How does the IRS know I received income?
August 24, 2001
Date: Thu 9 Aug 2001
Thanks for taking the time to read my email. I have a question or two to ask you.
I received a... check for side work I did and cashed the check at the bank it was issued at. Not my bank. I immediately spent the money on something and never deposited it in my bank account. Does the IRS have any way of knowing I received this check? If yes, how would they find out about it? Thanks for your time!
Date: 17 Aug 2001
You're not asking me how to cheat on your taxes, are you?
If you received the check from a business, it is supposed to issue you an information return, Form 1099-MISC, and send a copy to the IRS.
Imagine the problems our country would have if all of the stores that we do business with and who don't receive information returns didn't report the income they receive on their income tax returns. Our tax system relies on the honesty of our citizens to do their best to comply with the law.
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