A car wash lesson about the IRS

[Alan Bussey]

I don't recall seeing a news story about car washes and the IRS quite like this one. Very descriptive.

http://www2.timesdispatch.com/rtd/news/local/crime/article/TAXS04_20100503-222805/341944/

Wow.


Alan Bussey

 

[captain cw]

Wow is right! This story is wrong on quite a few levels. It's a good reminder to leave the cards on the table. Much better in the long run.

 

[rph9168]

A similar incident happened in Denver back in the early 80's. The guy did not do any jail time but had to pay a serious fine and interest on back taxes. There was also a case around the same time when a guy's wife turned him into the IRS when she caught him cheating and divorced him. While I am not recommending it if you intend to sell your wash you need at least three years of clean books, preferably five.

 

[pitzerwm]

Aside from someone turning you in or you do something stupid like telling the IRS that you were stupid, look at it this way. Now days you can't buy anything of real value without a paper trail. So if you are not reporting income, you only option is to pi$$ if off. I'd rather have my money working for me. A guy here with laundromats, had 3 sets of books but put the total money in the bank, so catching him was pretty easy.

I've been audited a couple of times and the agent will interview your neighbors about your life style/entertaining/vacations etc. Get your bank records and even follow you the day before the audit. What good that does puzzles me, since the audit is for a few years back.

Bottom line is that its not worth the problems. God forbid that you tell your wife/girlfriend/mistress you will be dead meat sooner or later.

 

[washnvac]

So the article does not say---did they sell the car washes? Must be decent volume car washes to clip off almost $400k in 6 years.

 

[bigleo48]

Had a guy in at the wash and he starts by asking me how I like the carwash business. They proceeds to ask me how much to build, how much is the land worth, was the city a problem getting permits...I figured he was looking to build a wash like so many others I get pocking around.

Then he says "Nice to have a cash business, you can skim without the tax man knowing". To which I replied "that's not a good idea...not worth the hassle or problems and it works against you when you try to sell". I also added "if i was looking to buy a wash and they showed me two sets of books, how could I trust or believe the guy on anything?"

He looked at me and said "good answer". Then admitted he was a tax auditor for the government.

Big