... And of course the IRS also maintains a database of typical costs of living for every different US zip code area, thus they can project a typical cost of rent, utilities, groceries etc. Thus a dancer who does not receive 1099's proving that her actual income is above say $40k, and who chooses to report $20k in business income, might receive a proverbial 'knock at the door' if the IRS receives reports that the typical cost of living in her zip code area is $12k per year, that she registered a new vehicle worth $40k with an $8k down payment plus $6k per year in monthly car payments, that she paid $6k in college tuition over and above FAFSA loan and grant funding amounts etc.
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