what happens if you have zero receipt for your expenses?

[libtard]

Hi guys

imagine the following scenario:
every year your tax returns indicate 90% of the money that you received was spent in expenses (example: $100k came into account, your profit is $10k)
and you get audited
you have no receipts for any of the expenses
no money left your bank account
there is zero evidence that you had any of those expenses

my accountant told me you just say "I dont have receipts" and irs will charge you whatever you would have owed plus penalty plus interest
it would not turn into a criminal matter
he also told me they can audit the past 3 years only. anything before that you are off the hook.

1) is it true that it would not be a criminal matter?
2) is it true that they would charge you for 3 years only? I am reading on some forums they can go back to 6 (or 10?) if fraud is involved. how do you know if fraud was involved?
3) how much would be the penalty in such a case? 25% or 75%?

 

[Sols]

1) is it true that it would not be a criminal matter?

Not right away. But it can become a criminal matter later, for example if you've also engaged in fraud, wire fraud, money laundering, and other more serious crimes.

2) is it true that they would charge you for 3 years only? I am reading on some forums they can go back to 6 (or 10?) if fraud is involved. how do you know if fraud was involved?

They can go back more than three years in some cases, such as fraud.

It's up to IRS to determine if it's fraud or negligence. If you disagree with their determination, I believe there is an appeal process. If there isn't, you can try taking them to court.

3) how much would be the penalty in such a case? 25% or 75%?

Depends on what type of penalty you're getting. If it's for negligence, it's usually 20%. If it's for fraud, it goes much higher.

 

[cuno]

In most EU countries, you can go back 5-10 years, and if you don't have any receipts for your expenses, there is nothing you can deduct, meaning you will be fully taxed on ALL your income.

Furthermore, if you lack receipts for your income, you risk being criminalized in 2024/2025, as it is no longer legal to receive money without proper documentation.

You will immediately be labeled as a tax evader and a terrorist, thanks to the EU, OECD, and the USA's wet dreams of turning us all into clowns and slaves to our societies.

 

[daniels27]

Furthermore, if you lack receipts for your income, you risk being criminalized in 2024/2025, as it is no longer legal to receive money without proper documentation.

You will immediately be labeled as a tax evader and a terrorist, thanks to the EU, OECD, and the USA's wet dreams of turning us all into clowns and slaves to our societies.

Yes, but luckily it is about expenses.

 

[daniels27]

It really depends on the real situation. If you operate a laundry service and you just go to the coin laundry next door and wash it there, there will be some discussions but overall, the business nature and the amount of expenses can easily be justified. It also is obvious that you won't have any invoice as the coin laundry machines do not issue invoices.

Operating a deposit can collection point would be another one. People bring their cans and you give them 5 cents per can. Of course, they old grandma does not have receipts. Those places are all over the US and they are all not sent to jail.

There are also a ton of deals where you sell something but somebody gets a commission and that money never reaches you. While not perfect, normally, there is no need for a separate invoice for the deductions. Same for quick payment discounts of like 2%, nobody issues invoices for that, they are just deducted.

There are other business natures like this, where the expenses are legit and there are explanations why you do not have receipts.

On the other hand, we do not know what you exactly do. But if you do not have income which suggests what your expenses are (as above), you will most likely have a long time discussing.

Maybe, you can give us a bit more details about what illegal you have been plotting? Would be good to be in jail last month, you would be free in 14 days thanks to Biden

 

[Dandyline]

If you can’t provide receipts, the IRS will likely disallow the deductions and assess back taxes, penalties, and interest. This is typically treated as a civil issue unless they find evidence of intentional fraud, such as fabricated expenses or deliberate misreporting. Without proof of intent to defraud, it’s unlikely to turn into a criminal case.

The IRS generally audits up to 3 years, but this extends to 6 years if you underreported income by 25% or more. If fraud is suspected, there’s no time limit on how far back they can investigate.

Penalties depend on the findings: 20% for negligence or unsubstantiated claims and 75% for fraud, plus interest on the unpaid tax.

 

[ChadMuska]

Maybe, you can give us a bit more details about what illegal you have been plotting? Would be good to be in jail last month, you would be free in 14 days thanks to Biden

Man, I thought it was Jafo for a sec with his head banging emojis

 

[daniels27]

Man, I thought it was Jafo for a sec with his head banging emojis

I miss him. Hope we meet him again fleeing from governments in heaven.

 

[libtard]

It really depends on the real situation. If you operate a laundry service and you just go to the coin laundry next door and wash it there, there will be some discussions but overall, the business nature and the amount of expenses can easily be justified. It also is obvious that you won't have any invoice as the coin laundry machines do not issue invoices.

Operating a deposit can collection point would be another one. People bring their cans and you give them 5 cents per can. Of course, they old grandma does not have receipts. Those places are all over the US and they are all not sent to jail.

There are also a ton of deals where you sell something but somebody gets a commission and that money never reaches you. While not perfect, normally, there is no need for a separate invoice for the deductions. Same for quick payment discounts of like 2%, nobody issues invoices for that, they are just deducted.

There are other business natures like this, where the expenses are legit and there are explanations why you do not have receipts.

On the other hand, we do not know what you exactly do. But if you do not have income which suggests what your expenses are (as above), you will most likely have a long time discussing.

Maybe, you can give us a bit more details about what illegal you have been plotting? Would be good to be in jail last month, you would be free in 14 days thanks to Biden

right, except my name is not hunter.
in my situation, it doesn't make sense to have no receipts. in other words, a reasonable person in my situation would have at least some receipts. For example, when someone's office rent is $3000 a month, it's hard to believe that he paid it in cash and got no receipt. where is the rent check? how come no money left the account?
the way my accountant explained it to me is irs is not going to look at it that way. they are not going to say this doesn't make sense. you simply say I don't have receipts and they say ok, no problem. this is how much you owe.

If you can’t provide receipts, the IRS will likely disallow the deductions and assess back taxes, penalties, and interest. This is typically treated as a civil issue unless they find evidence of intentional fraud, such as fabricated expenses or deliberate misreporting. Without proof of intent to defraud, it’s unlikely to turn into a criminal case.

The IRS generally audits up to 3 years, but this extends to 6 years if you underreported income by 25% or more. If fraud is suspected, there’s no time limit on how far back they can investigate.

Penalties depend on the findings: 20% for negligence or unsubstantiated claims and 75% for fraud, plus interest on the unpaid tax.

does the combination of 1) no receipts and 2) no money left the account equal to fabricated expenses, or there needs to be something more?
extends to 6 years of underreported income by 25% or more. income means gross or net?

 

[daniels27]

in my situation, it doesn't make sense to have no receipts. in other words, a reasonable person in my situation would have at least some receipts. For example, when someone's office rent is $3000 a month, it's hard to believe that he paid it in cash and got no receipt. where is the rent check? how come no money left the account?

If it does not make sense, then you have not paid it. And then you need to pay taxes on the profit.

does the combination of 1) no receipts and 2) no money left the account equal to fabricated expenses, or there needs to be something more?
extends to 6 years of underreported income by 25% or more. income means gross or net?

What you mean by gross or net? If you have no expenses, gross=net.

 

[libtard]

If it does not make sense, then you have not paid it. And then you need to pay taxes on the profit.


What you mean by gross or net? If you have no expenses, gross=net.

my question is, if it doesn't make sense, will it turn into a crime? if 12 jury members would not believe it? my accountant said irs is not going to say this makes sense, that doesn't make sense. they simply say you don't have receipts, this is how much you owe. that will be the end of it.

I didn't say there are no expenses, I said 90% of gross is expenses. example: you received 100k, 90k was expenses, profit was 10k.

 

[daniels27]

I didn't say there are no expenses, I said 90% of gross is expenses. example: you received 100k, 90k was expenses, profit was 10k.

If you have no explanation for the alleged expenses, then there are no expenses. Very simple.

See, you cannot even explain your business nor your expenses to us. How should IRS believe you more than we believe you?

 

[daniels27]

my question is, if it doesn't make sense, will it turn into a crime? if 12 jury members would not believe it? my accountant said irs is not going to say this makes sense, that doesn't make sense. they simply say you don't have receipts, this is how much you owe. that will be the end of it.

What is criminal?

When an individual willfully attempts to evade or defeat a federal tax provided for in Title 26, they may be charged with the federal crime of tax evasion in violation of 26 U.S.C. § 7201. Tax evasion and fraud occurs when people or a business intentionally underpays or fail to pay their tax obligations.

As you know very well that you are illegally not paying taxes on the inexistent "expenses", I am pretty sure they will also investigate the very obvious fraud. You will then also face money laundering charges and most likely also some sort of failed book keeping.

And to answer your next question. How long you will be in jail depends on the whole story that is missing here. Maybe you can give us some more details what you pay for and how?

 

[libtard]

What is criminal?


As you know very well that you are illegally not paying taxes on the inexistent "expenses", I am pretty sure they will also investigate the very obvious fraud. You will then also face money laundering charges and most likely also some sort of failed book keeping.

And to answer your next question. How long you will be in jail depends on the whole story that is missing here. Maybe you can give us some more details what you pay for and how?

not sure what you mean by "details" there are no details. you are making this too complicated. it's a really simple story.
you have expenses in your tax returns which you have zero proof for, no receipts, money never left the bank account, zero evidence exists that you ever had these expenses,
and a reasonable person in your shoes would have proof, meaning it's hard to believe someone would have these expenses without proof,
irs asks for proof, you say I don't have any
are you going to be charged with a crime? or you simply lose the deductions, pay, and no further action will be taken against you?
an example of hard to believe: if someone tells me he had $3000 a month in office rent, but he had no proof, I would think he is just making it up. where is the receipt for the money order you bought from walmart and gave your landlord? or if you paid by check, how come no $3000 was debited from your account? if you paid in cash, how come you didn't get a receipt from your landlord? who pays $3000 and doesn't get a receipt?
my accountant (who I am not endorsing, he could be a complete idiot) told me they will just say "you don't have receipts? no problem. you owe this much" they won't allege fraud because fraud requires a state of mind which is hard to prove.

 

[daniels27]

It is not that simple. If you have a hotel receipt missing, they will just charge you taxes on it, like if you claim some child birthday party expenses. But it you do 100k sales and have no receipt for the goods sold worth 90k, do you really think, they just let it go?

They will if course start digging as it smells like criminal activities. You either stole the goods or they are not what you claim. Fake, illegal, etc. Maybe you bought them from North Korean?

Look, this is highly risky and I can only recommend you to be prepared for their questions. If I was auditing you, I will put you into custody right on the spot.

Now, what are you involved with? Stolen goods? Illegal goods? Illegal services? Money laundering?

 

[cuno]

Yes, but luckily it is about expenses.

Yes, okay, that’s correct, I see it now after reading it again. The only problem, then, is that he doesn’t have documentation for where the money went (this can be documented if it’s bank transfers). Additionally, none of the company’s expenses can be deducted from taxes, which could turn into an indirectly unpleasant bill to deal with.

 

[daniels27]

Yes, okay, that’s correct, I see it now after reading it again. The only problem, then, is that he doesn’t have documentation for where the money went (this can be documented if it’s bank transfers). Additionally, none of the company’s expenses can be deducted from taxes, which could turn into an indirectly unpleasant bill to deal with.

If you have 10% margin and no receipts, you end up paying 90% for supplier and 40% for tax, effectively losing 30 cents on the dollar sold. It basically is a hobby unless he would tell us why he had no receipts.

 

[Mary P]

Criminal matter: It's true that lack of receipts and poor documentation typically wouldn't result in a criminal charge unless there’s clear intent to defraud the IRS (e.g., knowingly falsifying information). In most cases, it would result in penalties and interest, not a criminal case.
Audit period: The IRS generally audits the past 3 years, but they can extend it to 6 years if they find substantial underreporting (more than 25% of income), and up to 10 years if fraud is suspected. Fraud could be suspected if there’s evidence of intentional misrepresentation or concealment.
Penalty: If the IRS determines you were negligent or careless, the penalty is usually 20%. If they find it was due to substantial understatement or fraud, penalties could increase to 75%. The exact penalty depends on the specifics of the case, such as how you reported the expenses.

 

[daniels27]

He intends to show up with 0 receipts for a 10% margin business. Why would they let him fly if it smells like money laundering, illegal labour etc.? We are not talking about 1 out of 1000 missing. It is all missing. You cannot just tell: "oh sorry, I may have misplaced it, dumped it at the diner" etc. He is going to look like a fool and they know he is hiding something felonious.

It is not just negligence. It is clear criminal intent to run a business like that on purpose. If he is as open as here, they will do all they can to dig deeper. And if they cannot find it, they will charge him for money laundering as he claims to have paid somebody but did not get the W-9 from them nor issue the 1099 form for their income.

It is 100% criminal what you are doing. The only hope is that they won't audit you.

You better tell us the real story or talk to a lawyer who can help you. You definitely need a better answer for the IRS than you do not have it.

 

[libtard]

He intends to show up with 0 receipts for a 10% margin business. Why would they let him fly if it smells like money laundering, illegal labour etc.? We are not talking about 1 out of 1000 missing. It is all missing. You cannot just tell: "oh sorry, I may have misplaced it, dumped it at the diner" etc. He is going to look like a fool and they know he is hiding something felonious.

It is not just negligence. It is clear criminal intent to run a business like that on purpose. If he is as open as here, they will do all they can to dig deeper. And if they cannot find it, they will charge him for money laundering as he claims to have paid somebody but did not get the W-9 from them nor issue the 1099 form for their income.

It is 100% criminal what you are doing. The only hope is that they won't audit you.

You better tell us the real story or talk to a lawyer who can help you. You definitely need a better answer for the IRS than you do not have it.

why do you keep mentioning money laundering and child labor? you are reading too much into this. all I'm saying is this person has no receipts for his expenses. it's really that simple.