Submitted by xCreamPye69 t3_10ontj7 in explainlikeimfive
djinbu t1_j6hnkcg wrote
Reply to comment by xCreamPye69 in ELI5: Why does the IRS want your illegal income declared on tax returns? by xCreamPye69
The IRS isn't really a law enforcement agency. They are a financial agency subject to act in accordance with the law and use law enforcement to perform their job. If you just tell them you've earned $4,000 through trade and markup with no particular structure and pay your taxes, they'll likely just like to see proof that you didn't earn more then you're claiming and move on.
They want their money with as little cost as possible. Unless they have reason to suspect you owe substantially more (enough to warrant investigation), they'll just move along beecher investigation costs a lot.
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