If you claimed you got USD 10 million in bribes, how would the IRS verify that you actually got the money? It isn’t like the people giving you bribes will claim that as an expense… actually I’m not sure how it works.
If you own a restaurant and let’s say you bought a kilogram of tomatoes for a dollar and it spoiled but you don’t claim it as a loss. How can the IRS know this automatically and refund you?
I mean I agree they can for simple people like me who just have a w2 though…
You might receive a letter about an odd amount on a return asking for documentation. A strange claim of millions would likely earn a human audit which would uncover the truth. Keep in mind you can be found guilty for intentionally false tax returns of any kind.
A small discrepancy like forgetting to note wastage would never be caught, assuming it didn’t make it to Quickbooks initially. There has to be some ability to detect and audit what happened in order to correct it. This is partly why restaurants have been historically useful for laundering and fronting criminal operations.
If you own a restaurant and let’s say you bought a kilogram of tomatoes for a dollar and it spoiled but you don’t claim it as a loss. How can the IRS know this automatically and refund you?
I mean I agree they can for simple people like me who just have a w2 though…