Is this an indicator of Tax Evasion?

If a business:


1.) Operates to provide one type of service but has eight different incorps and llc's to the same place of business...


2.) Has four postal addresses for one location....


3.) Spouse on payroll making excess 10K a month but knows NADA about business...


4.) Has millions of dollars in equiptment but lists them as assets for one of said holding companies listed above...


5.) Sells Inventory for cash


6.) Spouse has cleaning business making excess 75K a year with employees on OTHER spouses payroll and cleaning business has no EIN or history of tax payments..EVER.


7.) Claims boats and luxury travel as business expenditures (personal in nature)


Well I guess of course it's not legit but could someone explain the reasoning behind the moving of assets to useless corps, spouse on payroll and so on? I am interested in knowing what benefit they are getting out of doing this. Why all the different addresses? Thanks Guys (and Gals)|||Together, they may indicate problems. But for you, I would be concerned that taxes withheld from your paycheck are actually being sent to the state and feds. Although you can't be held responsible, it would still be a concern that the correct amount is being withheld and paid.





1. Just complicates their tax structure


2. Not a problem. Could be necessary to track postal costs for each business.


3. We have a president, secretary of state, and some former presidents that fit that description.


4. Equipment is a depreciable asset.


5. Waffle House did that for 50 years. But it takes accurate tacking so that cash from sales isn't skimmed.


6. Big problem not with employees, but with no EIN number. Businesses who hire the cleaning contractor deducts their expenxes.


7. AIG did that recently in Phoenix. They will have to show that the trips were business related. Use of a boat is deductible for the same reason - business related and provable.|||They all sound very suspicious. If this is your current employer you should think if you have some legal exposure to this situation. Have you been a participant in any of these activities? You might be called to testify against them.





Also think what you do for income if they were forced to shut down as a result of a civil or criminal tax situation. You might start looking for another job.|||Individually they are not an indicator, but put together they are suspicious certainly.|||It certainly LOOKS odd, but it would take a detailed forensic audit to determine if anything illegal was going on.|||Your have provided enough indicators of fraud and indicators of large underpayments to make an IRS special agent drool.|||A lot of this sounds suspicious (especially the spouse's "cleaning business"), but it can be hard to prove this kind of allegation. Of course, once the IRS starts investigating, they're likely to dig up something.





The IRS does pay out rewards to people who turn in tax evaders -- it ends up being about 2% to 5% of the total amount collected each year, but that could mean lots of rewards for a few people and nothing for everyone else.





To be honest, it may not be in your financial benefit to turn your boss in -- you might lose your income, and it might lead to a bad reference -- but the moral decision is up to you.