Fee for Discontinuance

David Megginson said:
Not all, but many owner-pilots work professions where we earn $100–250+/hour, not just a few times/week doing a checkride, but every day, day after day. Coming from us collectively, accusing DPEs of "printing money" for giving a few checkrides every week can sound a bit narcissistic.
Click to expand...
Are you hiring?

David Megginson said:
And you guys pay a lot! A typical checkride for me is <CA $300 in the Ottawa area in my own plane. The DPEs earn it, of course, but is US $700/ride (almost CA $1,000/ride) the average in the US, or is someone citing the highest fee they've heard of?
Click to expand...
I paid $750 checkride fee + a $250 travel fee for my CP-ASES ride.
 
TommyG said:
And lets remember $700/hr cash is like $1000 on the books.
Click to expand...

I've never understood where this attitude that "cash must equal tax fraud" comes from. Are there DPEs that are underreporting their income? Possibly. But man, this is a job where literally every day of work for the DPE is documented multiple times by a government agency. Every checkride the DPE does they have to first get approval from the FSDO to conduct, they then fill out some online paperwork to start the checkride, they then fill out and sign online paperwork saying they completed the checkride. I mean, it's pretty thoroughly tracked. It would be ridiculously easy to spot fraud with even a new IRS recruit doing a simple investigation. So I'll bet most DPEs are pretty honest about this type of thing. The whole reason for it being a cash business is simply one of protecting the DPE.
 
RussR said:
I've never understood where this attitude that "cash must equal tax fraud" comes from. Are there DPEs that are underreporting their income? Possibly. But man, this is a job where literally every day of work for the DPE is documented multiple times by a government agency. Every checkride the DPE does they have to first get approval from the FSDO to conduct, they then fill out some online paperwork to start the checkride, they then fill out and sign online paperwork saying they completed the checkride. I mean, it's pretty thoroughly tracked. It would be ridiculously easy to spot fraud with even a new IRS recruit doing a simple investigation. So I'll bet most DPEs are pretty honest about this type of thing. The whole reason for it being a cash business is simply one of protecting the DPE.[/QUOTE
Click to expand...

Why is there always a though of cash equals tax fraud, because when you know people in a cash business, majority of them aren't 100% honest.
 
TommyG said:
Not sure where you come up with 5 hours per ride. Average PPL is from showing up to finish is 2 1/2 to 3, some longer some shorter. Around here the DPEs live wihin a 20 minute drive to the airport. There is not much to before or after the ride. If they are already at the airport, 1 ride at 8 Am, one at 12, one at 1600. And lets remember $700/hr cash is like $1000 on the books.

So lets give your 2.5 rides per day @ $700 a ride = $1750 and only 3 days a week to work factoring weather = $5250 X 45 Weeks (Some vacation time in there) = 236,250. All Cash!!! Now whether they claim 100% of it at tax time or not is between them and the IRS.

But like you said locality is a factor. Florida, Arizona, you know these guys are killing it, Up here in NY those number of rides are fairly accurate. I know all the DPEs around here, so I know exactly what the job entails and how much they put in before and after a checkride.

So not sure how many flying jobs are better paying for less work, you don't get much easier than that.
Click to expand...

Sorry, I started typing my message and abandoned it. I responded to another message and inadvertently sent it.

Less than three hours from start to finish is a bit questionable if the examiner is truly following the ACS. I could buy 4 hours, but that's still 12 hour day.

Either way, sitting through a practical test as an examiner isn't exactly a stress-free. It's a decent gig for sure, but considering it requires a fair amount of experience, there are plenty of other flying jobs that pay the same and involve less stress. As far as the insinuation that somehow it is tax-free, an examiner would be quite foolish to try to hide income as the audit trail is quite accessible with even a modicum of effort.
 
RussR said:
I've never understood where this attitude that "cash must equal tax fraud" comes from.
Click to expand...

Yeah same here. I've had students try to get me to lower my rate if they pay me cash. I'm a CFI not a money launderer, and I f---ng hate cash. I feel like the next person that asks should get charged extra.
 
TommyG said:
Why is there always a though of cash equals tax fraud, because when you know people in a cash business, majority of them aren't 100% honest.
Click to expand...
Yeah, but the increased overhead involved in buying off IRS auditors probably makes up the difference for a DPE.
 
RussR said:
I've never understood where this attitude that "cash must equal tax fraud" comes from.
Click to expand...
Well I can't speak for the general population, but I can tell you why I personally tend to make that assumption. I've known my fair share of individuals who worked in cash-heavy or cash-only occupations. Of those I've known, the number who reported their income accurately to the IRS was more or less none. Perhaps most DPE's are an exception to that rule. Would be nice if they were. But the exception and rule are the exception and the rule for a reason.
 
MauleSkinner said:
Yeah, but the increased overhead involved in buying off IRS auditors probably makes up the difference for a DPE.
Click to expand...

yeah because the IRS is out doing a lot of audits. How many people do you know are 100% honest on their tax returns with money earned on the books and how many deductions they make up. I would go on the majority of people fluff their returns.

IRS are gov workers, they aren’t auditing unless they have too.
 
TommyG said:
yeah because the IRS is out doing a lot of audits. How many people do you know are 100% honest on their tax returns with money earned on the books and how many deductions they make up. I would go on the majority of people fluff their returns.

IRS are gov workers, they aren’t auditing unless they have too.
Click to expand...
You’re obviously not in a position that gets your taxes audited regularly.
 
Juliet Hotel said:
Well I can't speak for the general population, but I can tell you why I personally tend to make that assumption. I've known my fair share of individuals who worked in cash-heavy or cash-only occupations. Of those I've known, the number who reported their income accurately to the IRS was more or less none. Perhaps most DPE's are an exception to that rule. Would be nice if they were. But the exception and rule are the exception and the rule for a reason.
Click to expand...

I have to think that there's a difference between a cash-only lawn service or dog walker and a cash-only DPE, at least from the standpoint of paperwork trails.
 
MauleSkinner said:
Apparently you don’t know the right people. ;)
Click to expand...

IRS is like everyone else, they're looking for the low hanging fruit. If you make big money that disappears without a trace or if you spend big money that appears from outer space they might want to talk to you. When they have time they will get the little fish in the pond.
 
Daleandee said:
IRS is like everyone else, they're looking for the low hanging fruit. If you make big money that disappears without a trace or if you spend big money that appears from outer space they might want to talk to you. When they have time they will get the little fish in the pond.
Click to expand...
My guess is they audit whomever the software tells them to, and a significant cash-only business is probably randomly selected more often than most other entities.
 
MauleSkinner said:
My guess is they audit whomever the software tells them to, and a significant cash-only business is probably randomly selected more often than most other entities.
Click to expand...

I'm guessing you're correct!
 
RussR said:
I have to think that there's a difference between a cash-only lawn service or dog walker and a cash-only DPE, at least from the standpoint of paperwork trails.
Click to expand...
I suspect you're correct. But I didn't mention lawn services or dog walkers. More than one cash-only person I've known worked in a business that produced at least some amount of paper trail. But like most cash-only people I've known, they only reported a fraction of what they actually made.
 
MauleSkinner said:
My guess is they audit whomever the software tells them to, and a significant cash-only business is probably randomly selected more often than most other entities.
Click to expand...
I used to work in a significant cash business where almost everyone was an "independent contractor." People were getting audited all the time. Everyone I knew who was audited fell into once of two categories: Those who kept meticulous records and those who wrote big checks to the IRS.
 
TommyG said:
So lets give your 2.5 rides per day @ $700 a ride = $1750 and only 3 days a week to work factoring weather = $5250 X 45 Weeks (Some vacation time in there) = 236,250. All Cash!!! Now whether they claim 100% of it at tax time or not is between them and the IRS.
Click to expand...
If this fits your definition of "printing money," then I'm sorry. Three 12+hr days is ~40hrs. So a full-time work week. Seven weeks of vacation would be great, but it's probably more like seven randomly interspersed weeks of unflyable weather. And $236k is good money, but it's not crazy good for a business owner. And in NY?

It's a good gig, no doubt. But even your numbers don't back up the Scrooge McDuck claims.
 
Juliet Hotel said:
I suspect you're correct. But I didn't mention lawn services or dog walkers. More than one cash-only person I've known worked in a business that produced at least some amount of paper trail. But like most cash-only people I've known, they only reported a fraction of what they actually made.
Click to expand...

I guess my point is that if every time you went to get a haircut:
- your barber had to go online the day before and get approval to cut your hair from a government agency
- before your haircut started, your barber had to log in to a government system and verify your personal information
- after the haircut was done, your barber had to log back into the government system and certify successful completion of the haircut
- you then had to log into the same system to verify the haircut was completed
- the online documents you and your barber filled out then become a part of each of your government "records"
- you printed a temporary "certificate of haircut completion" to carry around with you
- your barber could expect to have your picture taken with them shaking your hand and posted on social media
- a few months later, you received an official plastic card from the government saying you had a successful haircut

Then there'd probably be very little tax fraud in the haircutting industry. I don't know that there is necessarily, I just randomly picked an industry that probably does a lot of cash transactions.

I'd be interested in hearing if anyone has some specific example of DPEs and tax fraud. As I've said before, I don't KNOW if there's little tax fraud among DPEs, but I suspect there is very little.

(By the way, I did have a lot of fun typing this example up.)
 
Zeldman said:
Banks are starting to feel the same way. Some are charging a fee to folks and companies that bring in cash to deposit.
Click to expand...
Can a bank refuse or punish for depositing government-printed green money? I would think they would be prohibited from that...
 
JoshN said:
Can a bank refuse or punish for depositing government-printed green money? I would think they would be prohibited from that...
Click to expand...

They’re private businesses. They can choose what they accept, and can set terms for doing business with them. US currency is legal tender, but that doesn’t require anyone to accept it. It just means that if they do, it’s valid money.
 
It's interesting that nobody has mentioned the fact that a discontinuance results in occupying another persons time. You know the old saying "time is money..."
 
Zeldman said:
Banks are starting to feel the same way. Some are charging a fee to folks and companies that bring in cash to deposit.
Click to expand...

Where are these? I searched but didn't find.
ateamer said:
They’re private businesses. They can choose what they accept, and can set terms for doing business with them. US currency is legal tender, but that doesn’t require anyone to accept it. It just means that if they do, it’s valid money.
Click to expand...

But they are also federally regulated, so they can't just set ANY terms regarding currency.
 
k9medic said:
It's interesting that nobody has mentioned the fact that a discontinuance results in occupying another persons time. You know the old saying "time is money..."
Click to expand...
We’ve had this discussion so many times that it’s assumed.
 
EdFred said:
Where are these? I searched but didn't find.
Click to expand...

Ask your bank. I informed of this out about WellsFargo when opening up a business account. Maybe it is for business accounts only. Basically I was told that since we, the bank, handle your money we should be able to charge you, meaning me, to handle your money. Also it takes time for a person to count and bundle cash so we, the bank, should charge you, meaning me, for our time.

I asked if the interest they make by using my money to loan to others isn't enough to enough to support the bank then maybe I should go somewhere else. No comment from the bank.

Then again, companies like Farmers Insurance for example takes in several million dollars in cash each month, so I can see how it would take a little time for a person to handle that amount. But to charge a company for doing the work that the bank is in business for is a little much for me.
 
Zeldman said:
Ask your bank. I informed of this out about WellsFargo when opening up a business account. Maybe it is for business accounts only. Basically I was told that since we, the bank, handle your money we should be able to charge you, meaning me, to handle your money. Also it takes time for a person to count and bundle cash so we, the bank, should charge you, meaning me, for our time.

I asked if the interest they make by using my money to loan to others isn't enough to enough to support the bank then maybe I should go somewhere else. No comment from the bank.

Then again, companies like Farmers Insurance for example takes in several million dollars in cash each month, so I can see how it would take a little time for a person to handle that amount. But to charge a company for doing the work that the bank is in business for is a little much for me.
Click to expand...

No fees for cash, business or personal. Although we do very little business cash.
 
I've heard of the fees only if you discontinue because you did something wrong during the test, which means you get to log additional CFI work and then come back.

I've not heard of anyone charging fees for example if you've done your oral, the weather goes bad and you have to post pone the practical.

We have a local DPE who just started doing exams 2 years ago, but already has quite the reputation of discontinuing half of his check rides/orals. CFI's aren't sending him applicants much these days.
 
Daleandee said:
IRS is like everyone else, they're looking for the low hanging fruit. If you make big money that disappears without a trace or if you spend big money that appears from outer space they might want to talk to you. When they have time they will get the little fish in the pond.
Click to expand...
Yes and no. The IRS, bless their hearts, are about revenue generation. They've found that the big fish usually have a lot of money to hire lawyers, accountants, etc. The smaller fish don't have the resources to mount a defense, so the IRS actually was targeting the easier "catches". They found out they could get enough of them to come out ahead vs going after the larger. I for example have gotten a letter once or twice in my life - and I'm not a "big fish" by any stretch of the imagination. After spending lots of time digging, I always found it was a mistake on their part, and I've never had to pay a dollar extra, let alone what they were after.
 
WDD said:
I've heard of the fees only if you discontinue because you did something wrong during the test, which means you get to log additional CFI work and then come back.

I've not heard of anyone charging fees for example if you've done your oral, the weather goes bad and you have to post pone the practical.

We have a local DPE who just started doing exams 2 years ago, but already has quite the reputation of discontinuing half of his check rides/orals. CFI's aren't sending him applicants much these days.
Click to expand...
Needing to go back and get more instruction isn’t a discontinuance, it’s a disapproval. Entirely different animal.
 
MauleSkinner said:
Needing to go back and get more instruction isn’t a discontinuance, it’s a disapproval. Entirely different animal.
Click to expand...



§ 61.43 Practical tests: General procedures.

(e) The examiner or the applicant may discontinue a practical test at any time:

(1) When the applicant fails one or more of the areas of operation; or

(2) Due to inclement weather conditions, aircraftairworthiness, or any other safety-of-flight concern.

(f) If a practical test is discontinued, the applicant is entitled credit for those areas of operation that were passed, but only if the applicant:

(1) Passes the remainder of the practical test within the 60-day period after the date the practical test was discontinued;
 
WDD said:
§ 61.43 Practical tests: General procedures.

(e) The examiner or the applicant may discontinue a practical test at any time:

(1) When the applicant fails one or more of the areas of operation; or

(2) Due to inclement weather conditions, aircraftairworthiness, or any other safety-of-flight concern.

(f) If a practical test is discontinued, the applicant is entitled credit for those areas of operation that were passed, but only if the applicant:

(1) Passes the remainder of the practical test within the 60-day period after the date the practical test was discontinued;
Click to expand...
The checkride may be discontinued, but the paperwork the applicant goes home with is different. Only one says “Discontinuance”; the other says “Disapproval”.

but maybe that’s a distinction not made in the OP, either.
 
You must log in or register to reply here.
Back
Top