What attracts scrutiny?
Cash-heavy businesses (restaurants, salons, contractors, convenience stores) show higher underreporting risk.
Examiners reconcile POS → bank deposits → books → tax return and flag gaps.
Typical red flags
- Large cash deposits without matching Z-reports
- Excessive voids/discounts; missing daily closeouts
- Margins far from industry norms
- Missing/late Form 8300 for cash payments >$10,000 (includes certain money orders/cashier’s checks)
Controls that work
- Daily Z-report with manager approval; locked user permissions
- Cash log per drawer (open/paid-ins/outs/drops/close) with dual sign-off
- Consistent daily deposits; no commingling
- 8300 workflow and staff training (15-day deadline)
- Monthly tie-outs: POS → bank → general ledger
Wave Tax Installs cash controls, provides 8300 templates, performs monthly reconciliations, and prepares audit-ready workpapers.
Schedule a Cash Controls Checkup with Wave Tax (virtual or in-person).
Educational only; not tax advice.