Quote:
Originally Posted by Jim Richards
The barber shop I go to is a cash only place. I think that some of the cash-only businesses do that to avoid credit card transaction fees (2.5-3%), and some do that to avoid paying their fair share of taxes. I wonder how closely the cash-only businesses are scrutinized by the IRS.
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A cash only business can only be scrutinized when the IRS knows they are cash only which would probably be an auditing event. Otherwise, the IRS would never know. When you check Cash vs. Accrual on the company tax return, that's just the type of accounting you use.
It is interesting to me when cash only businesses I've been to for years suddenly start accepting credit cards. Same amount of business so probably safe to assume they were audited.