Not paying taxes
I don't have the money/skill for this to be a real life situaiton, so I am not being shady, just curious.
1) Why would you ever pay gift tax? If you give somebody 5 million dollars, you have to pay gift tax on 2 million of it if you never gave a gift before. On your tax return why would you ever say you gave it as a gift, instead of just not mentioning it at all? To my knowledge, the IRS does not check your bank account for large non-cash transactions. Even if they did can't you say you lost it at a casino?
2) Say you are a full time poker player. You make 50k-200k a year. You don't play online, just cash games at underground poker clubs. Would the IRS ever audit you? They have no record of your revenue and expenses. I understand how businesses get audited when they expense too much or don't claim enough, and they are registered with the state or county. If you are making a boat load of money and investing it, and you have to pay taxes on your investments, then I guess they can audit to see where the money came from? But what if you just pay somebody to buy things under their name for you? Does the IRS audit you for making big purchases? SHould this poker player make a shell sole prop business, claim like 40k a year in profit, pay taxes on it, and move on? Or could he possibly get caught for just saying he is unemployed and owning expensive things?
These are things I never understood and am thinking abou because it is tax season.