or why you probably don't have to file....I'll assume you're like everyone-else in the USA who abide purely by custom [aka sheepeople over cliff], intimidation and government "opinion" rather than relying upon what the written law tells government to do. And of course the IRS or court might have a different....OPINION....but in the end, its opinion eh?
Back to your story: The IRS finds-out about money via "information". Yes, just like the old Soviet reporting by the KGB on "information" on suspects. Government in the USA relies upon innocent, naive proles to report upon other proles---and thus do all of government's accusations and thus said government doesn't have to pay any penalty for wrongful accusation. [Its the old tattletale: "I didn't say you owed....she did."] So some idiot files an "information return" on you--say a 1099 or W2...and does so under penalty of perjury....thus basically saying [really implying] HE says you have liability for the tax to government. This let's government off the hook--now all they're doing is enforcing upon the accusation. [Perhaps this sounds familiar to cops saying "I can't do anything unless you swear out a complaint. Do you want to swear out a complaint and invoke my powers?"]
The OTHER way the IRS finds out about money is....someone rats on you. They investigate these but unless they arise to a great amount to warrant a CI investigation--which means fraud suspected--I doubt they really get attention.
Be aware....people in the country assume "work under the table" means simply "I don't have witholding." [aka not W2/W4] Some employers hire people because the applicant says "I need to work under the table." The employer doesn't want to get in trouble, so he simply reports as 1099 Misc Income. A TRUE under the table has NO REPORTING. These are very hard for the IRS to track down anyone WITHOUT an information return as frankly--unless the amount is sky high--there is other revenue easier to acquire.. So the bottom line is "Did someone send you a 1099 or W2 ?"
If someone ALREADY crapped-on-you with a W2 or 1099 [you would know as they mail it to you], then the IRS already has info as to who it is and they match like 99%.
Going back to the ganster era....All that said, the IRS has a LONG STANDING policy of NOT CARING where $$ come from. Look...there are a TON of illegal immigrants who use OTHER people's SSN/TIN's. Nary ONE has been investigated by the IRS because frankly it's $$ coming IN. The IRS even thumbs its nose at DHS, Immigration, etc, Yep!
So unless you have a 1099/W2.....Is you want to report it, slap it down as Misc. income. I wouldn't give them ANY more info. Not their business.
TRUST ME...the IRS services customers and they're happy to get all the customers they can. If you're a customer of theirs, they welcome you with enfolding arms into that of a one-word taxpayer.
- What facts do you rely on to prove I had "taxable income" or the code
applies to me?
What are you even doing in the several states? Can I see your delegation of
authority and oath of office?
- Best to deny any gifts as those can be taxed, I'd tell em loans from
family friends your oral oath and their faith established the contract.
- From Wikipedia:
Gift tax exemptions
There are two levels of exemption from the gift tax. First, gifts of up to the annual exclusion ($13,000 per recipient in 2009-2012) incur no tax or filing requirement. By splitting their gifts, married couples can give up to twice this amount tax-free (although they must file a gift return). Note that each giver and recipient pair has their own unique annual exclusion; a giver can give to any number of recipients and the exclusion is not affected by other gifts that recipient may have received from others.
Second, gifts in excess of the annual exclusion may still be tax-free up to the lifetime estate basic exclusion amount ($5,120,000 in 2012), although for estates over that amount such gifts might increase estate taxes. Taxpayers that expect to have a taxable estate may sometimes prefer to pay gift taxes as they occur, rather than saving them up as part of the estate.
Furthermore, transfers (whether by bequest, gift, or inheritance) in excess of $1 million may be subject to a generation-skipping transfer tax if certain other criteria are met.
Tax deductibility for gifts
Pursuant to, property acquired by gift, bequest, devise, or inheritance is not included in gross income and thus a taxpayer does not have to include the value of the property when filing an income tax return. Although many items might appear to be gift, courts have held the most critical factor is the transferor's intent. Bogardus v. Commissioner, 302 U.S. 34, 43, 58 S.Ct. 61, 65, 82 L.Ed. 32. (1937). The transferor must demonstrate a "detached and disinterested generosity" when giving the gift to actually exclude the value of the gift from the taxpayer's gross income. Commissioner of Internal Revenue v. LoBue, 352 U.S. 243, 246, 76 S.Ct. 800, 803, 100 L.Ed. 1142 (1956). Unfortunately, the court's articulation of what exactly satisfies a "detached and disinterested generosity" leaves much to be desired.
=========================On Tue, Jan 29, 2013 at 6:02 PM, hobot <hobot@...> wrote:
Best to deny any gifts as those can be taxed, I'd tell em loans from
family friends your oral oath and their faith established the contract.
How many times do I have to explain to people that the IRS does not give a rat's butt where it gets its federal reserve notes from:
Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.
Kickbacks. You must include kickbacks, side commissions, push money, or similar payments you receive in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040), if from your self-employment activity.
Stolen property. If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.
Now what TYPE could you list on Line 21 and not implicate yourself? Well....according to the IRS there are primarily two types of income: Taxable and Non taxable. Duh! So what type goes on the form?
Why doesn't the IRS care about income coming from questionable sources? Aside from the fact they get brownie points for running the world's largest extortion racket for Congress.....A little reflection will indicate why this is so! The law cannot require an impossibility. You can't be required to file a return on all income and yet be denied the opportunity to do so.
[I saved for the advanced student the topic of liability and duty to file a return and simply assumed in the above discussion we were dealing with the "ritual of the enslaved"--that ritual where government need trumps individual rights and needs...that ritual where the customary aspects of society displaces and negates a fair reading of actual law...that ritual where the sheepeople actually perceive they live in a free society when the degree of their enslavement is measured at +40%.]