> Then dutifully declares the income as the gains from illegal activities and pays his taxes
This part is where you want to not say they were illegal. The IRS is saying declare all income, not admit the source.
So for this thought exercise, one would take the fifth on the income report, and report the income. Say whatever you need to say for the bank deposit to not scare the bank's compliance officer.
You want to avoid denial of service and denial of liquidity. So its inconvenient to make a reason for the money to be frozen for some time.
This part is where you want to not say they were illegal. The IRS is saying declare all income, not admit the source.
So for this thought exercise, one would take the fifth on the income report, and report the income. Say whatever you need to say for the bank deposit to not scare the bank's compliance officer.
You want to avoid denial of service and denial of liquidity. So its inconvenient to make a reason for the money to be frozen for some time.