This is the best idea if you are willing to uproot your life.
Casinos report big winnings to the IRS and IIRC they even withhold the taxes. The IRS is going to want to know why the casino doesn’t have any record of your “winnings,” or why you don’t seem to be able to remember which casino you “won” your money at. And even if they didn’t, a million dollars in winnings is going to attract a lot of attention.
Where I live, they cannot come in without notifying me first, unless it is for emergency repairs. If they abuse this privilege, I can get a restraining order against them (which I have done in the past).
You didn’t take it far enough. Play $5K at several different casinos during the year. Win or lose, declare 10K worth of gambling winnings for the year on your 1040 and pay taxes on it. That gives you maybe $20K worth of the cash you can spend in bits and pieces that has a paper trail. If anybody gets curious about how you can afford a new car, they see your gambling winnings. All “above-board.” Do this over several years, being discreet with your spending, and you can make the whole million look like clean money. That way there are no “big wins” to draw attention. Better if there was, of course. That makes the paper trail even more transparent.
How will this work? You can’t walk into a bank with a duffel bag with $1,000,000 in cash, and deposit it. This is the whole source of the problem. Every bank that operates in the United States will call the Feds if you try to deposit $10,000 in cash. Or even less. Some money launderers try to get around this by depositing $9000, but banks will generally call the Feds anyway. And anyone who makes large cash deposits every week? They call the Feds.
There are no Swiss or Cayman Island banks that operate in the United States that will accept cash deposits, no questions asked. They don’t exist. There may be banks somewhere in the world that will accept duffelbags full of cash, but those banks can’t operate legally in the United States.
You need a “Danny”. If you do the casino thing, you need a shady guy running the casino who would like to report your $1M as income to you (and subject to taxes) and a loss for him so he can save on his taxes.
It’s a win-win! (Don’t forget to give Saul his cut.)
Yes, but how do you explain winning $20,000 at the casinos every year for 50 years? You can do that a few times because anybody can have a sudden windfall at the casino. But nobody wins consistently every year.
You’d be much better off opening a cash business, and dumping in a couple thousand in cash every month.
And no one wonders how you are able to win so big, consistently, year after year, at the casino?
If you’re audited, then the casinos won’t have ratings for you that match the winnings you’re claiming.
I like the gold purchase idea. Travel around, buying small amounts of gold coin and bullion, and accumulate a decent stash, which you can then sell and pay phony capital gains. Make up a pen-and-ink spreadsheet that fictiously claims you bought an once of gold every two months starting back in 1990, and pay the taxes on the capital gain you “realize” when selling it now. Then you’ve a clean check from the dealer you sell it to and documentation that it would be almost impossible to disprove (assuming you could have credibly bought an ounce of gold every two months in 1990, that is).
If you can accumulate enough clean capital, buy a cash-intensive business, such as a strip club, car wash, pawn shop, or payday loan/check cashing store. It’s expected that the bulk of the revenue from these places will be cash, and there’s relatively little need to phony up expenses to match the cash inflow.
Again, obviously, you’re paying taxes on what you’re showing as income, but once that’s done, the money has clean ancestry from that point forward.
You can use a bit under the table to eat out, but any significant direct use of the money has risks.
Once you’ve cleaned your million, then a quick arson job on the establishment you bought will save you from anyone wondering why your business income suddenly went south, as well as getting a nice little insurance payoff! (Getting too greedy at this stage would be a big mistake – ironic indeed to successfully wash your illegal million and then get busted for insurance fraud!)
not to mention whether people really run to volunteer to declare 10K winnings like that without being forced to? wouldn’t that be fishy in itself?
I still don’t understand. The casino won’t keep records on such small transactions so you could make the claim without even going to a casino. If, for some reason the feds decided to check the tapes of the casino they would see that you are just cashing in the same amount of chips that you cashed out. There is no paper trail from a casino.
Can’t you just do this with the money instead of buying gold. Unless the bills are marked I don’t see any difference between stashing the equivalent in cash in your mattress over the years as opposed to making small gold purchases.
My first thought is to spend it little by little to supplement your lifestyle. There is a problem with that though. They change the bills design periodically. In between design changes, they series might change when they get a new signature on the front. Eventually, you’ll be spending really old currency and that will look strange.
If you suddenly become ‘rich’ without an explanation of where the money came from, you may be subject to scrutiny. If you suddenly become ‘middle-class’, there is less reason to be scrutinized. So just take your time spending the money. Buy used cars in private transactions, then trade them in for new cars, adding only a small amount of cash. Make lots of friends by buying rounds, tickets, charitable donations, etc… Open a marginal retail business, any extra cash you have is assumed to be unreported sales. If the sales tax agency comes after you, settle with them in cash. They are giving you cover by recording it on the state books in case another tax agency comes after you. Cover some with gambling. Buy gold jewelry, and other small valuables. Keep some money in a safe, bury some in the back yard, put some in bank deposit boxes. If you believe in Hollywood, put a suitcase full of cash in a bus station locker, because nobody ever checks those things.
The one big thing to avoid: Never tell anybody how you obtained the money.
You don’t need to establish the bona-fides of the whole million. All you have to do is establish a “legitimate” source of the extra money you have. If you make all of your everyday purchases in cash there is no way to track it. As long as you don’t make a very large purchase in cash, no one will notice or care.
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shijinn** - not really. The IRS doesn’t honestly expect you to (although legally you are required to) declare every little bit of gambling winnings on your 1040. But $10K or so would be enough to convince the auditor that I wanted to not be a felon and not declare it.
For that matter, once you’ve established yourself as a semi-big roller, you can do some gambling in Macao or some other country that won’t be sending forms to the IRS.
The “establish a business” idea is the traditional way to do it, but 1) I’ve been a small businessman. Too much like work. 2) I like Vegas. Even if all I did was blow through $20k or so every year, I’d still be staying at world-class hotels, eating at some of the finest restaurants in the world, and getting comped out the wazoo by the casino. The entertainment value alone would make this my plan for the cash.
Because it’s unlikely your $100 bills are from 1990.
And because the point of gold is that it appreciated greatly in value. You can claim to have paid $350 per ounce for gold in 1990. Today you can sell that gold for $1220 per ounce.
If you claim to have stuck a $100 bill in your mattress in 1990, today it’s worth… $100.
See the advantage now?
Yes and no. I’d probably play the same game as I do with Where’s George - if you break a large bill, you keep the change separately. Keep breaking bills as much as possible. I’m assuming that $1 million in a bag isn’t going to be in 5s and 1s. (One potential hitch is that people tend to give bills over $20 special scrutiny.)
Sure, for a million dollars, this’ll be rough. But it can be mitigated for nearly all purchases. Anything under a few thousand bucks and I’d be surprised if anyone noticed; above that, just mix in some new cash. How do they know you aren’t spending the money from Grandpa’s inheritance, which was stuffed in his mattress? Businesses aren’t out to get you. As long as it’s not counterfeit, I don’t think it’d be insurmountably difficult, as long as you don’t intend to flash your money around on huge cash purchases all at once.
To assist, I think getting a job or starting a business (or ‘business’) to move cash around would be good, too, of course. In the first five to ten years, it’s not a big deal, but past that it might be wise to plan to move money into goods that should keep most of their value. I liked the gold coin idea. I might develop a hobby in buying and reselling antiques and stuff like that - I used to do a similar thing with garage sales, reselling things on eBay, when I was looking for work after college. If I had access to more cash, I could definitely have raised the stakes on that hobby – and cycled through a lot of cash, too. Cash goes out, money comes in largely via PayPal. Heck, it’d be easy to fudge some sales, too, on stuff that cash would make sense for, like furniture. Even buying the occasional money order would work. If you claim it all on your taxes, who’s going to come after you?
And if you just spend the cash over time, you run the risk of someone asking why you are using 2010 bills in 2050 (or however long you dribble out the money).
LOTS of gold coins out there - collectible, non collectible, etc. With gold currently at around $1,250 per ounce, you get 50 pounds or so of Gold to take care of. Just go to coin collecting and gun shows and you can easily pick up some coins for cash.
Buy a pizzeria in one of those city blocks where there are apartments above the stores. Buy the building (on credit/mortgage). Combine all the apartments in your building into one blinged-out “Coming to America” style blinged-out condo.
Buy used vehicles in private transactions.
Develop a website that is anti-bank anti-establishment, and develop a reputation as an eccentric who only uses cash. Make the best pizza in town but refuse to accept credit cards.
Good point. If the million is in $100-bills, spending them can be problematic just because some merchants are reluctant to accept them.
Heck, go overseas, pay big bucks for a certified antique, come back, appear on Antiques Roadshow, fake surprise when the appraiser names a six-figure estimate, claim your grandfather picked it up an estate sale decades earlier.
Yeah? You better enjoy serious third world countries, or else I’ll see you in a few months coming begging. One million dollars is not that much money.
Personally, I would spend it slowly. I realize that I’m on the outside looking in, but I’d like to think that I could spend it conservatively over several years. I certainly couldn’t do it too quick, as the amount is 50 times what I make. Unfortunately, it would be disheartening to watch inflation eat away at your stash.