More details to this question:
Hypothetical situation. Someone has been a maid for about 20 years. She has never claimed her earnings; as far as the government is concerned she is a house wife. It is only her working, she doesn't have any employees, so her annual earnings are very small. If the IRS were to become aware of the situation, what would the possible consequences be?
1 ANSWER
the hypothetical raises questions that would have a bearing on the answer. If IRS were to become aware of her unreported maid earnings, IRS can assert she has unreported income and assess a penalty. There would be no criminal tax evasion if she only failed to file returns and declare her income. An affirmative act of evasion is needed, such as lying to investigators. She could be charged with a misdemeanor of failing to file tax returns and report her maid earnings.
Answered on Jul 02nd, 2013 at 11:24 PM