1. Jayanna, an advertising consultant, is contemplating instructing some of her clients to pay her in cash so that she does not have to report the income on her tax return. Use an available tax service to identify the three basic elements of tax evasion and penalties associated with tax evasion. Write a memo to Jayanna explaining tax evasion and the risks associated with her actions.

2. Using the IRS website (www.irs.gov/index.html), how large is the current estimated "tax gap" (i.e., the amount of tax underpaid by taxpayers annually)? What group of taxpayers represents the largest "contributors" to the tax gap?