UNDER THE TABLE: When Indifferent Moneychangers Skirt Tax Laws...

By JOSHUA COFFMAN
Special to The Tribune

BROWNSVILLE, TX - It is the National Sport of Brownsville: Americans abusing the federal and state tax laws at will. A guy walks up to an auto mechanic shop and asks about a wheel alignment. "Hundred bucks," he is told initially. The customer takes a short walk outfront, ponders things and returns. "Hey, man, can you do this, ah, on your on, ah, time?" he asks, winking.

The deal is consummated with a handshake and the customer unfolds his wallet to hand-over two twenties and a ten: $50. No invoice, no sales taxes. Nothing for the state or federal government. It is known around here as an "under-the-table" transaction, and it is against the law. It happens daily, on things from purchases to services. It can happen pretty much everywhere, but suddenly it is a problem for those using the Internet to conduct business.

The Internet is one of thjose peculiarly American money outlets where everything happens and everything is availed. The online fleamarket Ebay is huge. You don't pay state sales tax for Ebay, but you have to report whatever income you make when selling anything, be it a lawnmower or a motorcycle or an early Beatles album or a pair of huaraches.

This, too, applies to advertising. Should you be in the business of availing space on a website - Blogs included - you must adhere to tax laws. Taking money for Ads and not reporting the income is a violation of federal law. For the person advertising on any website, it is important that Tax ID numbers be obtained so that proof can be tendered if questions arise when filing, say, political campaign expense reports.

That is the law of the land, and as much as some wish to "Go Mexico" on certain occasions when the laws hit home, well, there is a price to pay. For the website operator, that crunch time comes April 16, when income must be reported to the federal government - all income. To not do it is called tax evasion. For advertisers wishing to deduct the expense of doing business (politicians, too), well, they must present a corresponding Tax ID number provided to them by the business or website owner.

It is not a difficult path to follow. You call the corresponding state agency and request the Tax ID number, provide certain information, and you're off and running. It does mean, however, that you agree to pay the quarterly taxes and that you comply with federal income tax law.

No biggie there. 

Yet, it happens. And for a small town like Brownsville, where every dollar generated from taxes is needed, the loss of even the smallest amount is criminal. This generous capitalistic country avails you a playing field. Business-minded people should want to water the green grass every now and then. Yet, in the Rio Grande Valley, the "under-the-table" practice is as hallowed as employing undocumented maids and gardeners.

To blame it on the culture or the border or Mexico doesn't make it right.

Think about it next time you buy a dog from some side-of-the road vendor...

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