Wanted Irs Audit-2007 advice
Q.Anonymous question, probably needing an anonymous answer. I am thinking of starting a small business on the side. I will provide services to people who will pay me in checks and money orders (no credit cards). I will take these checks and money orders to my bank where I have an account, and I will cash them, not deposit them. The cash thus received will remain as cash, and will not be deposited anywhere ever. I've heard about some fresh changes in 2007 Audit from Irs Question: will my bank provide the IRS with detailed enough records in the case of an audit that the IRS will discover that I have been cashing many small checks and money orders, and how much has been cashed? I don't trust my bank to give me a straight answer about this.
A.Something you might think about is that if you are ever investigated by the IRS for any reason, you will have to reconcile your lifestyle and assets with your income. It can get quite deep and dangerous. The first reply is that "they can't prove where I got it". The burden is on you to prove your innocence. That burden of proof was relaxed a little with TRA98 but only in court situations. When the auditor comes calling you will have some tough questions. Your case would be worked as a net worth prosecution, not a bank deposits method. Bottom line is you will be prosecuted for evasion if you get caught. http://pw2.netcom.com/~jrosgood/law.html
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