Businesses which operate mostly or exclusively in cash are pretty much guaranteed regular IRS audits, which they'll need damn good records to survive. Doing a

Businesses which operate mostly or exclusively in cash are pretty much guaranteed regular IRS audits, which they'll need damn good records to survive. Doing a significant volume of cash transactions with any financial institution also causes it to send a Suspicious Activity Report [0] to the federal government, which greatly increases your chance of being selected for an audit. It's true that you don't need records to explain your personal spending, but you will need to produce records justifying any deductions/benefits claimed, and if your lifestyle appears to be large for your reported taxable income, you'll need to account for that too. Recently the IRS has started using public social media posts indicating lavish spending against people who are only paying taxes on meagre incomes. Laundromats are actually classic tax fraud vehicles. There was an article on HN recently about how the government will pull their water/electric bills to see if the volume of business they claim their doing is in line with their actual resource usage. https://en.wikipedia.org/wiki/Suspicious_activity_report https://en.wikipedia.org/wiki/Suspicious_activity_report