IRS,business,tax question

Oct 24, 2006 2 Replies
E

Hello to all accountants, CPA and IRS agents. I have a question. I have a friend who lives in Southern California. He used to work full time making about 10 bucks an hour. He quit his work back in December



2002 to attend college full time and didn't work since so didn't pay any tax for almost 4 years. As soon as he graduates this coming December , he is planning to open up a $120,000 fast-food restaurant with cash from his checking account. Will he have any problem with IRS? Will IRS come after him asking where he got the money etcetera? Thank you in advance.


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wrote

Man, you know how to pick 'em.

Possibly. I'd be more concerned about the California tax board, and the liquor licensing application, which will ask (and they'll check) where he got the money from. Unless he's going to turn down a 30% increase in sales from the bar, he's got to have a plausable explanation.

Again, anything is possible.

For kicks, where did he get the money from?

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