I was thinking of things like the merch counter at big concerts in the 70s, 80s and 90s. There would have been a massive amount of transactions taking place and no physical business location. Led Zeppelin famously had a quarter million in cash stolen out of their hotel safe in 1973.
Were police officers assigned to events like this to verify when the cash was counted or was it just shrugged off as “nothing we can do about it”? (of course if you’re dealing with that much cash, it’d be easy to hand the officer one of the bricks to look away as you fudge the numbers…)
I’ve never heard of ordinary police observing any legitimate financial transactions. The IRS and other government agencies, as well as the businesses themselves institute procedures to make sure some transactions don’t get hidden.
I’m sure this was mostly managed by tax authorities after the fact. Hiding cash to avoid taxes is quite common and at the small scale is uncontrollable.
Of course there was a physical business location. It just probably wasn’t the same location as the location of the merch booth. But when the organizers placed the order from the T-shirt company, and got the delivery of shirts from them, they had to have been in some place functioning as an office.
If audited, cash records can be checked against inventory to make sure cash received == Inventory sold.
This is not an issue limited to rock concerts. Lots of places still take cash.
Back when I worked at Radio Shack in the 80’s, they employed ‘shoppers’ to test us. Some guy would come in, grab a $2 item off the shelf, throw a $5 of the counter and say, “Keep the change!” God help you if you pocketed the extra $3, because later on head office accountnts would check the day’s receipts for the $5.
Or they’d buy something and refuse a receipt. Now you could pocket the cash and no one would know. The missing item could be written off as theft. But if the guy was a ‘shopper’, failing to write up the sale would get you fired, and if the amount was large enough, maybe charged.
Back in the day, reconciling cash at the end of the day was a big deal. The end of every day involved counting out the cash and making sure it balanced with receipts. If you were over or under by more than a few cents, it was a problem that required recounting, and if the discrepancy was still there, writing a report abiut it. Persistant cash shortages would trigger an investigation, as would higher than normal shoplifting rates, because most store theft used to be internal.
Are we talking about people selling T-shirts and stuff on the street or in the actual concert venue? Because as best as I can remember from the 70s and 80s, most of the venues I attended big concerts at sold t-shirts and such from the same places they sold circus and ice show souvenirs , possibly run by a concessionaire. And they would have certainly had a physical place of business. I suppose it’s possible the people selling on the street didn’t ( They could have picked up the t-shirts in person) , but for the most part, when the police get involved with people selling stuff on the street, it has to do with permits, not taxes.
Sometimes merch sales are done by the venue like refreshments are, but very often the act, a band for instance, gets to do their own merch sales. That may in itself be done by a separate business run by the promoters or contracted to them. Someone who worked for a promotion told me stories about tables coming in short at the end of the night, but also that the merch was disappearing all along the way starting with the trucks being short, boxes not full, and too many people had keys to the lock ups at the arenas.
Yeah. I’ve never heard of companies demanding extra cash goes into the till. It is reasonable to be considered a tip when someone says “Keep the change!”. Reasonably the clerks might be instructed to put such money under the drawer in the register in case the customer returns looking for it, but to count the drawer looking for an overage is bizarre.
You are conflating the accounting practices of the business with the secure handling of large volumes of cash.
Even with Venmo, credit cards, and other cashless payments methods, many businesses still deal with some amount of cash.
As for the accounting - could you run an all cash business and literally never report any taxes? Sure. Particularly with something like traveling around selling T-shirts.
Cops aren’t forensic accountants or auditors. If they were to be employed in this context, it would likely be as additional security to protect the cash itself and you would hire more than one.
As a general rule, businesses protect their cash through various audits, controls, and oversight checks. For example, let’s take a bar:
The owner or manager knows how much inventory they ordered and what those inventory levels are at the end of the night.
The register knows who is on register, what drinks they rang up, and how much cash exchanged hands.
The bank records how much cash has been deposited
So if any of these things don’t add up, an astute manager or the owner can evaluate if their employees are maybe overpouring a bit, passing out too many free drinks, or skimming money. Of course there are ways to hide some of this stuff too, but if you get caught now you are getting into potentially more serious charges like fraud, money laundering, or racketeering where they might send you to “pound me in the ass” prison.
Not at Radio Shack. It was explicitly against the rules. All cash received must be recorded. If a customer left $5 for a $2 item and walked out, we would have to write up a receipt for the proper price, write “Customer left without receipt” in the name field, ad then at the end of the day when the till was out $3, we’d write the discrepancy up as “customer left extra money”. Accepting tips was not allowed.
Yeah, for sure. All the rules around cash are still there, because cash is still a big deal.
Answering the OP’s question about taxes, you declare your cash earnings just like anything else. If you get audited, they are going to want to reconcile your cash with things like inventory sold, your balance sheets for all expenses, whatever.
The biggest issue with cash as far as the government is concerned is not things like sales of T-shirts. Physical goods require invoices and such that make it hard to scam.
The most common scam is undoubtedly under-the-table cash for services. You contract someone to build you a deck, and he says, “It’ll be $1200. However, if you can pay cash and don’t need a receipt I’ll do it for $900.” Unless the person paying goes to the IRS and rats the contractor out, it’s very difficult for the government to find that kind of fraud. Especially if the cash is not deposited but used for day-to-day expenses. Then the only way to spot something wrong is looking at your lifestyle vs your declared income, and that’s a hard thing to prove if you have even a semi-plausible excuse.
Another very common cash scam in the south is hiring day laborers. Almost all want to be paid in cash, and many are undocumented and don’t want or need an invoice. And they aren’t going to rat you out. So you stop at Home Depot in San Antonio, pile four guys into your truck and get them to dig fence holes for you. Then you pay them each $75 and drop them off, and no one knows you didn’t do the work yourself and no taxes are paid.
That’s the kind of thing I think the 87K new tax people are going to be looking for. It’s also why they wanted to lower the limit on cash reporting to $600.
How far back in time are we going with this cash taxation explanation?
Because that was the whole reason, in the story, for Joseph, Mary, and the soon to be born little baby Jesus, to be going to Bethlehem in the first place.
I’m not sure about that - because the limit being lowered isn’t on cash reporting. It’s the limit for when third party payment platforms have to issue 1099s and cash is not involved with third party transactions. They used to have to report over $20K in sales or over 200 transactions and I’m sure it is intended to capture the coffee truck’s $10K in transactions through Venmo or the ebay seller who has $15K in sales on new or collectible items. The thing is, no other 1099s had such a high threshold to begin with - if I win money in a bowling tournament , I get a 1099 if I win $600 or more in an event. if I have gambling winnings, the threshold is between $600 and $5000 depending on which type of gambling. If I receive non-employee compensation of $600 or more in a year from a business , I will receive a 1099. Only third party payment platforms had that $20K threshold. If a person is selling old , used items on eBay for less than they paid for them, they don’t have to report it as they didn’t earn any income, They should keep records in case the IRS notices, but they don’t have to report it because it isn’t income.
The coffee truck will still be able to hide their cash sales and so will the businesses that do “cash, no tax” which is not limited to services just the same as they always have - the change in reporting won’t change anything for them
Having worked security at a few large venues, back in my college days, you would usually have an off duty cop or armed security watching the cash, and escorting it to the bank.
Now taxes on that income? The IRS could see how full the venue was, the company would file tax returns with the income and expenses reported. Mind you, that doesnt mean a little skimming wasnt common.
Which is one reason why cash is not a lot cheaper than credit cards, despite the card 2% charge.
Yeah, sure if the contractor isnt greedy and keeps that on the down low, that can and does work. But people like that are foolish and greedy, and they start reporting $400 in net income while driving a $50K truck . a Cadillac, and living in a McMansion with a pool, etc.
Not to mention sooner or later someone is gonna rat them out. Maybe a customer who thinks the job is shoddy or even that the dude was rude. Or- most commonly the ex-wife, who he dumps for a trophy wife. Hell hath no fury…
Yeah but those laborers wouldnt owe income taxes anyway.
The change in reporting- no. The 7000 new agents? yes. Which is why the GOP hates the IRS.
Assuming complete compliance with all laws and all reporting requirements by both laborer and their employer(s), …
Your typical day laborer doesn’t earn enough money in a year to owe any income tax. They would owe SS & Medicare tax, and if they had kids they would be eligible to claim the earned income credit which would produce an income “tax refund” even though they had no income tax withheld.
Contractors get it from both ends, though. Their workers will often want to be paid cash, and the customers will often try to get a cash deal. If you pay a worker in cash, you can’t deduct their cost on tax, so the temptation is then to do a cash deal for the client.
In a perfect world, all the employees would be on the books properly. But when labor is short it can be hard to get workers. If they want cash as a condition of doing the job, it can put a contractor in a tight spot.
Then those accountants didn’t have a clue how their business worked. The standard response to that, by any clerk who was even half-way honest OR realistic, would be to ring up the sale like normal, put the $5 in the till, and then pocket the $3.