Any time a business receives payments regularly in cash, the business can be a target of an IRS audit. It is tempting for many business owners to forego reporting cash receipts, not realizing the many ways the IRS and Department of Justice Tax Division can catch up with them. Discovery by the government could be as simple as an audit with reported income not high enough to support the taxpayer’s lifestyle, or a whistleblower claim from an honest taxpayer tired of knowing details of how a coworker or even family member is cheating the system.
A Fort Lauderdale male escort is learning just how painful the reality is when he under paid tax over a period of approximately four years totaling nearly $278,000. He will have to repay the tax, and will spend nearly one month in prison for every $10,000 in tax loss. Certainly something to think about if tempted to underreport income.
To read more about the litigation, click here.
For assistance with tax compliance for prior years of underreporting income, please contact our office.