patrick.net

DinOR,

I sense someone who listens to Car Talk :)

DinOR,

I think it is getting harder for the vending route types, because of electronic tabulation, etc. The taverns, etc. fall under all that IRS minimum statistical revenue stuff. They have to prove the didn't make a certain amount of money, not the opposite.

Antique dealers all cheat. Half of them probably don't even know when they're cheating; they just don't care about all but the basic rules. Same for any small-town storefront with low volume, high inventory, and irregular suppliers.

The real cheats, IMO, aren't all these guys though. The new cheats are the ACCRUAL-based personal small biz's. You know as well as I how much room there is for guys like us to game the system. I often feel like the sole chump because it seems like everyone I know is breaking at least 100 accounting and tax rules. Ever wonder about the "self-employed" guy next door who's some kind of contractor or consultant, but seems to only work about 5 hours a week? There's a pretty good chance he's making double your income and paying half your taxes. But at least he gets to contribute to his SEP because he made his sister a director of his S-Corp, and he can also tax defer 5x what you can in any given year.

DinOR Says: “go after all the cheating cash-based businesses”

> Before there was a housing bubble to complain about this was my pet peeve.
> Compared with the gangster like activity we see in RE today it kind of pales
> in comparison but is equally important!

Don't forget you don't need accept "just cash" to be a cash based business. When I write a check to "John Doe" the owner of John Doe plumbing all he has to do to get cash is walk in to a Wells Fargo with his ID and cash the check.

> Laundrymats? It got so bad with the owners “raiding” the machines for wheel barrows
> full of quarters the IRS now bills based on their power and water usage!

I've never met an apartment owner that declares the quarters from their laundry machines. They just roll the coins and "sell" them back to the tenants...

> Junkyards? How do we place a value on this “inventory”? Piles and piles of it! Want to
> pay for that chrome headlight ring with a check? Good luck. It’s cash on the barrel
> head at 99% of these places!

Don't forget the added profit they make after pulling the engine and tranny from a car with 150K on it and selling the engine and tranny with a tag that says "only 32K miles"...

> Sports Card and “Collectible” dealers? How many 11 year olds pay with a check?
> Some of the “greats” from yesteryear have 100’s of thousands in undeclared income.
> Anyone remember Duke Snyder?

Most card shops are fronts to launder money for drug dealers (does anyone wonder why South Central Los Angeles is full of card shops). If you look at the books of most card shops you will see that they paid $10 cash for a Reggie Jackson rookie card then sold it later that day for $10K in cash...

> The list goes on but these people laugh at us everyday! They see as the “unenlightened
> masses” going through their lives unaware that there are other “avenues” to wealth!

As taxes keep going up I think that we are going to have more and more people bartering and paying cash so the government can't get a cut…

P.S. A friend of mine comes from a family that owns successful restaurants and bars and they have never put a single dollar of cash money in the bank...

Don’t forget you don’t need accept “just cash” to be a cash based business. When I write a check to “John Doe” the owner of John Doe plumbing all he has to do to get cash is walk in to a Wells Fargo with his ID and cash the check.

This is why I do not use cash or checks. I use credit cards whenever possible. Most swipe systems require a merchant account.

I am all for abolishing cash. We should make ALL transactions accountable. Smart cards and micro-payment systems CAN make this economically feasible.

I am all for abolishing cash. We should make ALL transactions accountable. Smart cards and micro-payment systems CAN make this economically feasible.

...and be sure to invest in middle-man companies like Visa, MasterCard, Amex, etc. :)

But let's be honest, you'll still need cash if you ever want to go to San Gabriel or Miami. :(

But let’s be honest, you’ll still need cash if you ever want to go to San Gabriel or Miami.

Why? If cash is abolished then only gold or plastic will be accepted. :)

FAB,

I had NO idea that's what they were doing in "South Central". Seems to me that would be fairly easy to identify and shut down. Now that you've brought it to light it makes perfect sense though!

"breaking at least 100 accounting and tax rules"

Yes they are. What's worse is that so many of these guys don't even take the time nor effort to truly understand our tax code.

The only thing they know is that they're not going to pay it.

Randy, how many times have you called some of these guys, first out of legitimate need, then out of curiousity? One of the tell tale signs (for me anyway) is when you've left them a message on their ans. mach. NEVER get called back, then call back like SIX weeks later and IT's THE SAME MSG!

"Hi, this is Jack with _______ consulting and today is Friday May 3rd. I'll be out of my office until_______.

May 3rd! Dude this is AUGUST!

When you finally get a hold of them they will listen to you, make an appt. and then promptly reschedule it until........ well you get the idea. They know you're legit! You're part of "that" system. Then you find yourself wondering why they even bother to hang their shingle?

It's like they're the "floatsom and jetsom" of the business world. Dead leads, dead weight.

FAB,

Glad you solved that mystery! Now what are those "flower sellers" in the road medians really selling? :)

Most card shops are fronts to launder money for drug dealers (does anyone wonder why South Central Los Angeles is full of card shops).

...or all the Bedding and Mattress from NW Schaumburg to Elgin. I actually went in to buy a mattress in one once, and there were two guys straight out of The Godfather sitting at a little wooden table just through the rear door working on something in a nice leather folder.

It wasn't a bad mattress either. And pretty cheap, since Tony told me 50% off if I paid in cash.

How can card collectors and antique dealers make money if we dont encourage them. I am sorry I am not very much into antiques or cards or stuff that dont add value to my life. I am not a believer in One mans junk is another mans treasure. It still is junk for me and I might pay a dollar for it.

Every once in a while, one of those tax cheats gets caught. They end up owing massive back taxes, interest & penalties. If they are lucky, they stay out of jail. But they can't discharge the tax debt in bankruptcy. So they are basically locked out of holding a regular job for life (because the IRS will attach 25% or so of their wage).

The IRS is starting to crack down on these guys--20% down required. This may not sound like a lot, but that is 20% of the total tax debt, which includes interest and penalties:

http://tinyurl.com/s34t3

It’s like they’re the “floatsom and jetsom” of the business world. Dead leads, dead weight.

Back when I had a telecom software consulting co I used to Hire or W2 all my talent. I wouldn't 1099 unless they could corp-to-corp and could convince me they knew how to file their taxes correctly. I got stung by a 1099 not paying his taxes once and learnt that the IRS has the authority to move upstream with the failed withholdings demand.

Most other guys I knew running similar corps used shell "broker-employers" for all their talent so they could 1099 to that corp, which would mysteriously disappear whenever the audit notice was served.

I always thought these were the absolute scum of the earth. We already had 400%+ margins in that type of biz during that time. But that wasn't enough. These guys had to shoot for another couple hundred percent.

Look at advertisements added to the site since we started talking about evading taxes. These people who help evade tax paying should be prosecuted first.

Does it cost $25/hr per person to run a consulting company. All these H1 consultants get ripped off - the billing rates are above $100/hr but they get to see $25/hr and the rest goes to consulting company middle men. They are absolute ripoffs.

Phil,

It used to be alot worse than that. Guys would form LLCs, give the H1B guys stock (not options) and make them "employees", sponsor their visa, and designate them as member-managers. Then, when Mr. Bossman paid all his taxes but $15-$18/hr h1b guy didn't, the IRS would go after h1b guy. Meanwhile the real consulting company was charging $150/hr blended rates or $1000-$1200/day rates, and 1099-ing all the help back to the sham LLC.

Glen,

That link was valueble, refreshing and welcome! OIC has been so abused (as has the 1031 Exchange). It's became another stall tactic. A favorite amongst contractors etc.

"OK, you got me". But you know what? I'm flat broke but I DO employ a lot of people. (Every contractor that hires college kids and illegals "thinks" he's a big employer). If you hit me with that tax bill ALL out once I'm out of business, then I'll never be able to pay you back!

In truth, so many of these guys owe so much they WON'T LIVE LONG ENOUGH to pay it back anyway! So tell you what Mr. Cheat, we'll take 20% UP FRONT and you continue to make non-refundable payments until we straighten this thing out! God, I love it! About time. This old world will press forward somehow with one less contractor in it.

Could someone explain 1031 exchange in really easy terms? I saw it in an MLS listing the other day...

Phil,

I realize in the BA comments gravitate toward the tech sector and your definition of contractor is different but how many of you guys heard this one? Really typical for landscapers, tire shops etc. The "bookkeeper" shows income tax withholding for the employees but they never pay the employer's share? Then the bookkeeper (who's been listed as an officer of the corp.) gets stuck holding the bag when these sleazes split town! Very common occurence.

1031 is another preferential treatment we in this country extend to Real Estate! All Hail the United States of Real Estate!

Basically if somone owns a property and WOULD owe cap gains if they sold it they can exchange (within generous guidelines) for a property of an equal value even in another state. Since it's considered a "like for like" exchange there is no taxable event.

1031 is another preferential treatment we in this country extend to Real Estate! All Hail the United States of Real Estate!

I though 1031 applies to many things:

http://www.1031x.com/aircraft_equipment_livestock.cfm

I know you jest, but this terrorism threat is very real. And very serious.

I agree.

You could try an "economics vs. terror: which kills more?" a la the MOD lunch buddies in "Thank You For Smoking". (Can any grammar pedant finish this analogy: 'less : fewer :: more : ..."?)

Err.. as a thread topic, I meant. But with a housing connection.

I am surprised that I am not hearing about how the latest foiled terror attack is virtually identical to the Boijinka Project which was foiled in 1995, and barely made news.

I did see such comparison in Google News.

I remember the exact date of that dinner party, it was September 10th, 2001.

On September 10th, 2001, I had chicken kabob for dinner. I do not know why I remember. Sometimes, my food memory is pretty strong.

the libs are pissed because:
#1) no Americans or Christians or non-Arabs got killed

If you don't see the tragic irony in your own statement, then you have my pity.

I am disgusted by all extremists, but most so by our own extremists who are destroying this country by politicizing everything, regardless of basic decency. I wonder how much longer this seething hatred between the fringes in this country can go on before it rips us apart.

Randy,

I know this is way OT but I resent this lumping in of the left and the right fringes as if they're equally at fault. The radicalized left fringes in the US pretty much burnt themselves out by the early 70s and is now mostly composted of ignorant college Marxists with little knowledge about economics or organizing terrorist activities. They are tiny in number and have no influence on the more mainstream left.

Most of today's so called left holds values that would be considered mainstream 20 or 30 years ago, eg religious and racial tolerance, greater economic equality, avoiding colonial entanglements, questioning their own elected government. While they might not go about these goals in the optimal way, these are admirable goals nevertheless.

Outside of a few extremely fringe anarchist groups whose identification is as much to the right as to the left, nobody on the left advocate indiscriminate killing of civilians, and most folks on the mainstream left wholeheartedly supports the American troops, even if they don't support their actions.

On the other hand, the antidisestablishmentarians who calls anyone questioning any of Bush administration's activities a traitor, are a much more prominent fixture in the national landscape. It's the GOP operatives and leadership and FoxNews who is doing the vast bulk of politicizing and demonizing.

SP,

Ugh, yes.

(If only because the alternate line of reasoning leads to a US government or its agents actively colluding to have a continual "War on Terror.")

Are the Americans just getting the crappiest intelligence ever (oh, say the kind of intelligence provided by an Iranian double agent) or what? When this whole mess began, I thought the Delta Force would discretely administer a few well positioned shots and we'd move on to a whole new generation of terrorist leadership.

Sorry, I know, totally OT. Maybe I can venture a speculation about FBs becoming a rich ground for recruiting domestic terrorists and criminals. That's certainly happened in the 1930s, when massive numbers of foreclosure lead to more bank robberies.

new thread Unity

astrid,

I was careful to not use "left" or "right" in my statement. I think the linear polarization so popular today is nothing more than cynical self-identification. In reality, there is no "left" or "right", but an entire universe of opinion that largely overlaps in huge areas. To say McVeigh was conservative somehow doesn't seem to work, even though he was a self proclaimed patriot and religious fundamentalist conservative. The kneejerk "environmental" legal groups that sue to stop every single infrastructure improvement project are equally not liberal or progressive.

SFWoman,

I was thinking of Ahmad Chalabi, a Iraqi with confirmed ties to Tehran. The US's lack of intelligence assets (along with US's own mistrust of French and German information, precisely because of the fear of politicizing) covered up many of his lies and lead the US leadership to believe that we'd be welcomed with flowers and cheering crowds when we entered Baghdad.

I wasn't even aware of the lack of actual Iranian intelligence. That's really unbelievable, given that America has a large Persian emigre community and had extensive dealings with Iran since the 1950s. I guess before 9/11, we were only prepared for the threat of global Communism.

The New Yorker just did an article this week on US's defense expenditures, it's really chilling how the DoD (especially Rumsfeld) never stopped fighting the Cold War.

Randy,

Fair enough. Sorry for blowing up like that. I'm getting awfully jumpy and defensive from many years of other people characterizing my positions as "fringe" or "extreme".

SFWoman,

I forgot to add the New Yorker link.

http://tinyurl.com/nvobk

I’m getting awfully jumpy and defensive from many years of other people characterizing my positions as “fringe” or “extreme”.

What is your position on ceramic knives again? :)

The US better just keep Musharrif in place. At least he's not posturing in an openly hostile manner and might be persuaded to help with the right inducements. He also seems a bit better for the Pakistanis than his predecessors.

"What is your position on ceramic knives again? :)"

I'd still go with a set of MAC knives or nicer Japanese knives, maybe a ceramic vegetable peeler. Ceramic knives appear to be too fragile as ordinary kitchen knives.

astrid, sfwoman, sp, et al

I am not drawing any moral equivalency between your statements here and Bap33's. I find anyone who is willing to dismiss any group as a stereotype pathetic and dangerous. There are always exceptions. Often it is those very "exceptions" that are the great people who accomplish great things if they aren't killed or imprisoned first. Bap33 might find his own faith is based upon such an exception if he'd stop looking for "libs" hiding in the closet.

astrid,

I'm not sure I agree with your dismissal of the effect of "the other side", as you put it. These are the same people convincing parents to not immunize their children, managed health care to include aromatherapy and fringe homeopathy on insurance plans while well baby care gets cut, governments not to invest in GMOs which could feed millions in Africa, and policy makers not to hold a reasoned debate about solving our energy problems for fear that someone might say the taboo word 'nuclear'.

I think everyone on the fringe is doing plenty of damage to our country.

the libs are pissed because:
#1) no Americans or Christians or non-Arabs got killed

I hear that Conservatives are pissed because
#1) no Americans or Christians or non-Arabs got killed

Now there's no justification to nuke Iran - they're probably as much involved as this as Iraq was on Sept 11th.

Randy,

When we move out of political or militaristic fringes, then I'm a bit more uncomfortable with the assumption. A lot of the problems you mention stem from people's spiritualism and superstition, and it's an area that I, as an atheist, am extremely uncomfortable addressing. They also seem less than fringy to me, I seem to meet more people who are against nuclear energy than I meet people who are for nuclear energy. Ditto GMO crops, even though the econlogical dangers are exaggerated and the ecological advantages (less fertilizer, less pesticide) are proven.

The more general problem with the public (that I am comfortable talking about) is that very few social activists have any systematic knowledge about economics, statistics, or history, or even have the curiosity to try. Thus, they're constantly setting up false dichotomies to help their case, while condemning the other side as heartless kickers of puppies.

A lot of the problems you mention stem from people’s spiritualism and superstition, and it’s an area that I, as an atheist, am extremely uncomfortable addressing.

So you think astrology is superstition? :(