McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 8

Duff is really interested in decreasing his tax liability, and by his very nature he is somewhat aggressive.A friend of a friend told him that cash transactions are more difficult for the IRS to identify and, thus, tax.Duff is contemplating using this "strategy" of not reporting cash collected in his business to minimize his tax liability.Is this tax planning? What are the risks with this strategy?