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.