QUESTION
What would the possible consequences be If the IRS were to become aware of the situation?
Asked on Jun 30th, 2013 on Taxation - Missouri
More details to this question:
I have a question about tax evasion. 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.
2 ANSWERS
Probate Attorney serving St. Louis, MO
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Edward L. Armstrong, P.C.
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Who was paying the maid? I'm guessing she was paid in cash and that the person paying her was not deducting the payments on any schedule of his or her tax return. If the IRS were to discover this it would assess estimated taxes, penalties and interest and then begin collection efforts. I'm guessing the IRS would not be particularly interested in pursuing criminal charges against her. It could also cause some problems for whomever she was doing maid services for - they should have been withholding income taxes as well as FICA taxes.
Answered on Jul 05th, 2013 at 4:51 AM
Bankruptcy Attorney serving Florissant, MO
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Law Offices of Thomas Corcoran Phipps
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She may not have to file a tax return if she made an amount under the filing requirement. She could call the IRS at (800) 829-1040 to find out if she even would have had to file.
Answered on Jul 02nd, 2013 at 7:52 PM