AJ, good responses, but you miss my point.

The business could be a "scam" and sell grass clippings for that matter. It could have "reported sales" of $50,000.00. The IRS or SS don't care. The wages paid out could be $49,999.00 for a net profit of $1.00, still they don't care. Now the OP has "earned income" of $49,999.00 and that would incure an additional $5,000.00 in income and SS taxes.

In this case where the OP was retired it might be more difficult depending on their previous earnings. But if a person was nearing retirement and knew in three to five years they were going to retire the last several years with hugh "inflated" wages might make a large difference. Larger than what the "extra" tax money would do if put in an IRA.

It might not apply to a person who worked under SS for their entire life but might for someone who started work later in life, a divorcee possibly.

Now what do you think? Workable?

Ken