Tax treatment of Passover "sales"?

The totally-a sham sale isn't the only way this is handled. I've heard from semi-reliable sources that the owner of one of the Kosher restaurants in Boston actually sells the restaurant to his non-Jewish employees during Passover and actually lets them keep the profits from that week.

This is an inaccurate generalization. It is certainly not accurate in the case of a Kosher restaurant which remains open for business, preparing and selling non-Passover food, during the entire holiday.

This really isn't the appropriate place for this discussion.

Certainly, this is not the appropriate place to first make a tasteless, bigoted joke about Jews being stingy, and then to follow it up by making disparaging comments about Jews who follow traditions in which you do not believe. "I'm Jewish, so I can make offensive jokes about Jews and disparage the beliefs and practices of other Jews with impunity" does not wash, Barry.

This contract is primarily intended for the sale of people's personal chametz (food not permitted on Passover), not of a business that produces or sells chametz.

If the business is shutting down completely for the entire holiday, then this contract might be adequate to sell its chametz. But for a business that's remaining open, things are significantly more complicated, for all of the reasons outlined here.