The Laundromat Industry
IRS Audit Techniques Guide
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The water consumption analysis based on water usage is a common sense approach to estimate revenue of a laundromat. In addition, specialists in the laundromat industry use the water consumption ideology to verify claims of gross receipts by laundry owners attempting to sell their businesses. Remember, water is a consumable product that goes somewhere, either to produce income or for other uses which we call waste. Articles in trade publications, letters from tax preparers, and other comments by practitioners have been critical of the analysis. None, however, have questioned the basic approach....
The water consumption analysis based on water usage is a common sense approach to estimate revenue of a laundromat. In addition, specialists in the laundromat industry use the water consumption ideology to verify claims of gross receipts by laundry owners attempting to sell their businesses. Remember, water is a consumable product that goes somewhere, either to produce income or for other uses which we call waste. Articles in trade publications, letters from tax preparers, and other comments by practitioners have been critical of the analysis. None, however, have questioned the basic approach. They have questioned such things as water waste and gallons of water per wash load. It is critical to realize that the consumption analysis is no cure-all. You cannot simply use it and ignore the books and records of the taxpayer, interview questions regarding income and other areas of a quality examination.
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