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I'm sure that this thread will get little response, if any at all. I was curious about contractors that do everything with cash. They take the homeowner's check and cash it at the homeowner's bank. :whistling

I don't understand why they just don't write all of their taxes off.

Most of the contractors that I've talked to that do this said that the IRS can't touch them when it comes to taxes. I know of one contractor, though, that had a $18,000 penalty. I forget how much he owed. But, he takes vacations every other month. He's going to China a couple of weeks from now and just came back from a Tennessee and South Carolina trip last week. :rolleyes:

Are you seeing a lot of contractors doing this?
 

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Thom
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Quality....

It's called tax evasion, it's a felony, your friend is a felon. You would be foolish to trust him.

As for getting away with it, he will, until he gets caught. It is unlikely but, you know, others probably do also. Just takes one person turning him in to the IRS. If someone had some listing of his spending and some documentation of the jobs he does, they might even get some money out of turning him in.

Sometimes IRS just does a lifestyle audit. All they need is evidence of evasion, then they presume your income, going back as far as they wish (no statute of limitations on income tax evasion). The only way to beat it at that point is to prove them wrong (good luck with that). When it comes to taxes, you are presumed guilty, it is your responsibility to prove you are innocent.

So, what happens to him when/if he gets caught. Maybe they work out a payment agreement (they will take most of his stuff). Maybe he goes to club fed.

It would be foolish to go there. It was foolish of you to ask about this on a public forum.
 

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This space for lease
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I hired my first employer in the trade, he filed bankruptcy due to over extending himself. I found out that lots of folks were trying to get their meat hooks into him. I doubt any of had much success. Except for one, the IRS. They won't let you skate and can dig into you finances if they think its' worth it. I got a letter once from the IRS for a bill for $90,000. Imagine my relief when I saw it was mailed to my business but addressed to him.
 

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There is nothing wrong with taking cash. I received over $6000 worth of cash payment this week.

Now what he is doing seems a little different. Unless they make the check out to him personally, he wouldn't be able to cash it at the homeowners bank.
 

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I'm a Mac
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The government is your silent partner and wants to be paid. They don't like when you try and cheat them.

Picture a big big wheel. Always turning, it may pass you today but eventually it rolls around and catches you, it's been turning before you started and will continue to turn long after your gone. It doesn't stop for no one.

Your friend thinks he's winning but he's not. He has limited his resources by not declaring income, he could be further in this game of life by showing who he is and what he can do, basically his business can only grow so big and it stops.

And once you realize how much time you spend looking over your shoulder and trying to cover your tracks and start doing it the proper way, you excel and actually make more money.

And as said, a check is not cash, it's a paper trail, tell your friend not to bend over to pick up the soap. And ya those lifestyle audits...they're real.
 

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I own stock in FotoMat!
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I find it incredible that as soon as anyone mentions cash, the conversation instantly turns into a tax fraud melee.

Accepting cash is not against the law. Cash is printed with the following right on every bill: "This note legal tender for all debts, public and private." So accepting cash is not only legal, but condoned by Uncle Sam.

And cashing a check is not tax evasion. So what's all the hullabaloo about?
 

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I find it incredible that as soon as anyone mentions cash, the conversation instantly turns into a tax fraud melee.



Accepting cash is not against the law. Cash is printed with the following right on every bill: "This note legal tender for all debts, public and private." So accepting cash is not only legal, but condoned by Uncle Sam.



And cashing a check is not tax evasion. So what's all the hullabaloo about?

From my understanding this guy most likely is. The only way to cash a check at a homeowners bank is to have the check written out directly to you and not the business. I'm sure if he's asking for checks to be written to him and not the business, it isn't because he's honest.
 

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I'm a Mac
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I find it incredible that as soon as anyone mentions cash, the conversation instantly turns into a tax fraud melee.

Accepting cash is not against the law. Cash is printed with the following right on every bill: "This note legal tender for all debts, public and private." So accepting cash is not only legal, but condoned by Uncle Sam.

And cashing a check is not tax evasion. So what's all the hullabaloo about?
The OP stated that it was to avoid taxes
 

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" They take the homeowner's check and cash it at the homeowner's bank."

"I don't understand why they just don't write all of their taxes off"

What is there not to understand?? They are not professionals, not in the slightest meaning of the word.

The people who hire them are getting exactly what they bargained for, an unprofessional who does not have a bank account, probably pays for the last job with the money from then next, skirts the tax laws, and works out of a broken down truck with an old magnetic sign that if you call the number from it you will get Chinese Take Out.

I'm really not interested in these types of people who do that, I already have them pegged, what really intrigues me is the customers who go along with that.

Seriously, anybody reading this, how would you react if you hired somebody and they cash your check at your bank? Come on, three RED FLAGS of a bum!
 

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This space for lease
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I find it incredible that as soon as anyone mentions cash, the conversation instantly turns into a tax fraud melee.

Accepting cash is not against the law. Cash is printed with the following right on every bill: "This note legal tender for all debts, public and private." So accepting cash is not only legal, but condoned by Uncle Sam.

And cashing a check is not tax evasion. So what's all the hullabaloo about?
It was sort of the implication of the OP, with the guy taking frequent vacations, etc. There's no wrong in taking cash, love the stuff myself, but if you aren't claiming any of it and you get audited and have a new car, lots of vacations, new boat, lawn tractor, etc and only made $20,000 last year you might have some 'splaining to do.
 

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I own stock in FotoMat!
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From my understanding this guy most likely is. The only way to cash a check at a homeowners bank is to have the check written out directly to you and not the business. I'm sure if he's asking for checks to be written to him and not the business, it isn't because he's honest.
I've cashed many a check written out to my business name.

But it's not to evade taxes.... it's to make sure the check is good.
 

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I had a lady give me 35 grand in brand new 20's one time. It was kind of annoying, but fun to play with piles of money for a night until I deposited it the next day
Did you count it before you accepted it, or did you trust her? :whistling
 

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Some people get a kick out of being dishonest - "getting away with something". Cash (not checks) payments to employees, cash only (not checks) for services. It isn't just contractors.

On the contractor side, these are the same guys that don't pull permits, from what I've seen. Why make an honest buck when you can have the satisfaction of making a dishonest one....

A guy I know was caught. Not only is he paying off what he owed, but he's paying penalties and interest as well. Has been for a few years.
 

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I'm a Mac
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Ok, why did she pay you that in cash? No reasonable person has that much cash around, it raises suspicion of illegal activity and causes a slurry of questions as to why.

I had a guy wanting to pay me an entire project in cash, but not to deposit it, it would raise red flags, and I can't run my company upside down.

Cash just isn't worth it
 

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I had a lady give me 35 grand in brand new 20's one time. It was kind of annoying, but fun to play with piles of money for a night until I deposited it the next day
I've had a few pay in large sums of cash and it's more of a nuisance than anything. Credit cards are nice and easy.
 
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