3 reasons you shouldn’t cook the books as a private investigator.

Cooking the books means to adjust your accounts receivable or your tax deductible items attempting to make it seem like you’ve earned less money so you can pay less taxes.

This week I want to give you three reasons you should not try to cook the books as a private investigator.

Reason #1

It’s unethical. It’s just wrong to cheat on your taxes. For better or for worse, we have agreed that the tax system that’s in place is the one we’re going to deal with.

If you want to change the system then you have to change the way you vote. You have to change the way you lobby and even the candidates you contribute to. You have to be real advocate for that change.

In the meantime, we – as a society – have agreed that our tax system is the one we’re going to work with for now. That means you have a rightful obligation to give the true numbers to the tax guy. To pay taxes on what you actually earned.

The first reason to not cook the books is because it’s unethical. You need to operate an ethical manner in all aspects of your life.

Reason #2

The second reason is it’s illegal. It’s fraud and you can go to prison and/or can pay immense fines and penalties. That’s what we – as a society – have agreed to when someone commits a crime.

At first, you may say, “Isn’t being illegal the same as being unethical?” Nope. Not necessarily. Being illegal is a little bit different. There are plenty of things that are legal, that are wrong or unethical.

But cheating on your taxes is illegal and that’s reason #2 you should not cook the books as a private investigator.

Reason #3

Reason #3 you may not have thought of. This may not be something you care about now and it may be years from now before you do care about it. But if you ever want to sell your business, the person buying your detective agency – they’re going to want to look at your books to determine what your business is worth!

If you’ve been cooking the books and pretending like you’re making 10% less or 50% less (or whatever less) than you actually are – then you’re not going to be able to sell your business for the same amount of money as if you’d been reporting the correct, actual higher amount!

So a potential buyer is going to come in and look at your Profit and Loss Statements. They will look directly at your tax returns as primary documents to say, “What is this guy really billing out? What is he really bringing in? What profit is he actually making?”

It’s tough enough to sell a detective agency. It’s very easy to work for years and then to realize you just don’t have anything to sell. You haven’t really established a business so much as you’ve created a job for yourself. And that’s a rough moment to come upon. Believe me, I’ve been there.

But keeping accurate records and paying what you need to pay in taxes will benefit you when it comes a time to sell the business.

Or – and I’m not a big believer in this – if you ever need to take out a loan and you’ve been under reporting your income for years, the lender is going to look and say, “You don’t make enough money for this!”

Accurate bookkeeping really is to your benefit!

By the way, if you see the value of what I’m sharing with you here, then don’t miss my special report titled… If You Want To be a Private Investigator Give Up… Unless You Do These Three Things. You can get it on the home page of my blog.
Committed to your success as a private investigator and business person,
Larry Kaye, P.I.

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