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how do the tax evaders do it?

Discussion in 'Lawn Mowing' started by bobbygedd, May 5, 2004.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    there are people, who are doing lawns part time, and have been for years. they accept cash, checks. they deposit everything into thier personal account, they are not registered as a business, they do not pay a nickles worth of taxes. they do cr@ppy work, but guess what, having zero overhead, that $22 they are charging for the lawn, becomes all profit, even if they are killing themselves to earn it. my thing is, how do they sleep at night. i'm so paranoid about even accepting checks made out to cash, that i just deposit them into the business account, i don't play games. how come these guys arent afraid of like prison or something, don't they arrest you for stuff like that? i am finding out that it's true, we all have our place, the world needs low level services, because there are low level clients, i unload cr@ppy clients to these guys, but how do they sleep while they are avoiding paying taxes day after day, year after year. the fear of being caught would kill me.
  2. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    They're not afraid of being caught because the chances are slim that they will. The IRS is not worried about some Jerry-Jackleg who's putting a couple grand in his pocket. They have limited resources to catch tax evaders and they are more worried about the big fish. Sure, every once in a while they will do a random audit but most of their collections are because someone turned someone else in. Like a guy who's buying a half mill house on a 50k salary. Those kinds of purchases are reported to the IRS and your income better match the purchase or the IRS will want to know why it doesn't.
  3. EastProLawn

    EastProLawn LawnSite Bronze Member
    Posts: 1,110

    Richard hit the nail right on the head. The IRS just does'nt have the resources to check out very Tom, Dick & Harry, and as long as they keep the deposits low and not showing 10's of thousands of dollars nobody will question them. I personally know of one guy who has been doing it all P/T & cash for almost 32 years and has never had one problem.
  4. fprintf

    fprintf LawnSite Member
    Posts: 53

    I know a guy in mixed construction/lawncare biz that just built a 3/4 mill house and regularly reports income of 50k. One of these days he is going to get caught - turned in either by his disgruntled neighbors or p'oed customers.
  5. RTallday

    RTallday LawnSite Member
    Posts: 214

    I do the same thing bob, i deposit ALL checks into the business account, however from time to time i get cash, and it stays cash. Like Rich Martin said, a few grand in someones pocket isnt going to kill anyone. Remember Enron?

  6. kc2006

    kc2006 LawnSite Silver Member
    Posts: 2,442

    I'm one of those guys, but i keep track of it all and I will pay taxes on it, when i say i'm one of them i mean I dont have a registered business. I don't charge 22 bucks only either, i only do high end jobs. I am worried that something will hit the fan but i have documented every penny coming in so its all in this book if they ever question me.
  7. Gravely_Man

    Gravely_Man LawnSite Silver Member
    Posts: 2,076

    Bobby, you can’t even believe that it all works out in the end. Sometimes it does and other times it doesn’t. You can only do your best and worry about your business. I too could not do this as I would always be worried that it would catch up with me. Hopefully it will catch up with these people.

  8. P&C Lawn Care

    P&C Lawn Care LawnSite Senior Member
    Posts: 373

    Sorry but these guys who have been doing this for years are not ALL doing cr@ppy work, or they wouldn't keep doing it for years. Granted there are some guys who don't pay taxes and do cr@ppy work but I am sure there are taxpaying guys who do the same cr@ppy work. They just aren't doing enough volume to raise any red flags. They have no business account and checks go to their personal account/cash goes in the pocket. Some people think that they pay enough in highway taxes, homeower taxes, property taxes, sales tax, gasoline tax, taxes on utilities, phone service tax, automobile tax, registration tax, and the millions of other little things that are taxed (Oh did I mention INCOME TAX). They play the odds just like any gambler does.
  9. robertyb

    robertyb LawnSite Member
    from ga
    Posts: 105

    The odds are in their favor for not getting caught as enforcement at this time is pretty lax. But, my buddies at IRS have told me that their Commissioner is ready to crack the whip and put them back to work again (mine already has). The days of "kinder and gentler" are about over. The problem is that if you do not report all your income they have seven years to pick up on it and audit you. If you filed a return and they can prove you intentionally omited to include taxable income they can tax it, add penalty and interest to date and even charge you with willful tax evasion which is a felony offense punishible by time in a Federal Detention Center, a/k/a The Big House. They can sieze your property and sell it for back taxes also. They will definitely at least file a Federal Tax Lien (Fi. Fa.) against you and that alone will ruin your credit for 10 years.

    If you do not file at all there is no Statute of Limitations...... :(
  10. Mark McC

    Mark McC LawnSite Bronze Member
    Posts: 1,565

    Another problem with not reporting all income is that you can't get as much credit to expand your business. Furthermore, the more income you report, the better your social security benefit when you got old and all used up.

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