Thursday, January 12, 2012

Can I avoid NY used car sales tax evasion?

I want to buy a 7,000 car from my friend, but it needs some work done to the engine to get it to run. We have already taken it to the garage and they slapped a 3,000 estimate on the repairs. This is still okay because the car is valued at 15,000 on KBB.



My question is, I would like to finance the purchase of the car AND the repairs. If I take out an auto loan for 10,000 to give to my friend and he agrees to write me a check back for the 3,000 can I still write that I purchased the car for 7,000 when going to the DMV?



My Reasoning:

If I write the full 10,000 that I financed at the DMV then I get double taxed on the 3,000 for the repairs.(once for the DMV, once at the garage)



My Fear:

If I only write 7,000 on the DMV forms, and then the Lien on the car comes back as 10,000 will they try to nail me for tax evasion?Can I avoid NY used car sales tax evasion?
Ive never seen a lien where the DMV knew how much it was for. They generally only know there is a lien, they don't know for how much.

So the crime you are attempting is not tax evasion,it is bank fraud.

Its probably best to be upfront with the lender. That way the sale price would indeed be $7k, and the bank may well write a check to the garage for the repairs.

Happens with foreclosed houses that need work a lot.

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