Taxes should be a part of everyone’s personal accountability. If a business wants to evade taxes, it will do it in some way or other (whether I pay in cash or not). Of course businesses should pay taxes, but it’s not my prerogative to oversee how they handle their taxes. If I start making other people’s honesty as my prerogative, I would probably have to stop dealing with half the people in this world (For example, I buy stuff from eBay, make payments through Paypal…etc., how and why should I worry about what people are doing at the other end of such transactions?)

Jim, also I think there is a difference between a cash transaction without a receipt and a cash transaction with receipt. Or am I mistaken? As far as I perceive it, only cash transactions without receipts carry the burden of unaccounted cash…and cause problems like Tim mentions in the first comment :”the problem with this is that it also gives you no recourse in the event something you purchased, etc, does not pan out.”

It’s been awhile since I’ve actually carried a large sum of cash anymore – most often it’s plastic. With my recent need for car repairs, it’ll certainly be interesting to see what approach the mechanic takes.

That being said, I still think the business should pay taxes.

Even if you do not think it is your RESPONSIBILITY to make sure other people are paying taxes, think of it as protecting yourself. You work hard and pay taxes (I assume), so do you not believe that others should do the same?

I know that a small vendor not paying tax on little bit will not double the deficit, there is no way to tell the impact that tax evasion has had on this little (huge) mess the U.S. government has gotten all of us into.

I have more moral qualms with helping them cheat on their credit card merchant agreements (which universally prohibit cash discounts) than their taxes. But ultimately the reason I’m being offered a discount isn’t especially relevant to me…I just take it, assuming there isn’t some good reason on my end to strongly prefer another payment method.

If the seller tells you that he’s charging you less because he doesn’t have to pay taxes, I’d think that makes you party to his evasion.

Let’s say, completely hypothetically, that he fesses up to the IRS that he didn’t pay his taxes. And that he told you about it. And that you agreed to it with a wink and a nod so long as it wasn’t in the contract. Are you now going to lie to the government about it? If you can claim that you weren’t crossing an ethical line before, even the most ethically lax would have to acknowledge you’re crossing a line by lying about it later.

There’s nothing wrong with paying a contracter in cash. There is something wrong with paying in cash so that he can evade taxes.

If your contractor offers a 20% discount for paying in cash, an educated person knows exactly what he’s doing. In my opinion, accepting the discount in that case is ethically wrong. In fact, at that point in my opinion giving your business to the guy at all is ethically wrong. It’s akin to buying a car stereo at a 75% discount from some guy on the street. You _know_ you are enabling a crime and encouraging the criminal to continue stealing. Perhaps you aren’t legally responsible, perhaps you are. I suspect in some cases you may be. But regardless, it is ethically wrong.

Of course that puts you in an awkward position of only paying full price even when you pay in cash. Then it’s quite possible that the contractor is evading taxes _and_ pocketing a big bonus for his trouble.

I don’t see how getting a discount by paying in cash would implicate me in tax evasion. Case: I negotiate a lower price for services by paying in cash. Seller says this is because he doesn’t have to pay taxes on the sale. I sign a contract or receipt listing the services paid for and the cash price paid. There’s NOTHING on the contract or receipt that says anything about tax evasion. I pay for the services. I receive the services.

Now, if the IRS is going to come after me for colluding to evade taxes, I have my records straight: I paid cash for services received. I have the documentation that proves it. The seller also has a copy of the contract or receipt. If the seller neglected to include that documentation in his income, that’s HIS PROBLEM, not mine.

I think the key is documentation. If you’re paying in cash, you need the paper trail to stay clean.

I think if you collude with someone, you legitimize the fraud. If you do it how can you complain when corporations set up questionable tax shelters and evade their taxes on a grander scale?