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Business owner goes to jail trying to hide income using a check-cashing agency

by | Jan 4, 2024 | business tax, civil penalty, criminal tax prosecution

A business owner goes to jail trying to hide income using a check cashing agency.

There is a mistaken and absolutely crazy belief using a check cashing agency will enable a business to hide gross receipts from the IRS. Not true!

The IRS frequently audits check-cashing agencies and reviews the checks cashed for their clients. They also get bank records and other documents from the check-cashing agency to find businesses using their services. Then, the IRS audits and checks the firms to ensure that customers’ income is reported as gross income. If not, they attack the business owner with criminal and civil tax fraud.

Joaquin Sosa, of New Bedford, Massachusetts, was sentenced to 18 months in prison for evading taxes on income he earned as a commercial fisherman. Despite receiving approximately $1.9 million in income between 2012 and 2021, Sosa did not file tax returns reporting the income or pay the income taxes owed on that income. To conceal the source and disposition of his income, Sosa cashed his paychecks from fishing companies at check-cashing businesses, sometimes using false identities, and used the cash to fund his lifestyle. Sosa caused a “tax loss” to the IRS of $520,415.

If you know a business owner who tries to conceal income by using a check-cashing agency, please have them call me at 856-665-2121. They must only speak to a lawyer, not an accountant or tax preparer, to have attorney-client confidentiality.