As Yakoff Smiranoff used to say ! Buddy of mine calls me today about his stepdaughter. Says her "lazy butt" worked for a total of 1400ish bucks last year (W-2) and got back over $7,000 in Earned Income Credit refund. (she has 2 kids by 2 different daddies). I said "So how did that work again....sounds a bit low for that much refund" He says "The gal at H&R Block told her file a Schedule C along with her W2 earnings and claim she made another 12k in cash from house cleaning for folks. That puts her total income at around 13.5k, enough to get back that much refund even AFTER paying 1800 bucks for social security (self employment tax rate). By keeping the refund under 10k (she would have maxed out the EIC with an income of 21.5k according to my tax guy I called after this conversation), she is pretty much assured no live agent will question the obvious asking for some proof of this phantom house cleaning service (again, according to my tax guy....they don't have the manpower to pursue under 10K scams). The most he says will happen is an 'electronic' audit where they might ask for some small amount of proof, but if that is provided, they drop it. My tax guy says all kinds of people doing it....there's probably a 'how to' on YouTube......ahahahaaaa "Is theese a great Kuntry, or what ?" Remember this as you drag yourself out of bed and go to work.
Assuming my tax guy is right (and he is pretty sharp, an enrolled agent...can represent folks in tax court), they already KNOW this is going on, but won't spend the manpower to pursue under 10k in collections unless they have a drop dead easy case. Hard to prove you DIDN'T earn income, on which you paid taxes (social security, no income due on that level of income).....I mean if folks hand you cash to clean their house, they would have a time proving they did not ! All you do is line up 10 of your deadbeat friends and have 'em say "Yep she cleans my house once a week, I pay her 50 bucks cash a shot"......or "I sold stuff at the flea market, I have no idea who the folks were that bought it"....or "I sold the heck out of firewood last year, but I don't know any of the people that bought it....they just call me and I deliver it" (I already have chainsaws, splitter, truck and can show all that.....you gonna say I didn't make money ??)....or any one of a dozen other cash businesses....which are usually trying their best to NOT pay taxes......ahahhaaaaaa This just goes to what I've always said: Better mouse traps only courage smarter mice !
I used to know a woman very much like the girl described. She knew every tax scam there was. She got her EIC and would go on vacation every year. It pissed me off because she got all the other entitlements plus a free vacation. I stopped talking to her.
Yeah, I hired a neighbor fellow to help me hang sheet rock in a rental I was building at the time, he was drawing unemployment, I was paying him cash. Income tax check came, he got 11 grand back, and quit the same day. Didn't even thank me for the 11k that I paid in taxes so he could get it. That was 15 years ago, and I still don't even glance at his place when I drive by.
You know my X wife Gets a EIC of around 8-10 grand per year and spent either 2-3 weeks on cruises or 2-3 weeks in Vegas every year and was broke except fer the welfare and child support the next 50 weeks of the year. Very happy when the kids turned 18 (Twins) and I did not have pay her any more!
That house cleaning scam is pretty common. .GOV does not care, they need to get $1T worth of debt back into the economy every year without anyone noticing to keep the machine fed, this is how they do it. 1. Borrow money against the good faith, credit and work ethic of the middle class. 2. Give the money to the lower class so they spend it on crap produced by the upper class.
I am not quite as naive as that post above might indicate. I know of dozens of ways to chip away at the system, but that is one that had not occurred to me since I've never used the earned income credit. All that aside, I wonder if one could make a decent living tracking down and exposing that level of cheating "the man", then doing a citizen's arrest. Do you suppose Dawg might get interested? No matter, when I am reincarnated I won't be working as hard or as long as I did in this lifetime.
I.R.S. does pay rewards for exposing tax cheats. I think it's percentage of recovery. It's probably considered taxable income when they pay it.
Yeah....I know.....I've preached they same thing over and over and over. The object is to float more and more money out to keep the system going, and a certain amount of tax evasion is clearly in the plan. THAT is the whole point of the EIC, welfare, free phones, studies on red newts, etc....inject new money to keep it going. I guess I'm just astounded at the creative minds that come up with ways to game the system !
WHOLE flock of socialists out here that would disagree, not realizing the true purpose of giving money is not to help anyone but the bankers.
Which is funny, since the socialists want to control the money, not give it to the "rich capitalist" bankers.
This does explain the vast numbers of panhandlers I see every day in my tiny little town working every corner of every grocery store. Unreportable income for just standing on the street corner holding a cardboard sign.
I'm thinking I read a good panhandler could drag in 80K a year working only when it suits them or the weather is nice!!!
One of the local rags interviewed one of the fixture beggars outside a popular bar and he bragged that on average he knocks down around $1200 per week on the weekends and even has a special "Bum Costume* he wears to elicit the most sympathetic response from his patrons. That puts him in the 62k range for his "part time cash only job".
There IS NO WAY I could lie to folks that way ,, I work (retired in 90's) everyday doing something , firewood to U name It . and still pay taxes at my last years in breathing , dead WATCH OUT GURLS , Second comming Sloth