Life

Paying Cash, Helping a Tax-Cheat?

By Hanna Rosin June 8, 2009

Dear Bintel Brief,

If a cleaning lady, repairman, tradesman or even a doctor quotes a price to do a service, but then immediately offers to reduce the price if you pay cash, and you suspect the lower price is offered because the provider will not report the income and pay taxes, are you participating in an unethical transaction? Or are you merely participating in one that might lead to something illegal on the part of the recipient of the payment? What is the appropriate way to respond to such an offer?

TAXED ABOUT TAXES

Dear Taxed About Taxes,

Wow. Is this what America has come to? We now have doctors who take payment in cash? Twelve years of training, a fancy degree on the wall and they behave just like a card shark. What next? I’ll be paying my private school teacher with a suitcase stuffed with bills. Seriously, though. I do not consider this a black and white zone but a grey one. When you say “suspect,” what do you mean by that? Merely the fact that someone prefers to be paid in cash is not suspicious. My own father is a New York City taxi driver. Those new credit card machines they’ve installed make his life very difficult, not because he has to pay taxes on the money but because he has to pay a percentage on them and monitor and upkeep the machines and pay to have them installed. So yes, he prefers cash. There might be perfectly innocuous reasons why a tradesman or yes, even doctor, saves money when you pay cash.

That said, if you have a strong reason to suspect someone is ducking out of taxes, that’s a different story. When I was younger, cable installation people were running a city-wide scam. They’d install cable and ask you to pay in cash. It was understood that they would pocket the money and not tell the company. When the cable guy asks for cash, that’s pretty suspicious. But a plumber who works for himself, or the tile guy, or the electrician might have perfectly good reasons for doing so. I’d say don’t assume they’re guilty.

Hanna Rosin is a writer for the Atlantic and Double X, and the author of “God’s Harvard: A Christian College on a Mission to Save America” (Houghton Mifflin Harcourt, 2007). The Israeli-born, Queens-reared Rosin lives in Washington, D.C. with her husband and their three children.

If you have a question for the Bintel Brief, e-mail [email protected]. Questions selected for publication are printed anonymously.

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