Oops on the Gulf: The perils of cash businesses …

A lot of attention has been focused on the Gulf’s claims process.

Prevalent question: why does it take so long for BP to  pay claims against lost earnings ?

Should be simple, right?

Just submit your 2009 1040 tax return as substantiation of your normal year’s income.

Oops. 

Heard a commentator make a passing observation: “most of these are cash businesses – they don’t keep a lot of records”.

English translation: they don’t report all of their income for tax purposes … so if they just submit tax returns, they won’t get paid for all of their earnings.

Horns of a dilemma: substantiate all earnings and risk getting busted for tax evasion … or take less than your full earnings in a claims settlement.

I think this is called collateral damage.

Let’s see if & when the mainstream media catches onto this one …

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