Malibuflyer wrote:
What does the IRS do, if the customer claims to have paid the amount of x to a vendor (and hence wants to deduct that amount from some tax) while the vendor claims that he never has received any money (and hence does not want to pay taxes)?
I’m not aware of any taxation system which attempts to implement ‘transaction matching’ across the economy – i.e. if I claim a property maintenance expense against my income tax then in order to be allowed it has to be matched with an item of income that a business or individual pays tax on. It would be totally unworkable.
The customer just pays the vendor and, if proof of the expense matters to them for taxation reasons, obtains a receipt or somehow otherwise gains proof of payment. What the vendor does with the money and whether they pay the taxes they’re supposed to is nothing to do with the customer and has no bearing on them claiming it against their own taxes.
@Silvaire what are you talking about? You obviously do not understand that people who work in the black economy are committing a crime in the USA, UK, France and many other countries.
They are committing a crime because they are earning money without declaring that income.to the tax authorities.
This is tax evasion.
By aiding and abetting a tax evasion, if the tax authorities in the USA put their mind to it and they have been known to, they can charge you even in the land of the free.
The difference in France is the integration of taxes, pensions.and health services makes it easier for people to get caught or to be disadvantaged on retirement for instance.
I like living in France, I enjoy my quality of life. You obviously enjoy your life in the USA. You and I have different priorities in what makes for a good quality of life. So just as I do not want to live in the USA, you have written many times you wouldn’t want to live in Europe.
Europe is (or at least was pre-Covid) and a great place to vacation and spend the products of work and investment 
There aren’t that many Americans that have both Dollars and Euros simultaneously in the wallet at all times, but I’m one of them (really)
gallois wrote:
They are committing a crime because they are earning money without declaring that income.to the tax authorities.
This is tax evasion.
By aiding and abetting a tax evasion, if the tax authorities in the USA put their mind to it and they have been known to, they can charge you even in the land of the free.
Paying someone in cash who subsequently does not declare the income for taxation purposes is not “aiding and abetting tax evasion”. There is no obligation on you, the customer, to ensure your vendor has their tax affairs in order. How could there possibly be? How would it work?
I have no obligation to ensure Bob the builder is declaring the income for tax purposes when I pay him £500 in cash, just like I have no obligation to ensure Amazon are declaring the income for tax purposes when I buy something from them.
Suggest you research how aiding and abetting is defined in various legal jurisdictions. Simply doing business with someone who happens to commit a crime is not by definition aiding and abetting. Mens rea is almost certainly required, and at the level we’re talking about (cash/cheque payments to contractors) almost impossible to prove.
Graham wrote:
Paying someone in cash who subsequently does not declare the income for taxation purposes is not “aiding and abetting tax evasion”.
Absolutely true – at least in countries where you as a customer are not obliged to get (and store) the receipt – and then it is not paying in cash itself but not asking for the receipt.
Effective enforcement of such rules is always about checks and balances – and about balancing the risk of getting caught with the consequences. If there is not even a theoretic way for the government to catch somebody who is braking the rule, the rule can be eliminated.
Therefore the whole thing about mandating receipts, requiring cashless payment beyond a specific amount, etc. is only about creating at least a theoretic way for the government to catch those who brake the rules. Even if practically they rarely do the matching on individual transaction basis (in some cases at least in Germany they do), they therefore can establish a credible balance that sticking to the rules is more attractive than not sticking to the rules.
And now let’s get practical: In the vast majority of cases where people pay bob the builder in cash without a receipt, they actually do so because the customer and bob are colluding to evade tax and social security contributions. Yes, it may well be that technically bob is responsible for this alone, but if – again very practically – Bob asks you if you want to pay 1000 with receipt or 800 without, no customer can get away with a naive “I thought that printing the receipt is to cumbersome for bob and therefore he rather forgoes 200 EUR of profit than giving me a receipt”
I think its a bit funny that a paper receipt is considered (by some) so important. I’ve never had a US vendor suggest to me that he’d give me a lower price without a receipt, because the receipt is relatively unimportant – he’ll declare whatever income he declares on his annual income tax statement without my help and I can’t imagine the IRS wanting to reconcile his claimed income against a stack of receipt copies. If they’re really going after him they’ll check his bank deposits, which won’t easily be traced to any particular job done through a tax year. If he’s at such a low economic and legal level that he doesn’t have a bank account, he’s not worth going after. Anal retentive pursuit will not help anybody.
Some of the vendors I use operate with virtually no overhead, no office, no paperwork. I write them a check if I need proof of payment for my own tax purposes, otherwise cash works fine for me, with or without receipt. I don’t usually hire people who aren’t connected in some way to mutual contacts and/or the potential for future business, and I know how to find them if something goes wrong.
Silvaire wrote:
You seem to me unable to escape the paradigm that government is responsible for managing individual lives, and all societal functions.
Not at all. As I wrote earlier, my view of governments is not that far from yours, but I think my perspective is very different.
Silvaire wrote:
Europe is (or at least was pre-Covid) and a great place to vacation and spend the products of work and investment
Funny. I feel the same about the US. It’s a great place for a vacation, but I wouldn’t want to live there, ever.
I’m just fine with having taken circa 50 vacation trips to Europe on the last 25 years or so, and having had the opportunity to earn the money to do so. Having left school with $100 in my pocket that makes me quite happy. It also doesn’t hurt that most days of the year its flyable VFR in my area without nonsensical regulatory BS, that my solely owned plane lives in its own hangar ready for me to arrive any time, that 100LL is currently less expensive than auto fuel, that it’s currently (and mostly) short sleeve weather without a cloud in the sky…and several other things.
What others would never, ever want to do is not exactly a concern 
To each their individual, hopefully transportable own.
It’s a great place for a vacation, but I wouldn’t want to live there, ever.
That’s true for nearly all countries which are nice for holidays
But the US has a huge spectrum of landscapes and cultures. N California for example is as different from Wyoming as any two places in Europe. I’ve travelled the US fairly extensively many years ago.
