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Jimmy Is 14 and Has a Neighborhood Lawn-Care Business

Question 26

Multiple Choice

Jimmy is 14 and has a neighborhood lawn-care business. Simon sells crack cocaine in the inner city. Andrea runs a lucrative escort service for entrepreneurs. Neither Jimmy nor Simon nor Andrea receives a W-2 form and they all do business for "cash" money. In view of this, which statement is most accurate?


A) Because they do not receive W-2 forms, they are not required to pay taxes.
B) All three businesses are a part of the underground economy.
C) Because they are all cash businesses, the government is not concerned about their earnings.
D) Jimmy, Simon, and Andrea all risk doing serious jail time if their businesses are discovered by the IRS.

Correct Answer:

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