|
Superide
PROcrastinator


Registered: 01/19/11
Posts: 293
Loc: MASS
Last seen: 9 years, 11 months
|
What happens to a business that doesn't pay taxes
#14028564 - 02/26/11 12:42 AM (12 years, 11 months ago) |
|
|
I've searched around online to try and understand the rules and penalties but I'm still not sure so I wonder if my fellow Shroomerites can be of some help. Consider the following scenario and tell me what you think.
A local pizza shop employs around a dozen people. Out of those people only two receive actual paychecks and pay taxes. The rest of the employees are paid strictly "under the table". They write down their hours and take cash at the end of each shift. Upon employment they don't fill out 1099s or W-4s and they don't receive W-2s at the beginning of the year. So everything is very much illegal with no income taxes paid at all by these employees. This pizza place has been open for several years and has always been run this way.
If this business gets audited...
What are the legal ramifications for the business and the owner/s for running a business under the table?
What would happen to the employees?
Any info is greatly appreciated, thanks in advance
|
Groovy Grant

Registered: 07/31/00
Posts: 6,635
Loc: TX
Last seen: 16 days, 19 hours
|
Re: What happens to a business that doesn't pay taxes [Re: Superide]
#14029036 - 02/26/11 06:01 AM (12 years, 11 months ago) |
|
|
The business would be subject to back taxes, and not just federal/state incomes taxes, but also unemployment insurance, medicaid, social security, etc. Additionally, they've penalties and interest to pay.
The employees would have a hard time proving they weren't aware they needed to pay taxes. They'd be audited too, to see if they reported the income to them. They'd also be suspect considering they went along for so long without notifying anyone.
Although, with restaurants, this kind of stuff is super common. I guess they don't realize the roads their customers drive on to get there (or the delivery guy uses) need to be paid for. Or the electric grid that supplies power to the restaurant needs to be kept up. Anyways, if I were you, I'd get a new job and get away from that place. The longer they keep doing this the more likely it's going to be a huge cluster fuck of tax invasion. The IRS is cracking down on tax cheats and will continue to do so, considering the fiscal position we're in.
Even more so, states are really cracking down. Where I am (Houston) they've started going after mom and pop places that don't have the proper licenses, since the city is broke.
|
TheMacDaddyLongLeg
Stranger

Registered: 06/26/10
Posts: 81
Last seen: 12 years, 3 months
|
Re: What happens to a business that doesn't pay taxes [Re: Groovy Grant]
#14049945 - 03/01/11 05:36 PM (12 years, 10 months ago) |
|
|
When you owe the IRS they can take everything you have.
|
Superide
PROcrastinator


Registered: 01/19/11
Posts: 293
Loc: MASS
Last seen: 9 years, 11 months
|
|
Quote:
The business would be subject to back taxes, and not just federal/state incomes taxes, but also unemployment insurance, medicaid, social security, etc. Additionally, they've penalties and interest to pay.
That is pretty much what I was expecting to find out. The story behind it is that I used to work for this pizza place and I was fired for one incredibly bullshit reason. This was many months ago and I've wanted to get my revenge ever since. So I waited and waited and the other day I finally sent anonymous letters to the state department of revenue and my town hall addressed to the tax collector. I'm hoping that those letters will make their way to the right people and the place gets audited.
The pizza place usually spends around $600 a week on payroll, it's been open for 7 years and it's always been run under the table. I'm hoping that if they get audited all the back taxes, interest and penalties will add up to one astronomical number. Not only was I fired for a bullshit reason but the owner also treated me like a criminal and threatened to call the cops when I said I was going to call the IRS.
|
zappaisgod
horrid asshole


Registered: 02/11/04
Posts: 81,741
Loc: Fractallife's gym
Last seen: 7 years, 7 months
|
Re: What happens to a business that doesn't pay taxes [Re: Superide]
#14054067 - 03/02/11 11:23 AM (12 years, 10 months ago) |
|
|
There is also the potential for prison. The owner is a tax cheat, as are the employees who do not report their income. What you describe is not a mistake but a criminal tax evasion scheme. By several parties.
--------------------
|
Groovy Grant

Registered: 07/31/00
Posts: 6,635
Loc: TX
Last seen: 16 days, 19 hours
|
Re: What happens to a business that doesn't pay taxes [Re: zappaisgod]
#14070540 - 03/05/11 11:41 AM (12 years, 10 months ago) |
|
|
Quote:
zappaisgod said: There is also the potential for prison. The owner is a tax cheat, as are the employees who do not report their income. What you describe is not a mistake but a criminal tax evasion scheme. By several parties.
X2 - we all have to pay our part. Taxes are a part of life, and those who don't pay theirs are literally stealing from every other citizen who does.
|
57-71
Stranger


Registered: 10/03/09
Posts: 289
Loc: Canada
Last seen: 10 years, 1 month
|
Re: What happens to a business that doesn't pay taxes [Re: Groovy Grant]
#14073001 - 03/05/11 09:30 PM (12 years, 10 months ago) |
|
|
I remember reading a story several years ago out of the southern US about a company that paid the staff in gold coins and declared the face value, legal tender amount for income and tax purposes. In other words, using gold prices at that time a person would get $500.00 in $100.00 gold coins which were 1oz of gold and worth $800.00 each.
The IRS was going after them, but I never did hear what happened with the interpretation.
|
humawebdesign
Stranger

Registered: 03/11/11
Posts: 45
Loc: India
Last seen: 12 years, 10 months
|
Re: What happens to a business that doesn't pay taxes [Re: 57-71]
#14112793 - 03/13/11 01:39 AM (12 years, 10 months ago) |
|
|
government will fine heavily and in future he will always remember his due date to pay taxes.
|
|