I have seen multiple times on Lemmy that the IRS wants people to report income from illegal means and that they don’t care to bust someone for it. For example, an illicit drug dealer is expected by the IRS to report their drug sale revenue without having to worry about being caught for drug dealing.
Will the IRS seriously not report illegal activities or individuals that report they earned income through vague illegal means?
If they don’t, do law enforcement agencies skim IRS tax reports to find people that report illegal income to further investigate?
Can IRS tax forms that report illegal income be used against someone in court?
It just seems ridiculous that reporting illegal activity, however undefined, to the federal government would be a safe option.
Tax evasion on top of the other illegal activity can increase the consequences if you’re caught. They tend to require warrants before divulging information to other authorities, however any information gathered through legal means can be used against you.
The main benefit of reporting the income is to reduce the likelihood that somebody gets suspicious of the change in buying habits and starts in investigation in the first place.