How to hide winnings from IRS

[Bill]

If someone wins 10-15K via offshore, how can he keep the winning from the IRS. This person has had an ongoing battle with IRS for years and will probably be audited. He gets audited about every three years and they have beeen known to look at more than one year at a time.

He would appreciate any ideas I could pass along to him.

Thanks,
Bill

 

[danmurphy jr]

The trick would be to get paid!!

 

[Bill]

Cashing a check in that amount may require reporting? Not sure. I know if it is transferred in it would stick out.

 

[alliecat]

Generally in an IRS audit of an individual (and most small businesses), one of the main things the agent is going to look at is the person's bank statements. They will scrutinize those heavily to compare the deposits into those accounts with the income claimed on the tax returns. If this person has transferred in or out funds that show up on these statements, it is likely the agent will inquire further. This includes transfers to offshore books. If transfers are made from the accounts the agent looks at TO the sportsbook you have to hope he doesn't look at it or inquire further and as long as you keep the funds that were won at the sportsbook. If the agent sees deposits FROM a sportsbook (as agents are more concerned with deposits rather than withdrawals), it is a very likely event that the agent will ask for additional detail as you correctly stated - it would stick out. If it was possible to withdraw the funds by check and cash them (in small amounts less than $3,000) as long as they were drawn on a US bank you would be ok. Any amounts drawn on a offshore bank is likley subject to reporting, so that may be a pitfall.

All in all, the safest path is to disclose the income and pay the associated tax. Otherwise, have your friend keep record of all his losses that offset the winnings for that year. Amend the tax return for the year in question and if the agent finds these funds, conceed the issue and hope criminal penalties are not imposed.

 

[BuffaloBill]

Bill,

Being that they already have their eye on you, you cannot have anything going through your bank. I think in a similar thread a few weeks ago, Fletcher mentioned using a check cashing store. He said to keep all checks under $10,000. He said that the check cashing store will require your information, but they do not report it to anyone. The fees are a bit high, but it seems like this is your best option. Another good option would be to have the money sent to your Neteller account and then use the Neteller ATM card to withdraw the cash in small amounts at ATM machines. This will work too because nothing is going through your bank. That is what you want to avoid. I am not really sure if the IRS can audit your Neteller account. I would have to look into that.

Whatever you decide, let us know what you do and how it turns out. I am sure many people in this forum would like to hear your answer. Good luck.

 

[Bill]

My friend does not have a neteller card but that sounds like a good way to go. He goes through enough cash in his travels and it seems to be the best out. The check thing can be messy and direct deposits are red flags.

I think he will try the Neteller CC.

Thanks to all,
Bill & Friend

 

[ageecee]

what about using western union to get your winnings is that an option your friend has? Maybe cash the checks and then deposit the money in a bank account under a different name someone you can trust. Just an opinion.

 

[BuffaloBill]

Bill,

The only reason that I would suggest the check cashing store instead of Neteller is because there is no way for the IRS to find out about it unless the check cashing store reports it. However, Fletcher said that they do not. With Neteller, if the IRS gets hold of your Neteller records somehow in their investigating, then they can always track it, even if you are using the ATM machine. Your Neteller account will show all of the transactions through them. Plus, when you deposited money into your Neteller account through your bank, it will open up the investigators eyes that a Neteller account exists. From there, they can go into your Neteller account and look at all of your transactions. My guess is either option is safe, but I would go with the check cashing store to avoid anything having to do with the bank. Good luck.

 

[Bill]

My friend is doing the check cashing store thing. He cashed his first check today. No questions asked but cost him 1.5%, but he says it is worth it not having to worry about his favorite government agency.

Thanks to all.

Bill

 

[Rcxslam]

are you guys sure check cashing is not reported to the IRS? I always thought it was...