Quote:
Originally Posted by Shaun @ Tru6
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.
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this is rapidly changing.
cc processors issue 1099K forms which show cc processing totals for the year and by the month.
the Korean hair stylist is cash only to avoid paying taxes. cc's are deposited within a few days.
also note that state sales tax auditors also have in interest in proper sales records being kept.