SITUATION
Skylar is a self-employed commercial artist who reports taxable income of $7,000 to the IRS. Actually, her income is considerably higher, but much of it takes the form of cash for small projects and thus is easy to conceal. Skylar considers herself part of the "underground economy" and defends her behavior as a tactic that allows her small business to survive. If the business were to fail, she argues, the government would receive even less tax revenue, so what difference does it make?
Question 1 Is the need to survive a reasonable defense for the practice described here?
Question 2 If the practice of concealing income is widespread, as implied by the phrase "underground economy," is it really wrong?