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wanderingaimlessly

SOBOVA

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Posted: 09/02/19 03:22pm Link  |  Quote  |  Print  |  Notify Moderator

Everyone is trying to blame the IRS on this. But consider,,,,,
What state or city you are in makes little to no difference to the IRS.
If you owe income tax of $100,000.00 of income whether you are in Kansas or Arizona really doesnt matter to them, your debt is the same.
State and local are a different matter.
$100,000 of income in Texas is of little to no concern, in Calipornia, it's a big deal.
When you are questioned about your income, question WHO is asking, chances are, it's localized.

westernrvparkowner

montana

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Posted: 09/02/19 03:51pm Link  |  Quote  |  Print  |  Notify Moderator

Lynnmor wrote:

westernrvparkowner wrote:

The IRS and it's software is pretty sophisticated. That software has profiles of most businesses. A restaurant that only accepts cash would be out of the norm. That the business only accepts cash is easily identified since it wouldn't have a 1099 from a credit card processing company. A cash business is always going to be subjected to greater scrutiny. Furthermore, it is almost a sure thing that such a business would be either a sole proprietorship or a subchapter S corp, meaning all the income would be filed under the business owner's personal tax return. Now add onto that the fact the business owner paid cash for an automobile which would require the auto dealer to file Form 8300, for a cash transaction over $10,000. If that business owner's tax return didn't indicate income to support such a cash transaction, you can bet an audit generated entirely by the IRS' software would be a real possibility. It isn't harassment, it is simply following a very clear road map.


You are correct about the cash transaction, and I already said that. The business is not a restaurant. The harassment is forcing taxes to be paid on income that was not received. Not every ketchup, coffee creamer, paper cup, etc. equates to a sale.
My mistake. Curious as to what business the IRS believes generates sales involving Ketchup, coffee creamer, paper cups etc. that isn't a food service business. (for my purposes a restaurant, a coffee shop, a food truck, a snack bar,a catering business and everything similar is a restaurant) I guess it could be a convenience or grocery store. But bringing in inventory, not showing the sale, and then not having that inventory in stock would pretty much indicate either a severe problem with theft or tax evasion. (Or conversion to personal usage which is also tax evasion).

* This post was edited 09/02/19 03:59pm by westernrvparkowner *

wanderingaimlessly

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Posted: 09/02/19 04:33pm Link  |  Quote  |  Print  |  Notify Moderator

westernrvparkowner wrote:

Lynnmor wrote:

westernrvparkowner wrote:

The IRS and it's software is pretty sophisticated. That software has profiles of most businesses. A restaurant that only accepts cash would be out of the norm. That the business only accepts cash is easily identified since it wouldn't have a 1099 from a credit card processing company. A cash business is always going to be subjected to greater scrutiny. Furthermore, it is almost a sure thing that such a business would be either a sole proprietorship or a subchapter S corp, meaning all the income would be filed under the business owner's personal tax return. Now add onto that the fact the business owner paid cash for an automobile which would require the auto dealer to file Form 8300, for a cash transaction over $10,000. If that business owner's tax return didn't indicate income to support such a cash transaction, you can bet an audit generated entirely by the IRS' software would be a real possibility. It isn't harassment, it is simply following a very clear road map.


You are correct about the cash transaction, and I already said that. The business is not a restaurant. The harassment is forcing taxes to be paid on income that was not received. Not every ketchup, coffee creamer, paper cup, etc. equates to a sale.
My mistake. Curious as to what business the IRS believes generates sales involving Ketchup, coffee creamer, paper cups etc. that isn't a food service business. (for my purposes a restaurant, a coffee shop, a food truck, a snack bar,a catering business and everything similar is a restaurant) I guess it could be a convenience or grocery store. But bringing in inventory, not showing the sale, and then not having that inventory in stock would pretty much indicate either a severe problem with theft or tax evasion. (Or conversion to personal usage which is also tax evasion).


As an example, A few years back, I had a 3 bay, self serve car wash. A quarter snatcher with 3 bays of wash and 4 vacuums.
I had a state tax collector accuse me of illegal business transactions because I was not buying enough water and sewage from the county. So my business was suspect. Problem was, I had a private well, and septic, but when the state lady, whom was clueless to what I was doing left, a month later IRS folks started sending letters and within a week showed up.
They left the next day, after I gave them the printout from my Bill changer which aligned with my quarter snatchers.

But until you educate them to how your cash business runs, they are clueless.

* This post was edited 09/03/19 04:04am by wanderingaimlessly *

Lakeland Bob

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Posted: 09/02/19 07:09pm Link  |  Quote  |  Print  |  Notify Moderator

Is it possible that the people "investigating" were from the Virginia DMV (or some such) looking to find people living in Virginia longer than allowed w/o registering the motor vehicles and TT?

beemerphile1

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Posted: 09/02/19 07:47pm Link  |  Quote  |  Print  |  Notify Moderator

If there was any truth to it the inspector was probably local zoning board or something related. A campground and a mobile home park operate under different rules. The inspector may have been checking the permanent/transient status of the residents.


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valhalla360

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Posted: 09/02/19 11:02pm Link  |  Quote  |  Print  |  Notify Moderator

Lynnmor wrote:


I know of people that have all cash businesses and they were investigated down to the coffee cups and ketchup packets bought. The investigation was triggered by an automobile purchased with cash.

Running and minding your own business is frowned upon, sneaking under the fence is encouraged.


If their estimates show the ratio of income to expenses off by 10-20% from typical for the business type, they won't pursue it. So no, if you bought an extra box of ketchup packets, they aren't going to open a detailed investigation because you have a cash business.

If you are off by 50-100% (or more), they have legitimate cause to question if it's a legitimate business and will dig in more deeply. That's when they are likely to question each and every business expense. If it's a cover for tax fraud, that will often turn up bad record keeping and other false information to support the case.

But to the original post...no the IRS isn't chasing down full timers to see where they live. Possibly the local govt but even that is unlikely beyond simply getting an idea of if people are living there.


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TravelinDog

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Posted: 09/05/19 02:54pm Link  |  Quote  |  Print  |  Notify Moderator

Another case of someone repeating a story told to them as truth. It's BS!

2012Coleman

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Posted: 09/06/19 05:11am Link  |  Quote  |  Print  |  Notify Moderator

Reminds me of a joke - An IRS agent and a Worcamper walk into a bar...


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Edd505

Elephant Butte, NM

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Posted: 09/06/19 08:28pm Link  |  Quote  |  Print  |  Notify Moderator

westernrvparkowner wrote:

Sorry, but tax evasion is just as much a crime as illegal immigration. Just because you don't like the approach to the enforcement of one law doesn't mean enforcement of all other laws should be suspended. In today's economy a cash business is an anomaly and does raise a giant red flag. The audit you describe would be the best way to catch tax evasion in that type of business. As a faithful tax payer I appreciate it whenever the government cracks down on those who cheat. They aren't cheating the government, they are cheating me!
BTW, I am sure an actual solution to the border problem would be greatly appreciated. I reside in the great middle of that debate favoring neither open borders nor a resurrection of the Iron Curtain. Currently all I see is a great deal of the flapping of wings and righteous indignation on both sides. What I don't see is a workable pathway to a solution.

Immigration is an issue, obviously you don't keep up on crimes committed by Illegals, sorry they aren't undocumented they broke the law entering. Being retired LE I follow this closely. This isn't the forum for this issue but I would be happy to provide multi news article on the issue.


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TravelinDog

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Posted: 09/11/19 03:44pm Link  |  Quote  |  Print  |  Notify Moderator

Edd505 wrote:

westernrvparkowner wrote:

Sorry, but tax evasion is just as much a crime as illegal immigration. Just because you don't like the approach to the enforcement of one law doesn't mean enforcement of all other laws should be suspended. In today's economy a cash business is an anomaly and does raise a giant red flag. The audit you describe would be the best way to catch tax evasion in that type of business. As a faithful tax payer I appreciate it whenever the government cracks down on those who cheat. They aren't cheating the government, they are cheating me!
BTW, I am sure an actual solution to the border problem would be greatly appreciated. I reside in the great middle of that debate favoring neither open borders nor a resurrection of the Iron Curtain. Currently all I see is a great deal of the flapping of wings and righteous indignation on both sides. What I don't see is a workable pathway to a solution.


Hmmm...I don't think I EVER seen anyone who even remotely looked like they were immigrants from another country camping at an RV park.
I'm still calling BS.
Immigration is an issue, obviously you don't keep up on crimes committed by Illegals, sorry they aren't undocumented they broke the law entering. Being retired LE I follow this closely. This isn't the forum for this issue but I would be happy to provide multi news article on the issue.


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