I am a small business owner. As everybody knows, we will not report all the income to the IRS. Now I want to buy a house and I need to deposit cash into my account in order for me to get a loan from the bank and put down payment for a house. If I make a deposit to my account of $80,000 (separate in small deposit as 8 times of 8000) will I have a problem with IRS? Will the IRS know that I have $80,000 in my account, and will they ask me where I got the money? Will they audit my business income?
Actually, not everyone believes that all small business owners cheat on their taxes. Some probably do, but most people are honest, even when it comes to paying taxes.
Deposits themselves are not reported to the IRS. Cash deposits over $10,000 are. Deliberately planning a group of cash deposits to attempt to avoid bank reporting of cash deposits is a federal felony called "structuring". Take a look at a pamphlet produced by the Financial Crimes Enforcement Network, an office of the Treasury Department.
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Actually, not everyone believes that all small business owners cheat on their taxes. Some probably do, but most people are honest, even when it comes to paying taxes.