IMHO - it depends on how much you want to wrestle or not.
Two easy buttons.
Return the money or lay low and wait until the fur flies - if it ever does.
No calls, all correspondence in writing. If laying low, do not make any contact, let the other party initiate all contact via written correspondence, Do not respond in any way unless summed for Court. Do not respond to lawyer threats. Do not answer phones, texts, etc. wipe these people from your radar as though you never heard of them. Document the gift as a gift.
If the fur starts flying, i.e. being sued, then ask for W2 or 1099 form. Document injury and let it be known medical and lost wage potential will be part of the suit. Let it be known that in good conscience, you’re going to show all income on your taxes, even if you have to amend prior years AND make known your willingness to cooperate with the IRS on a farm audit after you whistle blow.
My guess is they will go away - anyway. I’d advise hitting the lay low easy button and it will all probably blow over.
I feel your pain as my 90% of my hay goes to horse customers and a couple of them are nuts.
Now go out and trade one of those Farmalls for an Allis Chalmers WD45 tractor you’ve secretly always wanted. If necessary, launder the $200 gift into it as a city slicker judge would never believe anyone would spend $200 on 45 and you’re free and clear...🙂
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