A Tax Question

[Woolygimp]

There's a bipolar midget of a man named ToolmanTed, and he makes around $140,000 a year in untraceable cash.

ToolmanTed has no intention of paying his income tax on his untraceable earnings, and subsequently devises a possible plan. ToolmanTed's parents are rich, own a large business, file near perfect returns, and have never had any trouble as far as taxes are concerned.

So ToolmanTed asks his parents to show that they gifted him $12,000 on their tax return, and this amount would classify as tax free. So assuming his parents have nothing to worry about on their end [if they were to get audited], this would give him an excuse to have $12,000 in an investment account without stated income or employment.

[No money would trade hands. The $12,000 is Ted's money, yet it was just filed as a gift by a family member.]
$12,000 isn't enough though.

So what if his parents filed that they gifted each of their other four kids $12,0000 for that year...then those kids each file that they all gift $12,000 to ToolmanTed?

Hypothetically, wouldn't this excuse the $48,000 in investments in Ted's accounts even though he didn't file a return for that year?

ToolmanTed would post these questions himself, but he lost all of his indexes in a freak bowling accident that involved a stripper from Portugal, Crazyglue, and a cassette tape of Michael Bolton. Unfortunately he can not properly, and safely operate a keyboard instrument therefor I had to be the upstanding citizen and post in his stead.