Oh, What a Tangled Web We Weave...

[Dr. Caligari]

On the Lost Horizons forum, CTC Warrior "heatherllane" (who thoughtfully provides her real name in the body of her post), explains another great benefit of filing the CTC way:

Hello,
I have a dilemma that is probably an easy answer, but I am unsure of how to handle it. I owned a coffee shop for 3 years, until I was in a bad automobile accident a year ago. I was unable to work and ended up losing the business. The accident was not my fault and I hired an attorney to ensure I received medical and lost wages reimbursement. I had correctly filed my taxes for the time being in business. However, we are now having to file suit against the insurance company and I'm supposed to prove my income. My attorney had never liked the way I filed my returns and still doesn't accept the truth, even though I've explained it to him many times. He says my word on my bookkeeping will not suffice in court. He says I need either bank records or tax returns showing what I made. Neither of these will work because it was a majority cash business and what I paid myself does not reflect my bank account as I tried to keep cash out of the bank system as much as possible. What is the best way for me to prove my income or documentation that will stand up in court?

Thanks so much!
Heather Jackson

[ArthurWankspittle]

I envisage the attorney for the insurance company laughing so much that the check he writes for $0.00 to cover her lost income is barely legible.

[JamesVincent]

I had correctly filed my taxes for the time being in business.

No, if you had actually filed your taxes correctly this would be a non-issue. Instead, you filed them the way you wanted to and are now being screwed for it. Enjoy the ride to bankruptcy. Cash is still a taxable commodity. What happened to all of your receipts? All your X-reports or Y-reports from your cash register that you should run everyday or at least once a week, depending on business? What happened to all your sales tax info which would reflect your intake on any given day since you are required to charge sales tax? What happened to your accounting, since you would have to show income to be able to write off income? What happened to any of a million things that a legit business would do to be able to CYA when it comes to the taxman? Is it an LLC, Chapter S, what? If you "kept money out of the banking system" why are you now in such desperate need of cash? How'd that work for you? And why in the world would you be asking this question ON THE WEBSITE OF WHERE YOU WERE SCREWED TO START WITH AND NOT TAKE AN ATTORNEY'S ADVICE?

Think I need decaf

[Dr. Caligari]

And why in the world would you be asking this question ON THE WEBSITE OF WHERE YOU WERE SCREWED TO START WITH AND NOT TAKE AN ATTORNEY'S ADVICE?

And why in the world would you sign your post with your real name?

[Paths of the Sea]

It seems I recall a similar problem being voiced by certain Gulf Coast businesses who were making claims against British Petroleum for damages to business resulting from that big oil spill a few years ago.

For some reason, their tax returns were inconsistent with their damage claims.

Sincerely,
Maury Enthusiast!

[LPC]

There's a thread on the same issue in the archives here.

Even has the same "tangled web" quote.

I found it by searching for references to Karl Kleinpaste, who successfully failed to file income tax returns for a number of years, and then he wanted to get a mortgage, to he supplied the bank with copies of tax returns he had never filed. Ooops. The result was convictions for five counts of willful failure to file, three counts of tax evasion, and two counts of bank fraud.

[grixit]

Was this a full fledged coffee shop, or a hole in the wall diner? Because if the former, then she would have had employees. I wonder how she handled payroll.