Illicit money : how prevalent in farming?

NY 986 · Jun 13, 2018

A farm supply salesman was talking about this recently while calling on me. I think his drift was he was willing to work in cash in a very substantial way. More than what
the government likes to see. Keep hearing about situations where farmers finance rent, fertilizer, and equipment for example where the money is paid in cash (no
checking accounts). I remember back many years ago a farm not too far from here was seized by the IRS for such practices as the farm was financed with drug money
so there was not a legit income stream to show how things were paid for.

Don't worry. I am not considering doing something illegal by the way.

oldtanker · Jun 13, 2018

(quoted from post at 07:43:43 06/13/18) A farm supply salesman was talking about this recently while calling on me. I think his drift was he was willing to work in cash in a very substantial way. More than what
the government likes to see. Keep hearing about situations where farmers finance rent, fertilizer, and equipment for example where the money is paid in cash (no
checking accounts). I remember back many years ago a farm not too far from here was seized by the IRS for such practices as the farm was financed with drug money
so there was not a legit income stream to show how things were paid for.

Don't worry. I am not considering doing something illegal by the way.

Think it depends on the area. Back in the late 80's reports came out of areas where families had made an OK living growing 40 acres of tobacco. Well they limited how much they could grow. Lot of em got cut back to 10 maybe 12 acres. Well they couldn't support themselves in 12 acres of tobacco. One report I watched said that by the late 80's about 70% of small farms in tobacco areas were growing marijuana to be able to make a living off that 40 acres.

So it might be more prevalent in some areas.

Rick

Charlie M · Jun 13, 2018

I'm sure some "horse trading" goes on where cash is used which doesn't get reported for tax purposes. In New York state that is probably worth another 25% or better. That isn't limited to just farming either. I used to visit a junk yard in the 90's where he tacked on another 30% if you paid with a check.

NY 986 · Jun 13, 2018

I think I know the junkyard you are talking about. The owner was really paranoid about the revenuer's. As farming goes I was not talking about trading legit goods or services such as I'll plant your 10 acres of corn if you pick my 10 acres of corn in the fall.

Steve@Advance · Jun 13, 2018

I don't know that farming would be much different than any other business, depends on the honesty of the individual.

But I suspect farms and ranches are being watched more closely now because of the crack down on illegal immigrants. They may want to see employment and withholding records, which could trigger further investigation.

the tractor vet · Jun 13, 2018

Always when dealing in CASH get or GIVE recites and keep records when dealing with JOE BLOW that just showed up and wants to DEAL in Cash , The gov. is tricky as years back they got a jockey friend of mine who was always willing to DEAL under the table and the IRS got him on the sale to some scruffy OLD GUY in a beat up pick up on a so so brush hog he was asking 500 for and the guy said well what would you take for CASH and no paper work , so he knocked off a hundred bucks and folded up the money and placed it in his pocket and loaded the brush hog and the scruffy old guy in a beat up pick up was gone only to return the next day in a suit with the law and shut him down and sized everything including his small farm and they were out on the street . Took over a year of court and a huge fine to dig out of that deal.

Ken Macfarlane · Jun 13, 2018

Very common here on smaller farms but sort of gray - most are small enough to be ?hobby? farms that can?t claim expenses as their limited income would never exceed expenses ie not a viable business. So they buy and sell stuff for cash. I sell to them all the time and they never want their receipt but I do it up anyways for my books.

Accountant warned us years ago to never hide income as a business, the tax man will catch up and not be gentle. His suggestion to clients who wanted to push their luck was to be aggressive with expense claims instead.

Goose · Jun 13, 2018

Interesting thought.

The mob puts money through the laundering process and then invests in legitimate businesses, apartment complexes, auto dealerships, etc. Would large farms be excluded?

NY 986 · Jun 13, 2018

How many mob run farms that are out there is anybody's guess but I would suspect very few. I think what happens is a farmer for whatever reason decides to cut corners with respect to the law. The drug trade is a very wide industry and I suspect some figure that they can put a finger into it without being caught.

Traditional Farmer · Jun 13, 2018

I don't see how they can arrest him as he hasn't broken any law until he doesn't report the sale on that year's taxes when he files them and then if he hasn't taken the equipment off his taxes in the first place he won't owe anything if he sells for less than paid.There is no law against taking cash for a sale and not giving a receipt.

Gambles · Jun 13, 2018

Around here, the "illicit money payments" wouldn't be cash, but perhaps a full or a half of beef, maybe a butchered and packaged hog.

jacksun65 · Jun 13, 2018

Dang I didn't know all our previous generations were criminals for dealing in oh my gosh Cash!!! or bargaining down someone by using cash. I think we all better be issued a card reader when we are born so the Gov can do away with the evil Cash.

NY 986 · Jun 13, 2018

I think that you are missing my point. Everybody uses cash to some degree but I am talking when somebody is using 10's or 100's of thousands of dollars to presumably hide engagement in an illegal activity such as dealing in drugs or fencing stolen equipment.

BarnyardEngineering · Jun 13, 2018

I think you'll find farmers dealing in cash purely to avoid paying taxes far more prevalent than for hiding other illegal activity.

Spook · Jun 13, 2018

I know a electrician who specializes in car washes. He has done some of these places 5 or 6 times in 30 years. Drug dealers buy the business, then hire him to rewire it, as it usually scrappers have torn out all the wiring. They run cash thru the biz, eventually get caught, and the place goes vacant for awhile. These guys seldom quit while ahead.......he leaves business cards and small signs inside, so the next bozo knows who to call. This is in Detroit.

NY 986 · Jun 13, 2018

At least around here the effectiveness of cash would be limited for legit income. Milk check comes in the form of a check. Grain sold to the elevator comes in the form
of a check. Heck, the two closest vegetable stands have cash registers in their establishments that pump out receipts. And the one I know has it not because the owner
enjoyed paying taxes but was quite the opposite until he got his hand slapped by the state. Hay business? Don't have a couple dozen horse people stopping by a given
farm unlike a generation ago all paying cash. Now everybody boards their horses and that establishment wants to write off the expense of buying hay so they want a
receipt. People do not buy sides of beef or pork bellies like they used to. I just don't see a huge money generating cash oriented farm business to any degree.
Everybody paying cash a drug dealer or stolen goods fence? No. But the ones that do are the ones trying to farm on a huge scale typically.

fixerupper · Jun 13, 2018

Then the farmer who doesn’t claim income doesn’t need to claim expenses? How would he spend that much cash? Everyone he deals with would have to be shady. Operating that way would limit the farmer’s possibilities when buying supplies. Doesn’t that farmer participate in the farm program? They pay the farmer direct to his bank acct and send a 1099. If the farmer is in the farm program the FSA has the farmer’s SS# so where is the income off his farm?

It’s ironic how some people brag about being so patriotic to their country yet the same people try to avoid supporting their country financially. Ya, I know, our tax money is wasted so why should I pay tax!

NY 986 · Jun 13, 2018

I am probably younger than you by a bit but I have seen plenty of shady people in the equipment, fertilizer, etc. business during my lifetime. I would imagine that even a
crooked farmer has at a core a certain amount of legit income and expenses to show. The ones that have been caught from what I see usually forgo government
payments as that obviously can create a problem. I would guess all the crooked money is placed at the fringes of the business. Buying a piece of equipment for several
thousand dollars or fertilizer for similar money should be no problem for a crook even if who he is buying from is a straight arrow typically. Just arrange for a payment
plan where the seller gets his several thousand dollars one thousand dollars at a time where it does not arouse suspicion. I remember a fertilizer dealer (long gone) who
was pretty open about taking cash just as long as it was not more than a couple thousand dollars over a 2 week period.

Crazy Horse · Jun 13, 2018

Farmer ...... I believe you're right, no law broken. It's just one of those "I know this guy" stories that make the posts more interesting.

Rich'sToys · Jun 13, 2018

Sooooo.....how many collector tractors get their restorations and new tires written off? I'm sure tractor expense is tractor expense, right?
I'm not a farmer, so I don't know. I'm just asking.

riveroadrat · Jun 13, 2018

Render unto Caesar that which is Caesars. The ones who dont use that tax money right will answer for it. We all know cash is on its way out for a lot of reasons. Mainly, no control of. If you barter, thats good as you dont use government money. Money is a tool that is a means to an end.

4play · Jun 14, 2018

The big banks and .gov are pushing to end cash and go all electronic. Sadly there are a lot of people who favor this idea heavily.

SVcummins · Jun 14, 2018

Wait farmers have money 7

showcrop · Jun 14, 2018

(quoted from post at 07:43:43 06/13/18) A farm supply salesman was talking about this recently while calling on me. I think his drift was he was willing to work in cash in a very substantial way. More than what
the government likes to see. Keep hearing about situations where farmers finance rent, fertilizer, and equipment for example where the money is paid in cash (no
checking accounts). I remember back many years ago a farm not too far from here was seized by the IRS for such practices as the farm was financed with drug money
so there was not a legit income stream to show how things were paid for.

Don't worry. I am not considering doing something illegal by the way.

There is nothing wrong at all with paying or receiving payment in cash. The problem is when it does not go onto the books and reported at tax time. Tractor Vet's story is nothing more than a story. There would be no crime committed until the taxes are filed without including the money.

1948CaseVAI · Jun 14, 2018

(quoted from post at 14:41:17 06/13/18) Dang I didn't know all our previous generations were criminals for dealing in oh my gosh Cash!!! or bargaining down someone by using cash. I think we all better be issued a card reader when we are born so the Gov can do away with the evil Cash.

I know you are tongue-in-cheek there but don't laugh. That is exactly what some pro-government SOBs want to do! The excuse is that cash is too expense for the financial system to handle since it is largely a manually manipulated medium. I hope nnalert catches on. With the encryption the government has no access.

Illicit money : how prevalent in farming?

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