Posted by BRoss on March 01, 2000 at 19:33:35:
Well there are a couple sides to the coin here. hmm accidental pun
is it possible to prove income that was not reported? Sometimes yes, Many timers have coin counters in them, some are resetable some are non resetable. This can be used to substantiate income sometimes; for example one client had replaced all timers 14 months prior, by totaling up the coin counts we had a good idea of the volume in the bays. Not flawless but sometimes it will work.
Should you declare all income? according to the IRS, yes of course, to each his own though. BUT, if you are planning on selling within 2-3 years then absolutely YES. A typical wash with land will sell for around 4x gross income. If you report another $10,000 gross this may cause say $3,000 in taxes but will increase the value of the wash by around $40,000. Even though the buyer may want to believe your figures he will not pay full price for anything that cannot be substantiated. Would you? compare it to an apartment building claiming 3% vacancy…can they prove it? If not, you use your own figure of 10% or whatever to calculate with. Same thing.