How does the IRS find unreported cash transactions

Many people mistakenly believe that the use of cash is untraceable by the IRS. This simply isn’t true. If you do use cash, it is important for you to understand how the IRS is able to track it. For more information about IRS audits, please visit: http://thetaxlawyer.com/irs-audit

People that don't deal a lot in cash, they generally pull money out of their ATM and they use it for miscellaneous items. That doesn't amount to much. The problem you're running into is when people hoard cash or they're paying a lot of their expenses or business expenses in cash, such as their workers in cash. That creates a real problem because they're avoiding payroll taxes by doing it that way. Everybody that deals in cash thinks that they're the only ones that ever deal with cash. They think that since they're dealing with cash, the IRS will never catch them. That's actually not true. The IRS will be able to do an analysis of the sources and uses of cash analysis to determine how much did they bring in in cash, how much did they pay out in cash and if there's excess cash left over at the end of the year, based on their analysis, they have under reported income.

Видео How does the IRS find unreported cash transactions канала The Tax Lawyer - William D Hartsock Tax Attorney Inc.