IRS, Auditing, and Taxes

[PistoneScrapProcessing]

I just found this interesting link not sure it if applies to everyone but it was an interesting but long read. Just figured I would post the link since I have seen numerous posts on here about tax questions and other issues pertaining to taxes and how to file correctly.

Cash Intensive Businesses Audit Techniques Guide - Chapter 16

[Electrowaste]

Thanks for that! I am sure ONE DAY I'll read it, just as soon as I get done with these computers!

[stillwaterrecycling]

One day. You should read now. The IRS is on this site. If you run a cash scrap business with any success they have sold to you. Why ??
Your competition. Yes the place before you who ripped everyone off paying nothing and now your here paying people right.

They will rat you out. Nothing to worry about if you have a brick and mortar location plus expenses.

IRS Dor sees income maybe in checks Coming in. Just now they realize that us in scrap pay for our stuff.

Do the math. Make a million in sales. What does it cost to trasnfort warehouse and work that many customers to even put out a million bucks. It's lucky you'll make 10 percent profit on thr transactions alone. That's 100k. Then Add in thr cost to run a business. **** rent can be 10k or 40k a month. Depends on your location. Rent could be free

Rest assured the country has a task force in the IRS just to audit scrap companies. Don't be afraid. Unless you work outa your house with no slips or expenses.

Wait I take that back. IRS you should always be afraid. A place I know before their audit he got a ton of free and real good profit deals before his audit. First time ever. Lol. Little too odd huh. Lol lol.

Look in people's eyes. Notice a scrapper with nice clean nails and good shoes. Not like new but 300 shoes or **** shoes and ax 300 dollar jeans. Lol. They think we're stupid. Just do it right. No worries.

Gov and IRS I love. They spend time busting small business asses when ge pays like 5 percent and drug dealers make millions kill hurt people's lives and do it all tax free then turn and get off for jamming up someone higher up.

Look at the signs and follow your gut.

I use to act like I was always making $$. It feels like it but actually do the math. I made more with a little truck and decent volume and no overhead. I wake up knowing if I don't make what like 500 a day profit Im losing $$. Still scrap. Funny how immsure they think Im rolling in $$.

Karma. Just do the right thing.
Aaron.

Think your getting a plant. Offer to pay them nothing or so low it's too good to be true. Thats what they want to say our business is modeled after that transaction. Lol. Look they know our markets, margin and sales of scrap better than us owners. You just don't want to be the one they make an example out of.

Don't be fooled. Every text call and post here is logged and kept under some homeland security law. Just because some jerks wash $$ in our business. Sucks for the good guys. Especially if your a few hundred miles from any boarder. That canda too folks. Don't be fooled. Don't over react. Just your thing do it well and right. Sleep tight.

Aaron.

[Bear]

and always remember, just because you're not paranoid, doesn't mean they're not out to get ya! ; )

[travistemple202020]

wow I am not for sure if that's just an example but if your only making 10percent than your doing something wrong which renting/leasing is a big mistake unless its for the sort term like a year tops or for that matter if you have to make so much is the wrong words I hate hearing that because I do this for fun and my own hours and so forth even with competition things always flow in for free for the most part. I have the patience to tear it apart and save the money and will soon be buying a property to increase my effort to a point that sets me up for my future with out being in debt or having a lease cause its a waste of money. I keep track of every penny I make and spend. at the very least after all overhead I make 80% profit because I build and grow my business over time so that it remains fun and lucrative and I am small tiny even vs. so many others but that's just my way of doing things and as for the irs. there its simple as they set rules to follow and even if you disagree with some if you follow them and take care to prove you income and spending its not a problem and they will leave you alone. same goes for regulations they vary from county to states and if you take care to learn and follow them you can make great money and go above them to help the environment and yourself at the same time

[mrsamsonite]

I just found this interesting link not sure it if applies to everyone but it was an interesting but long read. Just figured I would post the link since I have seen numerous posts on here about tax questions and other issues pertaining to taxes and how to file correctly.

Cash Intensive Businesses Audit Techniques Guide - Chapter 16

I read the whole link and is it just me or is anyone else offended that the IRS is calling some of us "scrap peddlers"

After reading the link, it seems that if you save your receipts, claim your income, and dont do anything shading you wont have any problems with the IRS.

[NHscrapman]

two words
Tax Lady
worth every penny

[jeb1212]

That IRS link give me a 404 Error Page, new link is:

Cash Intensive Businesses Audit Techniques Guide - Chapter 16

Chapter 8 on the Underground Economy makes for some fun reading.

"Areas for potential abuse include the house with the perpetual yard sales, eBay sellers, craft fairs, selling homemade tamales, doing car repairs in the backyard, collecting cans and bottles for recycling, selling goods at pawn shops, day laborers on street corners."

How PC, the IRS is multicultural.

I wonder how many audits they perform on people "selling homemade tamales" or "collecting cans and bottles for recycling". ROTFLMFAO, there must be big tax payments to be found there.

[jeb1212]

I read the whole link and is it just me or is anyone else offended that the IRS is calling some of us "scrap peddlers"

After reading the link, it seems that if you save your receipts, claim your income, and dont do anything shading you wont have any problems with the IRS.

Should be no offense taken as "scrap peddler" or just "peddler" is the standard scrap industry term for an individual that sells scrap to a scrap yard.

[jeb1212]

Here is an individual scrapper that got nailed in 2013 by the IRS:

USDOJ: US Attorney's Office - District of North Dakota

"Omerovic, a self-employed scrap metal dealer, in 2006 purchased and obtained scrap metal in Fargo and the surrounding area, which he then sold to a number of scrap metal dealers, primarily in North Dakota and Minnesota. The investigation conducted by the Internal Revenue Service - Criminal Investigation Division, showed that Omerovic’s gross receipts for the year totaled in excess of $152,000, with an estimated tax loss, for sentencing purposes, of more than $30,000."

[Mick]

Here is an individual scrapper that got nailed in 2013 by the IRS:

USDOJ: US Attorney's Office - District of North Dakota

"Omerovic, a self-employed scrap metal dealer, in 2006 purchased and obtained scrap metal in Fargo and the surrounding area, which he then sold to a number of scrap metal dealers, primarily in North Dakota and Minnesota. The investigation conducted by the Internal Revenue Service - Criminal Investigation Division, showed that Omerovic’s gross receipts for the year totaled in excess of $152,000, with an estimated tax loss, for sentencing purposes, of more than $30,000."

And he thought he wouldn't get caught?? What an idiot.

[KzScrapper]

Most yards may not issue a 1099 but they do have the Paper Trail to produce one if need be so I think it best to stay clean...especially if you want to take advantage of the Business Deductions.

[Patriot76]

I could not access the site from the post so I went to the website and did a search. Read many regulations and came away very confused.

When I hauled my last load of 2013 I asked the yard to print a statement of all of my sales to them to make sure my records matched. I was told I did not have to worry because the only way I would be audited was if the scrap yard was audited. I did not trust this and insisted on a statement. I would recommend that every scrapper get a statement of their yards records. I discovered they recorded several transactions to my account when I was not even in the country. I use a separate account for recycling aluminum cans and scrap from the ranch since non of it was depreciated.

After reading the regulations and my experiences, I have to believe even if I kept detailed records, if the IRS wanted to get me they could. The only thing I could do is limit the damages.

It is embarrassing when an educated person cannot fill out a tax return with confidence in a republic. Not religion, not politics, just fact.

[directrecycle]

My small time rural yard does not offer end of the year reports because they are still doing it the old fashion way, by hand. The non ferrous yard i use will run the report for $30.

[Patriot76]

My small time rural yard does not offer end of the year reports because they are still doing it the old fashion way, by hand. The non ferrous yard i use will run the report for $30.

I think if you tell them you are being audited and will give the IRS their name and contact information they will provide you with the information within five business days and free of charge. They are required by law to provide the information free of charge. Scrap yards do not want to be audited any more than we do. I just told my yard I want to be honest and do not want any complications and if our records do not match we have a problem. They were very receptive.

[Patriot76]

I tried to delete the first post without the quote. I guess I am stuttering.











DONE,,,

[Electrowaste]

One day. You should read now. The IRS is on this site.

We are an LLC, and we try to do everything the right way including buying and selling. We get paid by check and we pay by check or cash with signed receipt. One should not assume that because we are in the "scrap" business that we are doing the wrong things or need to beware of the IRS. We work hard at crossing our T's and dotting our I's. If we had an IRS plant in here, they'd be proud of us! I am aware that the IRS can be rough but we will not fear them or be paranoid of them. We'll keep recycling electronics, they'll keep counting beans, life will go on.

[stillwaterrecycling]

There here not maybe as active members but just reading and learning.

No one is paranoid.

But what 80 percent margin. Have you scaled your business lol. If so if you hit 7 figure you made 800k clean. Come by and build me
A warehouse. lol

Ofcourse renting isn't always perfect. I can't afford to spend 7 million to buy a warehouse out here in mass. You must live somewhere else.

When you scale your busiess you will find the sales go high and margins are okay if u have huge huge capital to buy and sell to end refiner/smelters.

You def not in the batt busiess.

I'm jealous. Just making it here.

Not for long.
Aaron Stillwater.

[Buster]

It has to be cash in and cash out. If you take cash and put it in the bank; they can track you by credit/debit transactions. The Dodd/Frank Law that was supposed to protect us from banks; created the consumer protection board. They track every credit/debit transaction. Just like the NSA tracks all calls and emails.

Big Government is Big Pain in Ass.

[mikeinreco]

I remember some song lyrics I heard "I got everything in my MAMA's name"..........LOL.....Just kidding but if the IRS is on this site (I did file last year).........They can come get my 7 year old F150 with 165,000 miles on it (I DARE YOU).........Everything else is buried on a remote island in the SOuth Pacific