if an owner of a buisness sells goods and then pockets the money without paying taxes on the money recieved and not reporting it on their personal income taxes, and as an owner can they pay themselves individually from the company and then not report that money on their personal income taxes would that individual be breaking the law and if so how does one annonymously report that and if not illegal why not?
2006-10-05 04:35:50 · 6 answers · asked by Charlie W 1 in Business & Finance ➔ Taxes ➔ United States
This is definitely breaking the law. The laws regarding income are quite clear - ANY and all income must be reported, assuming you make enough to file a return. If you are a sole proprietor, or someone who owns their own business and participates in that business, the income from the business is YOUR income - all of it. There are expenses that can go against that income, so you're not necessarily tax on all the money, but it is considered taxable by the IRS.
As an owner, yes, you can pay yourself out of these funds. It's all your money anyway - you are not obligated by the IRS to keep these funds seperate (though it is a good idea). If it is a partnership or corporation, the rules are different, but you can still be paid out of the business income. However, somewhere along the line taxes must be paid on this income, either through the business (as a corporation) or as an individual (some corps and partnerships).
You can report this anonymously by filing a form with the IRS. You can remain anonymous, but sometimes it is helpful if the IRS can know who you are. THEY WILL keep your name confidential, even if you give it to them. I have included several links below, including the link to the form to report fraud. If you find you need more information, please let me know. People who intentionally and illegally defraud the IRS defraud all of us since we wind up paying more.
2006-10-05 06:11:23 · answer #1 · answered by Katie Short, Atheati Princess 6 · 2⤊ 0⤋
Your run-on sentence is confusing, but I think I may be understanding some of it. It is illegal to sell goods and not collect taxes in most instances. Each state in the US has its own laws and it could depend on if it is on the internet or if it is shipped to another state. I am fairly sure that the owner has to report income and pay income taxes on it.
If I were you, I would call the IRS and ask how to report this.
2006-10-05 04:44:49 · answer #2 · answered by jboatright57 5 · 0⤊ 0⤋
That business owner as you describe the situation is clearly illegal on all counts. If you wish to report the owner, call the IRS. They usually take such calls seriously and will investigate. Good luck.
Chow!!
2006-10-05 04:58:53 · answer #3 · answered by No one 7 · 1⤊ 0⤋
The other answers concern income taxes for the owner. Your first question was about collecting taxes from customers. States have different sales tax collection rules so check state sales tax websites. There are no Federal sales taxes.
2006-10-05 07:36:49 · answer #4 · answered by spicertax 5 · 1⤊ 1⤋
pricey PJ: look at CA dept of gross revenues and the revenues tax branch. look at revenues tax on amenities. usually amenities for out of state shoppers escapes revenues tax. seek for the state revenues tax cost and any interior of sight municipal revenues tax. if you're required to collect a revenues tax you'll prefer to sign up with the state and deliver in quarterly receipts. this suggestion became prepared in accordance to our understanding of the tax regulation in result on the time it became written because it applies to the information that you provided. click on my profile to study better. Errol Quinn Enrolled Agent
2016-11-26 04:01:20 · answer #5 · answered by zito 4 · 0⤊ 0⤋
Yes, it is illegal.
2006-10-05 04:43:34 · answer #6 · answered by super.sweep 3 · 0⤊ 0⤋