Adventures with lyrical - buying a business

Shonuff

Shonuff

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Cathan said:
Not sure I"d state that over the internet here...

Say some tard on the board doesn"t like you and has the ability to figure out personal information about you. If they read this thread I bet they could dig up a name.

Then they send your info in to the IRS dropping a dime. I don"t know how often the IRS audits people but years ago my mom, sister and I lived with my sister"s dad (all 4 of us). Sister"s dad ran his own construction business and mom knew he was fucking over the IRS. When they split she took his records and sent that shit to the IRS. He got audited and the IRS put it to his ass.

Do what you do but if I were you I"d edit that info out of my posts. Some of the people on this board are unstable at best and others are just looking to fuck with people.
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Assuming you are directing this post at me, I don"t care about unstable personalities. We have a valid argument for every expense, and I never said I took cash out, I"ve said I"ve had owners claim to me that they take out in excess of one million in cash tax free on an annual basis. I wasn"t the one doing it.

Really the only thing I care about unstable personality wise is the guy that could track down my contracts and tell them I was breaking an NDA, but I"ve sanitized any NDA breaking stuff at the suggestion of Tuco.
 
Eomer

Eomer

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It"s not tax evasion if he can justify the deductions. And quite honestly, unless you"re doing something incredibly egregious it"s often not worth the IRS or CRA or whoever"s time to spend dozens of hours trying to nail you to the wall for a few thousand dollars.

They"re looking for people or companies who are making a shit ton of money and paying little or no tax. My company and family members haven"t been audited in 15+ years because we pay a shitload of tax relative to our revenues both corporately and personally, so we don"t raise any flags.

There"s a number of things they could call us on like personal use of company vehicles or paying for personal vehicle expenses with company money, not reporting Visa rewards points as a taxable benefit, going for lunch on company dime, storing personal vehicles and toys in a private part of our warehouse and numerous other things. But all of those things combined might add up to 10-20k in tax savings a year vs. our tax bills being in the hundreds of thousands or millions depending on the year.

It"s not worth their time to try to ferret out that kind of minor shit.
 
OneofOne

OneofOne

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Worth their time? Probably not. Believe you me, they do go after stupidly small fish though. We had to go as far as filing with the tax court for them to back off trying to (wrongly) fuck with a tiny business owner (about 75k gross?) over about $8k.
 
Cutlery

Cutlery

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Eomer said:
It"s not worth their time to try to ferret out that kind of minor shit.
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You do know that 1) you"re in Canada, and this is America, so there"s a difference in tax organizations, and 2) people at the IRS don"t make so much money that 10-20k is "not worth their time?" right?

Revenue agents start in the realm of 35k a year if they"ve got some education and a 20k score would most definitely be worth their effort. Small businesses are definitely on the radar because that"s exactly where people try to write off everything they can. And if they find 20k this year, they"re going back as far as they are legally allowed to and auditing all of those years, and assessing penalties for those too. Just because you"ve gotten away with it before doesn"t mean you get a free pass for the future, nor does it mean someone can"t go back and crack down on you for it.
 
G

Grooverider_foh

shitlord
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Must be very different to here in England. If you fuck around and try to actively hide money (hide money in walls, make fake invoices for wedding dresses and claim they are uniforms) here you go to big boy jail, do not pass go, do not collect 200 dollars.

Shit like buying a home cinema and claiming it on the business would not just cause a huge fine, but would mean a massive investigation into the last 5 years of your tax filings.
 
S

Silence_sl

shitlord
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OneofOne said:
Worth their time? Probably not. Believe you me, they do go after stupidly small fish though. We had to go as far as filing with the tax court for them to back off trying to (wrongly) fuck with a tiny business owner (about 75k gross?) over about $8k.
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Remember, folks, it"s always ok until you get caught.
 
Borzak

Borzak

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Cathan said:
Another topic from: The Millionaire Next Door I have a question about to those that are already financially independent here...

What did you do for your kids" education? Did you send them to expensive private schools or to public school? The book praises education but it also said most of the rich people send their kids to public schools.

Personally, I went to public school and I wish to god I"d had the advantage of going to a private school where the classes are smaller and I could learn at my own pace in an environment more conducive to learning, and that was back in NC...

Here in New Orleans private schools are where kids with money go to school and public schools are mostly for the poor kids. Catholic private schools are a big portion of the high schools here and my fiance plans to send her daughter to a coed private school that"s about $9000/year. I"m all for it even if it does mean a big drain on our funds. In another city where public schools were good I could possibly argue for sending her to public schools but here in New Orleans? Fuck that...

So what did the rest of you do for educating your kids?
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South Louisiana is going to be different than most places because of the abundance of private catholic schools that are basically integrated into the public school system, ride the public school bus system, play public schools in sports etc...

I grew up in Louisiana and my sister went to catholic school even tho were weren"t catholic becuase it was the best school available. My parents moved and I attended a good public school but it was federally desegrated (it wasn"t segrated but that"s another topic) and overnight I couldn"t get into private school because of the instant 4 year wait and requirement to be catholic for the first time.

So instead of making an hour long bus ride twice a day to a crappy school my parents got involved with a bunch of other parents and built a school on donated land with donated material and staffed it with volunteers, part time parents who taught in their speciality, and retired teachers. My parents were not "rich" by any stretch and were solidly middle class like most of the other parents.
 
Shonuff

Shonuff

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Grooverider said:
Bragging about tax evasion on the internet = very very stupid.
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At no point did I say I evaded taxes. The Mercedes might be borderline, but what could the IRS do even for our a/v setup? The local place we bought our a/v stuff has corporations and small businesses that do this all the time, buy higher end stuff, and expense it 100%. And so I"m not exaggerating and am clear on it, the system had an MSRP of 20k, we bought for 10k, and expensed 25% of it for business use (meetings).

If the IRS wants to come after me for legal deductions (cars, cell phones, office expense, meals and entertainment), let them. The reality is there audit rate is so low, penalties so low, and there are much bigger fish to fry.
 
Shonuff

Shonuff

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Grooverider said:
Must be very different to here in England. If you fuck around and try to actively hide money (hide money in walls, make fake invoices for wedding dresses and claim they are uniforms) here you go to big boy jail, do not pass go, do not collect 200 dollars.

Shit like buying a home cinema and claiming it on the business would not just cause a huge fine, but would mean a massive investigation into the last 5 years of your tax filings.
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Its pretty commonplace in the U.S. As a matter of fact, I don"t know of one business owner with totally clean books, everyone I know hides it, and hell, will tell you how the hide it over a few drinks. The IRS has the rep of not even looking at people"s books for people that have been in business for 30-40 years, and like I said, the guy who owned the business before me hid millions over 50 years and never had an audit the whole time. I"m not going to try to hide 200-300k a year, I will take every deduction I can though.

There"s a yin-yang to it. I"m young and may want other loans, and the first thing the banks do is look at claimed income. The guys that show a loss five years in a row but have the walls of their homes lined with cash would have a hard time getting a loan if another big opportunity came their way. And then there"s the whole issue of resale value, a bar owner I know (through a friend who is a busines broker and didn"t state the company name) said that the guy wanted 3.5 million for a bar that didn"t show a profit. Meanwhile, he was taking out one million a year from the registers of his club.

If there"s a legal deduction or grey area, I"ll be in it, but I"ll never get as bad as some of these guys I know, I like to sleep at night. I"m not going to be that guy that pulls out huge amounts of cash because at some point you can"t hide it (how you hide a million bucks I don"t know), or have vendors falsify invoices like a wing on my house (as parts and labor) or wedding dresses as uniforms. I"ve never asked a vendor to falsify an invoice, and I never will.
 
Shonuff

Shonuff

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OneofOne said:
Worth their time? Probably not. Believe you me, they do go after stupidly small fish though. We had to go as far as filing with the tax court for them to back off trying to (wrongly) fuck with a tiny business owner (about 75k gross?) over about $8k.
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How do they justify their labor on that? And then they ignore the businesses that have two-three million in revenue, from my experience those are the biggest cheaters (even on a % of sales its way higher). I don"t know anyone at this level thats been audited.

To be honest, alot of these small businesses get clipped because they either don"t file a tax return, or they take cash from a customer, put it in the bank and don"t report it on their taxes (duh). I"ve only seen two business owners get clipped, and its for those reasons.

The only thing that would raise a red flag is my high amount of charitable contributions, we give 20-30k away per year either through the corporation and personal combined (the amount changes depending on who would get the highest tax benefit). So we"ve started getting giving statements from the non-profits to show that these are legit donations, and filing them with our tax returns.
 
OneofOne

OneofOne

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Depending on the donation type, we just have clients deduct it as an advertising cost, which gets a much better % deduction.
 
R

Radmonovich_foh

shitlord
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The IRS wont give 2 shits about the Mercedes
. If you have your taxes done by a competent certified person your chance of an audit goes down drastically, and it was probably done correctly any way. Preparers don"t want to get caught for fraud/stupidity because then the IRS looks at all returns they prepared. Hello audited and unhappy clients.

The IRS assigns a "dif" score to every return based on industrythe percentages, which determines your audit chance. 20k charity wont get questioned unless you throw more than some irs deemed rate as a percent of gross income.

Easiest way to get fucked is if you don"t claim all income reported by 1099, or miss somethinfh computers can match. Then their computer sends an automatic letter out and the can of worms has been ope ed. Depending on how busy the local IRS office is and how much of a d-bag (money hid) they assume win your original filing they hedge their bet/look at risk reward.

Currently they are focusing on international accounts. Don"t lie to you accountant when they ask you if you have foreign bank accounts because the penalties are huge is you"ve hid money over seas.
 
R

Radmonovich_foh

shitlord
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0
I agree with you lyrical on everything but the penalties. Usually its percentage based and years later which make the penalties large.because itsthe penalties plus interest. The bigger the business the higher the penalty
 
Shonuff

Shonuff

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Radmonovich said:
The IRS wont give 2 shits about the Mercedes
. If you have your taxes done by a competent certified person your chance of an audit goes down drastically, and it was probably done correctly any way. Preparers don"t want to get caught for fraud/stupidity because then the IRS looks at all returns they prepared. Hello audited and unhappy clients.

The IRS assigns a "dif" score to every return based on industrythe percentages, which determines your audit chance. 20k charity wont get questioned unless you throw more than some irs deemed rate as a percent of gross income.

Easiest way to get fucked is if you don"t claim all income reported by 1099, or miss somethinfh computers can match. Then their computer sends an automatic letter out and the can of worms has been ope ed. Depending on how busy the local IRS office is and how much of a d-bag (money hid) they assume win your original filing they hedge their bet/look at risk reward.

Currently they are focusing on international accounts. Don"t lie to you accountant when they ask you if you have foreign bank accounts because the penalties are huge is you"ve hid money over seas.
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I"m pretty sure I give away an abnormally high amount of charitable deductions in my industry, but the owner before me believed that "paying it forward" always brought him more business later. He always gave away a ton.
 
Cutlery

Cutlery

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What kind of charities does a guy like you give to? What level are we talking here? Gates Foundation? Food shelf? Courage Center?


Serious question.
 
Eomer

Eomer

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I personally donate a fair amount to Oxfam every year, and often also to CAMTA (https://camta.com/) which is run by the parents of a good friend of mine. Corporately we"ll donate a fair amount of money to clients/customers when they ask us to contribute to various MS/Cancer runs/rides etc., and I do it personally a fair amount as well. If someone asks me and I know them well enough, generally I"ll donate $20-50, and I"m asked at least a dozen times a year. 12 friends of mine got together over Christmas, raised a couple thousand dollars for the Mustard Seed and then cooked/served a dinner in the inner city. Also did a few thousand bucks to United Way because it"s non-faith based for the most part and does good work. When my dad was around he liked to donate a few thousand to Hope Mission every year, which is Christian based but also does good local work in the community.

We just tendered a 52 suite affordable housing project being built by the Hope Mission and the construction manager said they knew who we were, likely cause of the donations, so that"s a good side benefit as well.

My bro and I have discussed setting a target of either sales or before tax profits for donations, but haven"t gotten around to it. Corporately we do 5-10k a year generally, and personally I"ve been doing 2-3k a year. We try to spread it around on multiple causes instead of just picking one or two.

I"m kind of surprised that in the US you don"t need an official tax receipt from the charity. In Canada you"re required to get one.
 
Cutlery

Cutlery

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Eomer said:
I"m kind of surprised that in the US you don"t need an official tax receipt from the charity. In Canada you"re required to get one.
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As far as I know, you do.

And I don"t wanna get into a big derail about this or anything, but I"ll tell ya what turned me off about the United Way. They come in every year to work and solicit donations and we all gotta go to the meetings even if we"ve got no interest in donating to them. And usually they"ve got someone from the organization in there telling you about this kid with cancer or some sob story like that. That"s fine, I get that. Except about 3 or 4 years ago now, this lady comes in, tells this story about a dude who had everything in life going for him, had a good job, had a wife and a kid, all sorts of toys, and was out snowmobiling one day and was going a little too fast and ran into a tree and got paralyzed and lost it all. Doesn"t have a job, wife left him, house got foreclosed on, etc.

Uhh, so, you want me to contribute some coin to a guy who was being a fucking jackass? Can we get some stories about kids with no legs or something? This isn"t helping your cause.
 
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