No one goes to jail for underreporting a small amount of income, like a weekend garage sale.
When the IRS figures out that you underreported something, they assume it's a minor mistake and send you a bill for the difference, plus minor interests.
And, as far as out-of-state sales tax... Who actually keeps a list around of all the trinkets that they bought out of state so they can pay the extra $10 of tax at the end of the year? There is a reason why big-box stores are located immediately on the tax-free side of a state line.
> No one goes to jail for underreporting a small amount of income, like a weekend garage sale.
Almost no one goes to jail for tax-related issues, period. Only about 600 people are convicted of tax fraud per year and they usually do so because of amounts of more than $100,000.[1] If the IRS finds discrepancies, they'll work with the taxpayer to pay the appropriate penalties. You have to be doing something particularly egregious to end up going to prison.
The IRS is not the big, bad bully that it is usually portrayed as.
When the IRS figures out that you underreported something, they assume it's a minor mistake and send you a bill for the difference, plus minor interests.
And, as far as out-of-state sales tax... Who actually keeps a list around of all the trinkets that they bought out of state so they can pay the extra $10 of tax at the end of the year? There is a reason why big-box stores are located immediately on the tax-free side of a state line.