Am I going to jail for mistating income for unemployment?!
October 14, 2009 9:30 PM Subscribe
IL-UnemploymentFilter: Am I going to jail for misreporting earnings from an affiliate site of mine that sits there and makes money while I've been job hunting?!
posted by anonymous to Law & Government (6 answers total)
I was laid off in June from a job in Chicago. Before that occurred I had developed an affiliate website that has been earning me about $300/mo consistently, and I have the funds deposited into a bank account with an EIN that is setup under a sole proprietorship.
Since I was laid off I also applied for unemployment benefits and had told them when I certified each period that I had performed no work for wages.
It has since come to my attention that this may be a bad way to do it, and possibly considered fraud since apparently any earnings under a sole proprietorship are considered as part of the "gross income", and thus I should have reported the commissions I earned each month.
So there's that piece...I also have an LLC setup as I've been trying to launch my own business. I have done a small bit of consulting work with the funds going into the LLC, and I've also just today redirected my affiliate site revenue into the LLC. My understanding is that as long as I don't draw a wage from the account into my personal account, its not considered personal income for unemployment purposes as it is a separate entity and thus I don't need to claim anything and can collect benefits--but I'm not sure of this.
My questions (sorry, there's a few) are as follows:
1. Once the taxes for this year get processed and IDES finds out I had earnings from my affiliate website, are they going to try to collect the overpayment?
2. Realistically, will I be going to jail for this? My gf and I are completely freaked out that I'm going to get put away for earning a little from an affiliate site because I didn't realize I should have reported it.
3. Am I correct that as long as funds are going into my LLC and I'm not drawing a wage from it, then I'm not considered to have earned anything for that period, and thus don't need to report anything for unemployment and can continue collecting as normal?
4. What should I do now? I'm terrified about calling IDES for clarification because I feel like they'll log my phone number, hunt me down and toss me in jail potentially. I considered contacting a lawyer but have no idea what type would specialize in this area and not sure if it makes sense to spend the money until IDES starts asking about things. I'm the type who tries to be honest above all else, but in this situation I'm terrified that if I just call IDES and explain the situation they're going to open an investigation and jail me.
5. Should I tell IDES I've gone back to work and stop claiming benefits for now? Or is it ok to continue collecting them now that I've moved all income to my LLC and am not drawing a wage?