If it is garage sale type selling, like stuff she's bought/been gifted and then sells for less than retail value, then no.
If she goes out and specifically buys/makes stuff to sell for profit, then yes.
That's the short answer, but there are many variables that play into this. Personally, I'd rather pay taxes than get nailed for tax evasion. I'll bet Big Brother is watching Paypal transactions and such.
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