Visits to 250 businesses last week by Internal Revenue Service agents turned up 104 across the state that had failed to report cash transactions of more than $10,000, said John Burke, IRS district director in North Carolina.
``If you are running close to 50 percent non-compliance with something this important, I think you have a serious problem,' Burke said.The IRS levied about $54,000 in civil penalties on the 104 businesses - $50 per violation and, in a few cases of intentional violations, up to 10 percent of the unreported cash. A few of the business also could face criminal charges, Burke said.
Businesses are required to file Form 8300 with the IRS each time a customer spends more than $10,000 cash.
Drug dealers and tax cheats often buy big items with cash to disguise their illegal income. And some businesses are willing to avoid filing the 8300 forms, the IRS says.
In a crackdown effort, 150 IRS and state revenue agents checked 1989 and 1990 financial records at car, boat, aircraft, jewelry and fur dealers and real estate brokers to see whether they were obeying the law.
``We have to look at whether we should do a better job of enforcing it, or of educating businesses,' Burke said.
IRS and state revenue agents will finish visits to about 280 businesses by Tuesday, Burke said.
The IRS and state Department of Revenue also will check tax records of buyers of the big-ticket items to determine whether they reported the income they spent.
In 1989, only 21,300 cash sales of more than $10,000 each were reported nationwide. North Carolina businesses reported only 327 - a number that the IRS thought was too low.
Businesses were selected for the sweep from a random sample and from leads on possible violations. Agents visited 36 businesses in Guilford County. Burke said he did not know how many violations were found there.
``When we started on this, we thought there was some truth in the adage that money talks, but cash whispers,' Burke said. ``We found out there has been some whispering with respect to cash transactions, and we're trying to amplify that a bit.'
Civil penalties for violating the law will be stiffer come Jan. 1: a minimum of $25,000 per violation or 100 percent of the cash involved, up to $100,000.