It starts...Fisherman who intend to file claims against BP for the oil spill in the Gulf of Mexico are facing serious tax peril. This isn't because they shouldn't file claims against BP- which has an established $20 billion escrow account to handle legitimate claims- it's about tax evasion, which is rampant among fishermen in the area.
The problem is that many are paid in cash, and many didn't know they had to file their earnings.
"Many Vietnamese and Cambodian fisherman live on their boats and don't speak much English," said Jerrold Parker, New York Attorney and former IRS Agent at Harris Martin Publishing's Oil Spill Litigation Conference "They pay for their supplies in cash, for their bait in cash and their gas in cash."
Fishermen have already run into issues when BP requested their tax statements. Luckily, there are ways for fisherman to prove their income without their tax returns with receipts and invoices from transactions. However, doing this can invite an IRS auditor to follow their trail to nail them for tax evasion. So what's the best option to take?
Coming Forward... Come clean to the IRS. If you're unprepared use a tax professional like a tax resolution company, an accountant, or a CPA, but whatever you do, it's time to come clean to the IRS.
If you haven't filed before, it's time to start filing your taxes and get caught up. You can do this on your own, but it's not easy without help form a professional. Hopefully the back taxes, interest, and penalties won't be more than the BP claim!