It&#x27;s treated as income and consequently requires no additional enforcement. Whatever agency pays out this amount would also send some sort of 1099 like document. This information would be available to the IRS (which would also have greatly simplified tax rules with the other things GP is proposing). So if you fail to report your $11k on your tax documents it&#x27;d be glaringly obvious. If it&#x27;s your only income, you pay no taxes (and don&#x27;t get a refund, no taxes have been taken yet). If you have any other income, you might pay taxes on it at some marginal rate.