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RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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Say there is a business who receives cash payments on a regular

Customer Question

Say there is a business who receives cash payments on a regular basis, puts the cash in the register and by the end of the day the work orders paid by cash are shredded and the money is pocketed by the business owner. Keep in mind the customer has already paid taxes on the service that was done. Is the deciet within the business and the law on taxes?
Submitted: 7 years ago.
Category: Tax
Expert:  RD replied 7 years ago.

Yes, this will be considered fraudulent and illegal. The business is not accounting for all the cash receipts and payments and paying tax on the net income from the activity.


Hence this would be tax evasion from income tax point of view.


If the customers paid sales tax on the services to the business and if the business does not report and remit the taxes than this will also be tax evasion from sales tax point of view.


Customer: replied 7 years ago.

if not only one employee, but two of them know that this is going on, and both have been taking notes of all the customers who have paid cash, how should it be reported?

Expert:  RD replied 7 years ago.

Here is a link to the award that you may get by doing this and also the form that you need to file to report this,,id=180171,00.html