Tag Archive for cash

Cash Is A Good Way To Get Clobbered For Taxes!

Restaurant menu template in grunge retro style vector illustrati
Hiding Receipts By Cash Is A Tax Issue

For many years, small restaurants, bars, pizza parlors, ice cream stands, and other food establishments have used all cash systems to hide their income and not pay sales tax and income tax on the full receipts. In New Jersey, the Division of Taxation has created a very aggressive system where they make up excessively high mark ons from food and liquor purchases, and absolutely slaughter businesses that don’t keep good records.

The way this tack works by the New Jersey division of taxation is they subpoena the records from the major food suppliers and liquor distributors. The tax authorities then compared the expenses listed on the tax return to what these third-party sellers reported. Read more

Australian Tax Office Targets Online Merchants

TaxConnections Picture - Shipping Worldwide Boxes - square

The Australian Tax Office (ATO) has announced that it will gather information from eBay Australia & New Zealand Pty Ltd about online sales transactions totaling $10,000 or more during the 2011-2012 and 2012-2013 tax years.

This data will be compared with the tax returns lodged by online traders as part of a new “online selling data matching program”. ATO Commissioner Chris Jordan says: “Our online selling data matching program helps us keep a level playing field for honest businesses. ”

Taxpayers whose returns do not reflect the income from their online trading may face penalty tax and interest charges. The harvesting of data is likely to be extended to other online auction and sales sites for 2013-2014 and later years. Read more

Australian Tax Office Issues Cash And Hidden Economy Audit Guide

TaxConnections Picture - Guidebook

The Austrailian Tax Office (ATO) today issued a new guide for advisers and their clients regarding the way in which the ATO conducts audits in the cash and hidden economy area. The guide discusses “…risk indicators to identify businesses for review or audit” that “…include results from data matching, comparisons of business information against our small business benchmarks and reports from the community”. In this connection, the ATO has an on-line evasion reporting facility that is in the Australian vernacular, known as the “dob-in line”.

In the guide the ATO reveals that much of the data they rely upon is received from third parties such as on-line auction houses. Much of this data is likely to have been gathered by bot programs that use appropriate search terms. Accordingly, it is likely they will have data Read more