Dave Ritchie over at RealScam.com had an excellent suggestion for a very quick "due diligence" test: ask for their "IRS Schedule C", which is where their sole proprietor income will be reported, and most MLM income will be reported as schedule C. (Corp or partnership income are reported slightly differently, but if they are serious they should have equivalent documentation)
Once it becomes apparent your encounter with anyone is or will be taking place in the context of their role as an MLM business opportunity seller, control of your part in the encounter is completely in your hands. Simply ask the seller to defer their pitch (interrupt if you must) and inform them that it’s your practice to require reliable and objective evidence of a business opportunity’s viability before you invest your time listening to an entire presentation.
The evidence you will request is a true copy of your seller’s most recently filed IRS Schedule C for their MLM business. Line 31 shows their “Net profit or (loss)”. If this figure is positive, the proposition may merit further investigation, although you’re not necessarily safe. If on the other hand, line 31 shows a net loss, you’d be wise to assume that you too would sustain net losses in the same business.This test is so simple, you can remember it easily. The penalty of filing fake tax return should make most people hesitant to pass you a fake document.
Go read the full suggestion as it goes into a bit more detail on how to follow up when your recruiter start to hem and haw, or have his/her jaw drop as s/he tries to find the relevant counter in his/her sales script.
http://www.realscam.com/blogs/dave-ritchie/375-simple-strategy-distinguish-between-mlm-business-opportunities-bankruptcy-opportunities.html
