illegals and small businesses

stevepaa · 03:42 PM

I never have had dealings with illegals, but I am concerned about the strain they put on our social support structure.

This weekend I was in PHL and met one of my wife's cousins who has done very well for himself. He started a window washing business in NY and has flourished, and now is planning to develop a 60 acre parcel in West Chester. His kids all went to private schools and private colleges. My wife always held him in high esteem until this weekend.

It seems he built his business up the old fashion way, hire illegals, do a cash business and keep two sets of books. This he learned from his parents and some of his aunts/uncles who had their own businesses. He continues to hire illegals to farm his 60 acre parcel, so he gets a reduced taxation rate until he can readily develop it. He pays in cash and the rest of us get stuck with the bill for the support services

My brother in law does everything strictly by the book in his business, although his dad ran a cash business and had two sets of books also.

So I was wondering, what percentage of small businesses do you guys think cheat?

Porsche-O-Phile · Porsche-O-Phile's Garage

Probably more than people think. I'd say in the 40% range. Higher for restaurants and other "unskilled" types of businesses.

Why not at least confront him face-to-face about it? He IS the problem, after all.

The other 900-pound elephant in the room that nobody talks about is homeowners. Many of the same people that b1tch and complain about illegal immigration are the same ones forking over cash to their gardeners, pool guys, landscapers, handymen, day laborers and residential contractors that ALL either are or use illegal labor.

I even went so far as to ask the guy who comes into my office every day trying to push sandwiches and crap if he's in the U.S. legally. He said yes and even presented his green card. I thanked him and said I hoped he wasn't offended by my question and that I was glad he was working hard and doing well in the U.S. Bought a sandwich too. Wasn't too bad.

Until people start doing stuff like that and confronting the problem head-on though, it ain't gonna' go away.

stevepaa · 05-31-2006, 03:54 PM

Yeah, I think she might next time. She told me this after the party we were at for my niece who graduated from Penn State.

But I think his answer would be one I can imagine his mother would say even now to rationalize her double set of books. " Why should we get taxed on all our hard work to support all those lazy people who won't work to support themselves?"

Rick V · 05-31-2006, 04:08 PM

Hears an idea, if there is a company using illeagals, set the illeagles on fire and send them into the building! Although I can see some insurance fraud after the fact. Forget I said anything

Hugh R · 05-31-2006, 05:08 PM

Cheat....

You mean like write off the personal car, understate income, things like that, or just the illegal thing? 40% I would think is low.

jhc · 05-31-2006, 06:11 PM

A lot of the loudest uber patriotic USA types are strictly cash only and don't pay any taxes.
Most corporations and government institutions outsource to the lowest bidder.
It turns out that the books are cooked at the highest levels of business and government.

LeeH · 05-31-2006, 06:22 PM

If "cheat" is strictly defined then 100% of small business owners cheat. I deal with this stuff every day.

Is the cell phone 100% business?
Is the mileage 100% business?
Is the entertainment really a business meeting or just taking the spouse (aka the VP) out to dinner?
Was the Wal-mart charge on the credit card really all office supplies or did a few personal items find their way into the cart?

I'm amazed at what people try to pass as business expenses. We disallow the obvious stuff, but have to take the clients word for the rest. If they get audited it's between them and the IRS.

techweenie · techweenie's Garage

I have several friends who would have to close their doors if they could only hire "legals."

gaijindabe · 05-31-2006, 06:26 PM

A lot of folks cross that 6-figure mark someplace and figure themselves "upper middle class" and no longer need to do the things Mom & Dad did - like cut the lawn, wash the car, clean the house, cook the food & etc. Economists have a word for it.. Anyway, the rest of us are really subsidizing their lifestyle chocies.

singpilot · 05-31-2006, 07:36 PM

I was looking for a 90% or higher button.

Moses · 05-31-2006, 09:33 PM

Quote:

Originally posted by singpilot
I was looking for a 90% or higher button.

+1

stevepaa · 06-01-2006, 08:14 AM

Yeah, I should have put a higher button, now that I think about it. I only personally know of four family businesses with from 50K to 4M in profit. Of those two cheat. And I use cheat to mean either hiring illegals or using double books. I am not too concerned about the personal use of business cell phone, etc.

lendaddy · 06-01-2006, 08:19 AM

Anyone that runs a cash business cheats PERIOD.

Jims5543 · 06-01-2006, 09:30 AM

Quote:

Originally posted by gaijindabe
A lot of folks cross that 6-figure mark someplace and figure themselves "upper middle class" and no longer need to do the things Mom & Dad did - like cut the lawn, wash the car, clean the house, cook the food & etc. Economists have a word for it.. Anyway, the rest of us are really subsidizing their lifestyle chocies.

Crossed the 6 figure mark and will be damned to have someone mow my lawn, clean my pool or do anything else I am quite capable of.

I had to hire a lawn service for my vacation home in NC and it killed me. BTW- the lawn service consisted of a friend of a friend who is not illegal.

As far as cheating goes. As a small business owner I can say every move I make is weighted by, "what if I am audited?" I pay out more in taxes in any given year than most make in salary.

I have an accountant keep my books and everything is legit. We do not get crazy with the write offs and just take our lumps so the Pentagon can have $700 toilet seats.

If I ever get audited I will probably get money back.

The girl I do my mortgages with said it was refreashing to see a small business owner that actually shows his income on the books. Most bury it and show being barely in the black. Yet, they drive H2's and live in McMansions with the Doctors and Lawyers. When it comes time to prove your income they can't because they hid all of it.

90% cheating might be too low.

Tervuren · Tervuren's Garage

Add another small bussiness here that doesn't use illegals.

vash · vash's Garage

there are lots of ways to cheat without hiring undocumented folks.

cantdrv55 · 06-01-2006, 11:06 AM

It's not just small business who cheat, it's also the homeowner who hires help around the house. Help as in the landscaper whom you know have suspected illegals trimming your lawn or the general contractor who uses suspected illegals. Why? Because their estimates are always going to be lower than those who have full worker's comp insurance and licensing.

scottmandue · 06-01-2006, 11:37 AM

Quote:

Originally posted by Hugh R
Cheat....

You mean like write off the personal car, understate income, things like that, or just the illegal thing? 40% I would think is low.

Yeah, why just single out the people who hire illegals? Unfortunately cheating has become the status quo in America i.e. fudging on your taxes, taking things home from work, *****ing off at work.

Funny my dad ran a air conditioning contracting business for more than twenty years and only hired my brother and I, two guys we went to school with, my friends wife to answer the phone, my mom was the bookeeper, and when we got too big to do the service work ourselves two guys he knew from church to do that.

stevepaa · 06-01-2006, 11:55 AM

Well, by cheating I meant that we pay for their practices. It seems illegals are a big player for small business cheating as well as having two sets of books. The others, like exaggerating donations on taxes etc, just don't equate to these two in my estimation.

As for general homeowners using illegals, I think it is a drop in the bucket. Only two guys in the neighborhood use a gardener, the rest of us six figure guys do it ourselves.

singpilot · 06-01-2006, 12:06 PM

Had an interesting dinner conversation with a large (90 employees) pipeline contractor. He said all he is allowed to check (in Mexifornia) is a valid address (phone bill, utility bill), and a valid Social Security number (How hard would those two things be to come up with?). He has an 800 number to call, gives his employer ID#, and reads the SS#. All they can tell him is that it is valid. Not even the name match, nada else. Once he has 'verified' this, he is legally off the hook. He says he 'suspects' some of his workers are 'visiting' this country, but he is not allowed to ask, and they are sure not telling. He said with the wages he pays, McDonalds would be a career. Even at that he is underbid by guys he knows do not have an english-speaking crewman in the house.

His opinion is that the cat and the cow have left the pasture, and will never be put back in the barn.