Tax Crime and Punishment in the Chinese Restaurant Business
One of the first articles I ever wrote for Menuism was entitled "Why Do Some Chinese Restaurants Change Their Names So Often" . In that article, one of the reasons cited why Chinese restaurants seemingly changed their names for no reason at all was a sales tax dodging scheme. In this scam, after not reporting all of your sales, you then dissolve the corporation operating the restaurant, then open up a similar or identical restaurant at the same location, but in a new corporation and operating under a new restaurant name. Practically speaking, this reduces the period of time that the government has to catch up with you for sales tax evasion. Who knows how many Chinese restaurants stiffed the local authorities of how much sales tax over the years? No documented cases of this scheme exist, either because the restaurants got away with it, or there was no publicity involved if they were apprehended. However a longtime Chinatown CPA...