Venmo is a peer to peer social networking type of payment service. It’s not much different than Paypal (in fact, it’s owned by Paypal). Like Paypal, it’s not an employer, so even if you get paid $2000 by someone through Venmo(or Paypal) it’s not reported. That money could be someone paying you back for something, buying something you’re selling, etc. So, no, it won’t be reported to any tax authorities but that doesn’t mean you shouldn’t report it if it is associated to income. By the law, any income received should be reported on your tax return. Even if you did not receive a W2, 1099, etc. from the payer. Babysitting money is income. Receiving money from someone via Paypal or Venmo because they owe you or maybe you went to dinner and paid the whole bill and then they Venmo you their share is not something you need to worry about. It’s no different in that scenario than the friend giving you cash to cover their share. So yes, add up all the baby sitting income and be sure to report it if you want to be fully truthful on the E-QIP. Do most people not report income paid as cash for odd jobs like babysitting? Probably not. But most people aren’t going for a security clearance where they have may be subject to a polygraph and don’t want to be caught in a lie.
Your income 7 years ago for which you received no W2 for, nor did you include that on your tax return, is a dicey one. The SF85 and 86 forms ask about financial related concerns going back 7 years. And while you may have genuinely not been aware that you should report it if the W2 wasn’t provided, the tax law doesn’t care. If you made, for example, $20,000 of unreported income, it still must be reported even if you end up owing nothing and getting a full tax refund. You may even be entitled to a refund if the employer was deducting taxes!
So, you need to address this one and clear it up so you can truthfully report it on the E-QIP and be able to speak to it when you get interviewed during the BI. Start by making an appointment with your local IRS office. They may advise you to file a 1040X (amendment), depending on how many tax years it has been. Do you have any records of what the income was for that job that didn’t report it? Do you have your last paystub of the year for it that would show total gross income? If the IRS had received your W2 from your employer, you would have gotten a bill at some point to pay back taxes plus penalty and interest. Since it appears they didn’t, you may have to dig some.