There are also illegal methods. Contrary to popular belief, however, the IRS does not automatically know you have earned money just because you have been paid by check. If a person claims too many deductions in proportion to his or her income, or if a person with a great many assets claims a very small income, an audit may result. Many people trying to evade taxes get into trouble when they become too greedy. Life Off the Books.
Many people do business or work on a strictly cash basis and are entirely outside the tax system.
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