amideislas

Well, the EU certainly relies on that information to assess the fees paid by it's members. Big controversy in the UK about that as we speak...

WriterChick

Darling... the books DO match what they report to the IRS.

That is pretty easy to do.

Also, unless they have suspicion, or it is a hugely successful business, they usually don't bother with you.

WriterChick

Listen... You can say it is illegal, and you'd be correct. You can say it is against your personal morals, and that is also fine, but morals are not universal. You can say it is risky, and that would also be correct.

But you cannot say it isn't happening, because that is incorrect.

It is totally happening. All the time. All over the world. And people get away with it.

Michael

Since the law was passed, the IRS has been making sure that compliance is done by larger businesses but they are working their way down the food chain. One of the BE members works at a bar in NYC that is complying.

If the business reports sales of a certain amount and it doesn't match what an IRS agent sitting at a bar sees being charged customers, it doesn't take a mathematician to figure out what is happening. From that, they can estimate the minimum 8% tips, total sales over a year, and it that doesn't add up to the tax return, then there are unpaid FICA and other taxes, and usually the IRS adds an additional 50% on to the tax bill since they also assume that the owner did not pay income tax on all of the sales. The IRS then notifies the state that sales taxes weren't paid and then the owner has problems with the state for both sales and income taxes. The IRS is very hard to fight once the tax bill is issued unless the owner's hands are very clean.

I'm not saying it will happen this year or even next year but the way it is going, it's likely to happen.

My ex's husband is a lawyer at his own firm and he got audited last year. They were trying to prove his expenses and they didn't keep very good records.

WriterChick

Yeah... I'm aware of that situation... funny how so many IRS agents have free bar tabs in NYC... Must be some sort of 'company perk' or something...

WriterChick

Medical, dental and bar tabs... LOL.

Same goes for Fire and Police Chiefs.

Odd.

Michael

If that is the case, then I suspect that the FBI will eventually get involved and then sh*t will really hit the fan.

WriterChick

LOL, no joke... THEY have bar tabs too. Not kidding.

amideislas

I find myself imagining a swat team, hundreds of police cars, and the FBI surrounding a neighbourhood bar because they didn't bother to ring up $1000 in cash received from patrons.

WriterChick

LOL

Beaverstate

Some version of Serpico I imagine.

WriterChick

Yeah. That is alive and well across all major American cities.

It is the American Way!!!

Michael

I can imagine that the FBI would arrest IRS agents for taking a bribe (free bar tab) since that is against federal law. They are both federal employees and if bribes were found to be widespread, the head of that district will likely be fired and replaced with someone that will enforce IRS law. Any agent that had a free bar tab will likely quit since the IRS agent probably couldn't do the job since the owner or employees may possibly tell the FBI.

Michael

Maybe NYC hasn't yet left the 1930s mentality but in San Jose, liquor licenses are pulled regularly. In fact, I'm well over 60 and I get card checked every time I go into one bar. They had their liquor license suspended three times and this is their last chance.

WriterChick

That is an unbelievably idealistic view of the world.

It isn't reality.

I cannot even tell you how many times I was told to place 'all his/her drinks on the donut tab' and at the end of the night, when they took out their wallet to tip me, there was a badge in it.

All sorts of badges.

Bartenders know this.

It happens in all States.

It is what it is.