Cash is the Working Mans Tax Loophole

In the movie Gran Torino, Walt Kowalski goes to a priest for confession of his sins to fulfill his wife’s final wishes. One burden the character, played by Clint Eastwood, releases from his conscience is the making of a few dollars on a boat he bought and sold for cash. Walt had failed to pay taxes on this income knowing it could not be traced by the IRS.Golf Course Lineup DSC_0522

How common is the practice by weekend wrench turning types of stiffing the IRS of a few bucks? According to the website NOLO.com the underground economy costs the US $500 billion in tax revenue per year. One eBay seller actually posted a statement that he would only accept forms of payment that would not be reported because “I am not gonna pay $3000 to the government to sell my car.” He made this statement even though he owns a wrecking yard that buys and sells car for profit everyday.

The next time you are at a car show dreaming of owning that Street Rod with the Fifty Thousand Dollar price in the window, just remember the price might be Thirty Five Thousand if you offer to pay cash, no receipt required. Maybe you don’t want to carry the burden on your conscience, like Walt Kowalski.

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