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Being Illegal - A California Cautionary Tale - Page 3

post #31 of 61
Recently, I dropped off some "thank-you" cookies for my DH's nurses. After seeing them, a caterer approached me(with her business card) about supplying her with cookies. I explained that I am only a hobby baker, cannot sell from my home while waiting for WA state cottage food law to do inspections. She gives me the ol' wink and nod and says, that's okay, my clients are high-end, you will make lots of money..just "donate" to me and I'll "donate" some cash to you... walked away wondering how crazy she must be to be willling to endanger her business by using someone unlicensed...
I think this is an interesting story, sorry for "Dave" and sorry in a different way for Maude... the IRS will make her life very difficult so it is hard to believe that a mentally healthy person would be willing to risk their wrath.
post #32 of 61
Let's play charades...sounds like, rhymes with..lol....come on we're dying here icon_twisted.gif
post #33 of 61
@ScratchSF, no, don't regret it, you may probably help a lot of new business owners or even established owners in the long run. I too am a trusting person but have learned over the years to see "the proof". bobby flay is a good example, yes, most people would run to do business with him, but in my career (non-cake), I learned that although Bflay may be innocent, his people might not have crossed all their t's. Again, as a matter of course, ask to see the proof.
post #34 of 61
Quote:
Originally Posted by FromScratchSF

I can say I'm regretting posting this thread to begin with, that's for sure.



Don't regret posting it, it's definitely something that people need to think about.

But you're right that if someone has product in a million places and had a lot of media exposure, it's likely that people wouldn't do as much checking as they'd do if it was someone unknown. My husband would make me check, but he's an auditor for a commercial finance company, so he sees that loads of companies that look totally financially sound are really skirting IRS laws, not paying into social security for their employees, etc etc. I probably wouldn't even think about it.
post #35 of 61
hmmm...

soda = coffee
marshmallows = cupcakes?
post #36 of 61
Thread Starter 
The regret comes in because I can't give full details so it makes it even harder to say what I mean without just saying all that I know!
post #37 of 61
Please don't regret the posting. Even though I am no longer in business, or baking anymore, I for one would have done exactly as Dave did - not investigate but assumed everything was on the up and up w/Maude given her 'fame'. Yes, the Bflay line is exactly how I would think of things.
post #38 of 61
Add me to the list of peeps dying to know who in the hell is that stupid!!!
Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
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Beginners, be sure to parrot advice and get your post count up as fast as you can. After all, it's not what you know, it's what people THINK you know.
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post #39 of 61
@SF no dont regret posting it . I think it should be taken as an examp
post #40 of 61
This is slightly related, but it is mainly a story for those illegals out there and to those who don't pay taxes.

Several years ago I got a knock on the door and had my accounting books seized by the IRS. They already had my bank statements for the past few years without my knowledge. I and about ten people did business with a company charged with tax fraud. It ended up that my books actually confirmed his fraud and I spent two years (but only about twenty meetings) with federal prosecutors while they asked me every conceivable question about my business and accounting procedures. I then had to testify for two days about my accounting practices. In this investigation, they obviously looked at all of our business practices. Mine was the only one with not one penny out of place. The other witnesses had fines and penalties just because their books were needed for something else.

When I post about business practices or the Feds and their procedures, it is because while I was helping them, I picked their brains too. I learned so much from that experience.

So while those of you who have less than spotless business practices think you are above the law, you can get that knock on your door for something totally unrelated and find yourself knee deep in hot water with the IRS.

In my situation, the business I was dealing with was legit, but the tax returns were fraudulent.
post #41 of 61
Quote:
Originally Posted by scp1127

This is slightly related, but it is mainly a story for those illegals out there and to those who don't pay taxes.

Several years ago I got a knock on the door and had my accounting books seized by the IRS. They already had my bank statements for the past few years without my knowledge. I and about ten people did business with a company charged with tax fraud. It ended up that my books actually confirmed his fraud and I spent two years (but only about twenty meetings) with federal prosecutors while they asked me every conceivable question about my business and accounting procedures. I then had to testify for two days about my accounting practices. In this investigation, they obviously looked at all of our business practices. Mine was the only one with not one penny out of place. The other witnesses had fines and penalties just because their books were needed for something else.

When I post about business practices or the Feds and their procedures, it is because while I was helping them, I picked their brains too. I learned so much from that experience.

So while those of you who have less than spotless business practices think you are above the law, you can get that knock on your door for something totally unrelated and find yourself knee deep in hot water with the IRS.

In my situation, the business I was dealing with was legit, but the tax returns were fraudulent.



Yes, yes, yes. I don't have this experience myself, but as I said, my husband audits small companies that are high-risk, and need commercial finance loans instead of bank loans. He'll come home saying that he found out the owner of this or that one hasn't been paying payroll taxes, or that this one is behind on income taxes, and he's the one that found out. There was one that was working on two sets of books, too. They've had to go to court several times to testify about what they found so that the lending company that he works for wouldn't be involved in whatever fines were going to be involved.
post #42 of 61
One of my majors in college was accounting, so I have always known the consequences of not being on the straight and narrow of business. But those two years with the Feds was the best education I ever got in business. They were so nice and answered all of my questions because my books gave them what they needed to seize this person's property and charge him.

The first thing they do is match your tax returns against your bank accounts. This is before they come to see you. If you have more than a few birthday checks from Grandma, you have trouble. You know that 7 year rule for the IRS? Well, if they find even one penny of fraud, they can then go back to the "day you were born". to look for fraud. That is a direct quote.

All they found in my books were multiple recordings of business transactions that did not appear in the defendant's books. This gave them the ability to not only charge the man, but to also go deeper and farther back.

So you can't use your bank account. Read further to see why cash isn't safe either.

Another tidbit from thr Fed prosecutors: Almost all tax evaders are turned in by their customers. So when you accept only cash, your customers have a good idea about what is going on. They buy from you, but they resent it. They pick up the phone and report you. My ex-husband was doing some cash deals in his business. We were already divorced but he reported much lower on his tax returns than actual income and that affected my child support. On two different occasions, people who worked with him called me and told me because they were irritated about his unfair business practices. I didn't turn him in, but my daughter's college is being paid by him voluntarily.

People who pay taxes and work witin the law concerning licensing get irritated by those who cheat.
post #43 of 61
Quote:
Originally Posted by FromScratchSF

The regret comes in because I can't give full details so it makes it even harder to say what I mean without just saying all that I know!



and you're saying a lot! icon_rolleyes.gif I would be cautious as to let out anymore info and it might make you more involved than you want to be when stuff goes down icon_wink.gif
It's not "just" cake...it's my life!
WI State Representative for Icing Smiles...start 'Baking a Difference" today!
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It's not "just" cake...it's my life!
WI State Representative for Icing Smiles...start 'Baking a Difference" today!
Reply
post #44 of 61
Regarding "Bobby Flay" and "Maude"... remember, that is how Bernie Madoff scammed millions. "He too big to be illegal...." icon_eek.gif And if you read stories about his "business", he actual used that type of "proof".

We should all be reminded why good , legal and "straight as an arrow" business practices may save us some day! Great post- but I did and dying for the details...
post #45 of 61
Can we know yet? ::insert big hopeful puppy dog eyes here:: icon_smile.gif
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