The IRS is out there attempting to catch tax cheats. I just read about on way in which they were successful.
The IRS has agents go under cover posing as prospective buyers of a taxpayer’s business. It seems that this was done in order to get the seller to reveal that they kept a second set of books that shows higher income than reported on the seller’s tax return.
That is how agents caught a father and his sons who operated two strip clubs. The three, who were ultimately convicted of tax evasion and were recently sentenced to prison and made to pay restitution for their misdeeds.
I just can’t fathom why they fessed up to the second set of books. If they really planned on selling, report actual revenue and expenses and do it all legally. I guess I am just too honest.