"bobby" <bawbby69[at]hotmail.com> wrote:

- quote -

You should expect exactly the same treatment as any other
tax cheat. Maybe worse as it would be hard to argue that
you didn't know exactly what you were doing and that it was
wrong. You can't very well use the poor and downtrodden
excuse either.

I wouldn't use any excuse at all. You sound like exactly
the kind of tax cheat the IRS loves to get their fangs into
and to make an example of. I'd recommend very nicely giving
them everything they ask for and being as humble and
contrite as possible while you do it.

Now you may be a nice guy and just a poor record keeper and
not so hot at keeping track of things for tax compliance.
And may have pretty much figured it was no big deal and
everybody does it. That may even be somewhat true. They
won't be impressed.

Jo

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"bobby" <bawbby69[at]hotmail.com> wrote:

- quote -

No. But they do have evidence that what you claimed to have
as income ($0.) and what you did have (some number of X
dollars on one invoice) are different. It is not at all
unusual for the IRS or a state to ask a business person to
verify the income or expenses they declare.

- quote -

Please stop right here. This argument is bothersome. There
is nothing wrong with making some money. There is nothing
wrong with being good at your job. But we all have a
responsibility to take care of our tax, bookkeeping, and
payroll obligations. Most of my clients are very good at
whatever their business is. Most are not good
recordkeepers. But that does not absolve them of the
responsibility to keep records.

Yes, there are others who did not keep good records. But
here's the scenerio. The state wants to calculate how much
taxes you owe. This is based on your income. They ask you,
"How much did you earn?" You say, "I dunno." They will now
try to estimate how much you made. You can help this
process by having as many records as possible (at least some
invoices, records of bank deposits, a calendar that says
"Tuesday 15th -- paint Mr. Smith's walls", even just a list
you make [supposedly at a time when you remember the
details] of your income). The auditor will need to come up
with something. The results are probably more favorable the
more information you can provide.

I want to get things straighened out and do
- quote -

You actually have more to lose by *not* "coming clean".

- quote -

Some of what you said above says you think this is a "you
vs. the evil government" situation. In reality, the auditor
just has a job to do. He/she is simply trying to determine
how much you made, to determine how much tax you owe. I
have never seen a situation where the auditor is out to get
a taxpayer, or even where they have considered you an
"outlaw" before we got started. (Of course, I don't
represent outlaws.) They are just looking for facts. The
more you can assist them in doing their job, the better the
result will be.

Penalties? Yes. Might your representative get some of them
mitigated? Sure. Will they take everything you own? No.
If you can't pay, will they make arrangements? Likely,
especially if you work with them and not against them.

Good luck!

Bryan

--
-------- Bryan Kellar, EA
Oregon Tax Help, Inc. Portland, Oregon
www.oregontaxhelp.com
www.canadatax.org

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"bobby" <bawbby69[at]hotmail.com> wrote:

- quote -

You will owe income tax, self employment tax, late filing
penalty, non-filing penalty, and interest for your income
that you didn't report.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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bobby wrote:

- quote -

If you reported and paid tax on the 20k$ per year you
mentioned above, you have no worries whatsoever.

Cheer$,
Harlan Lunsford, EA n LA

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bawbby69[at]hotmail.com (bobby) writes:

- quote -

And how would that be wrong? I've often said that the worst
thing about working under the table is that you can get a
terrible bump on the head when you come up for air.

Your representative may be able to get some of the penalty
waived, but let's hope you're not prominent in the community
or involved in a business which has been a special problem,
in which case I'd advise you to hire an attorney.

Phil Marti
Topeka, KS

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I retired from my career job in June 2001. Two months prior
to that I took out a business license in Washington State
figuring I would "work the other side of the fence" as a
consultant. For various reasons, including conflict of
interest rules, that never happened. Instead I started doing
small construction jobs for friends and friends while I
looked for a second career. Each year I would send a "No
business activity report" to the state because I wasn't
doing any consulting. I was making about $20K a year after
expensesdoing side jobs.

One of my friends got audited by the state and one of my
invoices to him showed up. The state wants all my persoanal
records back to 2001. I hava a great CPA friend and he says
we will "come clean", pay what is owed, and you can get on
with your life.

My question is this: Does the state and the IRS think of me
as an outlaw tax dodging S.O.B who should be hit with every
penalty allowed? Surely there are others who have found that
they can make some bucks doing what they are good at but
they didn't keep records and pay the required taxes like a
good citizen. I want to get things straighened out and do
things right in the future but I don't want to lose
everything I have by "coming clean." Can anyone tell me what
treatment I should expect from the government?

Thanks
Bob

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