<prompt> Human: I filed my 2012 tax return a few months ago and received a 1,700 refund from my federal return, and 160 refund from my state return.Ive never fully understood reporting my freelance income. My freelancing activities are not under a business name - - theyve always just been a side hobby that happens to make some money on the side. Ive been freelancing since about 2008, but didnt really start to make more than 1,000 a year until about 2011.For past freelance jobs, Ive always reported the money IF I received the proper forms. But not every client has provided a form, usually because the project is something like doing wedding invitations for a friend or a small website for a friend of a friend.To make a long story short, I use invoicing software so I know that I made 4,700 in 2012. This was not reported. I have already received my 2012 refund and of course spent in on paying off various debts and bills. Not Im panicking because I realize that I probably owe a shit ton for the money that wasnt reported, and I dont necessarily have that money because it was spent.What do I do?!Assistant: If the companies dont send you the proper forms it may not be reported to the IRS at all and you be fine. With that said. Its probably not a bad idea to keep about 30 of your 4700 dollars in freelance money to pay if it comes to that. Human: Can someone else verify this? Not that I dont believe you, Keith, but I just want to be sure so Im not slapped in the face in 5 years with outrageous amounts of interest debt.Most of the freelance work that I did was with individuals, hence never receiving any forms. If I received a form, it was reported.Is money received in this fashion treated like a gift? Or are gifts even supposed to be reported?  <response>: Of course its not a gift. Receiving money in exchange for goods and services is the definition of economic activity, so of course it is taxable. The correct legal and ethical thing to do is pay the taxes that you owe on the payments for the work that you contracted for and performed.Keith was pointing out that since you didnt receive any paperwork, its likely that the IRS wont have any way to track you down for this economic activity, so thus itd fall in with other activities on the gray market wherein someone is paid cash under the table on an unreported basis. 