In addition to all of the above: Hope the intended recipient’s buddies never tell him which wrong address they’ve been sending the money to.
That’s not quite what’s happening. Technically, the government has to prove that it’s more likely than not that the property is tied to crime. However, they often are doing it with very little notice, for an amount that no self-respecting lawyer is going to get out of bed to fight for, with an uncertain interested party who has limited procedural rights and no right to guaranteed counsel. In many cases, the owners sign away their rights to contest the forfeiture so the police who stopped them will do nice things like not arrest them arbitrarily or release them so they can go get their kids from school. But your point is well-taken.
Presumably the intended recipient would have spoken up after not receiving the first payment or two. So assuming you continue to receive the funds, you can assume that you are the intended recipient.
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This would make a pretty good Twilight Zone episode. Weird seemingly pointless thing is occurring for no discernable reason and folks need to deal with the fallout.
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As noted in the wiki on that Millionaire TV show, $1M back in the late 1950s is ~$12M now. That’s life-changing money for anyone who’s not a 1%-er already. That show was throwing around pretty ambitious big money.
For me, and I think maybe you too, Beck, because we both live “in the sticks,” the issue would be less about thinking up things to spend the money on (for the first few months; after that it would get quite hard) and more about how to buy stuff with cash.
There’s not a lot around here for me to buy; to go through a significant sum, I’d have to be making credit card purchases and have stuff shipped to me. For that, I’d need to deposit the cash into my bank account.
Most living expenses theses days are not paid in cash - insurance, property and income tax, fuel, utilities, co-pays on medical expenses. You could probably start buying all groceries with cash, but that wouldn’t use up money very fast.
You could definitely have a lot of services done with cash, though. Independent service people - contractors, tree service, landscapers, pool cleaners, tradespeople - whew, they all love cash! I’d think even moreso in the sticks!
You’re right about that! In this scenario, I’d give our housecleaner a great big fat raise.
True for a criminal prosecution. Not true for getting fired, or for having everybody who finds out about it assuming you’ve been taking bribes. Admittedly, how much the latter matters may depend on your circle of acquaintance, where you live, and who you give a damn about.
It might. Or it might turn out to come from someone who does have a reason to offer bribes; thereby providing evidence for actual prosecution.
That’s actually an interesting point.
Whoever is sending the OP $210K per year is obligated to report that to IRS as a gift. With the SSN of the recipient. That does not cause any taxable income to the recipient, but it does start building a paper trail.
I don’t know how that works if the payee is a business or trust, not a live person.
Of course whoever is doing this doesn’t have to follow the law if they don’t want. But they might and the recipient ought to bear that possibility in mind.
If you’re the recipient, are you notified of the tax reporting of the gift you received, given your SSN was reported?
Not by the IRS AFAIK.
In a real situation you know your rich Uncle Bob sent you $20k for a down payment or whatever. And you don’t need to know or care whether he reported that to the IRS since only his life, not yours, is affected by that reporting.
Oh, to be fair, the ability to buy whatever the hell I want in groceries with no concern as to price would be worth it for that alone. I can rack up a hell of a grocery bill with unlimited funds. My family and dog would be eating like kings. I bet I could get through at least a thousand a week this way. Sure, my reserve will be piling up if my $5000 bundles arrive weekly, but it’ll be a good time.
My only worry, as I said, is the post office noticing and the trouble that might cause. If I knew the post office wouldn’t give a shit, I’d stick to the cash in a closet.
Well, I suppose the other worry is knowing that these gifts are from someone truly altruistic. If I knew this to be the case in this hypothetical, then no worries from me.
If I’m reading the instructions to form 709 correctly, the donor must provide their social security number, but it’s not necessary to provide that for the donee, unless the donee is a trust. They do ask for identifying information for the donee (ie an address) and the relationship between the donor and the donee. In the case of the OP that would be, “Gamemaster/pawn”.
This is not legal advice!
What if it’s multiple people sending me the money? This would explain the different postmarks over using a remailing service.
Hypothetically I’ve pissed off megamillionaires all over the country. They get together to fuck with me. I end up up to my neck in shit with the investigations and all and it only costs the mms a lousy 5 grand each, below any record keeping/reporting requirements.
You all keep on saying that: receiving a gift is not taxable.
Sorry, I can not believe that. That would void succession tax: let the patriarch just give his estate to his favourite heir as a gift, avoid any “death taxes” (a mean name if there ever was one), punish the least loved sons and daughters, fuck the IRS all in one fell swoop. That surely is not how the USA works?
Even better: pile up big debts before you die, give the debt as a gift to your heir. The heir refuses to inheritance, i.e. assuming responsability for the debts and thus not paying them back, but keeps the gift. That would break the economy and the banking system.
Are you telling me this is how it works in the USA?
Now back to the first post:
The answer, as I see it: keep what you need, send back the rest.
Send it to somebody else. Now it is their problem.
How much do you need?
Are you a greedy person?
Do you know any people who need money?
No, the giver has tax liability, and also, gifts (above the tax-free threshold, currently $19k) plus inheritance are added are added together in calculating the estate tax. We have a truly enormous amount of money that can leave an estate tax-free (more than $10m in 2025, but scheduled to drop back to $5m in 2026) but that amount is decreased by the amount of large gifts the deceased have during their lifetime – gifts over the threshold, which must be reported. So, it’s sorta kinda taxed. Of course, people who have estates of more than $10m can afford to structure their assets (by easy of trusts) so as to escape most of those taxes.
ETA: semi-ninjae’d by @puzzlegal explaining it in different terms.
Yes I am telling you that’s how it works in the USA. But you missed some more key points not mentioned.
Estate taxes (death taxes) are owed on estates over ~$15M these days. But not on smaller estates. So whether you give away all of your e.g. 14M estate to your heirs before you die or it goes to them via probate there is no tax.
If your estate is $16M, and you never give anything away, there’s tax on the 1M that’s over 15M when you die. But only on that 1M.
The reason for all this reporting of gifts I and others have been talking about is that when you give a material gift, it counts against that 15M exclusion. So if somebody started with a 16M estate and gave away 15M, that fact would be known and even if their final post-death estate was just $1M, it’d be fully taxed. Because they already “spent” their 15M exclusion by giving it away.
Bottom line, you’re right that you can’t escape estate taxes by giving away your money ahead of time. But that does not mean that gifts are taxed at the time of giving.
Oh, so the giver pays tax in the US? It is the opposite here: it is the receiver, thus my wondering. Interesting.
ETA: LSLGuy shows anything to do with taxes can be more complicated than I could conceive if I made it impenetrable on purpose.
ETA 2: That makes the part of my Post #75 where I make a suggestion completely wrong, so please disregard that.
Yes, it’s weird, but that’s how it works.
But you usually can by setting up appropriate trusts.
That is in fact how the USA works - estate taxes are paid by the estate.