The tax evasion of "the shop around the corner" ( I )

https://www.nytimes.com/2016/06/16/business/smallbusiness/why-the-irs-fails-to-crack-the-small-business-tax-nut.html





Where is the multi-personal
organization that also limits
the owner's evasive possibilities?

The compliance pattern of small businesses is not a problem of "honesty" (1), but a problem of  "administrative function's efficiency".
When revenue services are not replaced by the organization of large firms (i.e. by withholding taxes, information reporting et similia )(2), they have no choice but to directly reach taxpayers (with steady on-site checks, taking the responsibility of determining the real income).

This implies  a certain "territorial control" by the IRS and the end of an audit policy politically oriented (3).




"Big firm or Bigfoot, that is
the question".

With regard to the "rich", we should not mistake large firms for their owners. A large firm is not "Bigfoot" (≈anthropomorphism). Firms are complex multi-personal organizations, that per se guarantee an enormous amount of income (again: withholding taxes / information reporting). The real problem emerges when the owners of a large firm manage to override their own firm's organization: that's brutal tax evasion (4).       

Anyway, the tax evasion of small businesses will probably be an increasing issue in Western countries, due to: a. the rarefaction of large manufacturing firms (for intuitive reasons); b. the entrepreneurial model imported by immigrants. Stay tuned.
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(1) although  encouraging the feeling of a moral obligation certainly boosts the "tax fidelity".
(2) although to a different extent, we are talking about cases in which firms are"collectors on behalf of the revenue service"(according to the expression of L. Einaudi).
(3) every taxpayer is also a possible voter, while a large firm can pay millions and doesn't vote (G. Colm).
(4) there are different phenomena when the IRS: 1. questions the  costs's existence (evasion "inside the books") 2. reinterprets a declared income ( the very opposite of an "under the counter" evasion)