Submitted by xCreamPye69 t3_10ontj7 in explainlikeimfive
markroth69 t1_j6h889a wrote
Reply to comment by IfIRepliedYouAreDumb in ELI5: Why does the IRS want your illegal income declared on tax returns? by xCreamPye69
Money from illegal activities: $0
Money from my, uh, consulting firm called Definitely Not an Extortion Racket: $1,000,000
IfIRepliedYouAreDumb t1_j6h8s3y wrote
You’re still not getting it. He’s not asking HOW to launder money, he’s asking WHY that line is there. And it’s there as a way to tax federally illegal revenues.
Things like casinos and brothels have historically fallen under this category. I’m sure marijuana could too, if you want to be able to receive digital payments (which is why a lot of dispensaries are cash only).
Also that’s not how money laundering works, if you’re receiving payments like that the cash would have to be laundered before then.
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