Here’s the Way Tax Authorities Discover that You’re Undereporting Cash Income at Your Restaurant or Bar – It’s Easy!

I suppose that somewhere in the universe there are Japanese and Japanese-American restaurant owners operating Chinese food places, but that’s certainly not the case in San Francisco’s Richmond District, which has a mess of Chinese  and Chinese American operators of Japanese restaurants.

As here, at Fune Ya, which used to operate on Clement Street. Read about its tax problems via Will “Big Daddy” Kane right here.

Photo via the Richmond District Blog

How do the state and federal authorities know that you taking the cash that customers give you and simply putting it your pocket? They don’t need to visit your place, they just look at monthly reports and compare them with neighboring businesses. So if you pocket half the cash customers give you that means that your “credit card percentage,” the percentage of sales you make from credit cards, goes up, a lot. And I guarantee you that your CCP will be higher than similar businesses in your area. That’ll make you stand out.

Like these people from this other place down in San Mateo County:

“Taxpayer operates a restaurant. For audit, taxpayer provided bank statements and credit card  merchant statements for the audit period, and guest checks and cash register tapes for December 2007. The Sales and Use Tax Department (Department) found that bank deposits exceeded reported total sales, and, for several months, there were no deposits of cash, which were indications that reported taxable sales were understated.”

In that case, the CCP was an impossible 100%. And also, the owners apparently deposited their cash anyway, which also looks funny.

Anyway, if you skim a little bit occasionally, you’ll get away with it. But you won’t save all that much money and you’ll have to keep up with it on a daily basis. And you’ll have to prevent your lousy employees from finding out and reporting you or finding out and skimming from you yourself. It gets complicated.

Now, if you’re used to flagrantly violating any laws you please, then you’re not going to like dealing with one  THOMAS E. FRANKOVICH (State Bar No. 074414). Why? Because he’ll send somebody in a wheelchair into your restaurant and then it’s game over, man. Game over:

“Plaintiff CRAIG YATES is a person with physical disabilities who, on or about March 10, 2008, March 14, 2008, March 16, 2008, August 15, 2008, August 23, 2008, December 20, 2008, March 7, 2009 and March 26, 2009, was an invitee, guest, patron, customer at defendants’ FUNE YA JAPANESE RESTAURANT, in the City of San Francisco, California. At said time and place, defendants failed to provide proper legal access to the sushi bar, which is a “public accommodation” and/or a “public facility” including, but not limited to entrance, dining area, men’s restroom and women’s restroom.”

So, all the money you “saved” through skimming gets paid out to lawyer Tom Frankovich.

And then you shut the place down.

Oh well.

Tags: , , , , , , , , , , , , , , , , , , , , , , , ,

Leave a Reply