B2,

Technically, don't you work for the government? hmmm, isn't the IRS part of the government? LOL Just kidding.

This is a very personal subject. It's like asking if you download MP3's off of Kazaa.

I personally claim all my income and then offset the income with expenses via my Schedule E. I do all of this via Quicken and Turbo Tax. The only "gotchas" are when you start allocating auto expenses between personal and business use, home office/studio expenses, depreciation, etc. If you are diligent and detailed you can get by with using TurboTax. If you are lazy and don't like to read tax codes, pay the $300 bucks or so and let an accountant take on the risk.

Hope that helps a little.
Al