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  1. #1
    Join Date
    Jan 2013
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    5

    Default Flipping Cars and Criminal Tax Evasion

    My question involves criminal law for the state of: California DMV

    I have a friend who flip cars and make 20k cash a year on the side. I envy him and he is nice enough to teach me how - What cars to look for etc. However, I was concern that he is tax evading. Here's why:

    He buys a car for $3,000. He fills out the pink-slip to his name as the buyer. He never goes to DMV. he then fills out a form (duplicate / paperless title) that states he's now the owner (which is true - he bought the car) He sells it to a buyer for $4,000, who takes the pinkslip and forms to DMV and successfully transfer ownership.

    What I am concerned about is he never paid tax. I called DMV and confirmed that the process he took is legit. However, they said a person is only allowed to sell one car a year. But i know of normal people that sells more than one.. My friend sells 20.

    I would like to do the same if legal.

    Thank you all.

  2. #2
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: DMV Fraud or Legal

    Your friend is breaking the law. The state will look the other way on a casual buyer, but if you do multiple ones like he is, he risks problems. It's called title jumping. First this assumes the people he is buying form are complete idiots. No sane person would only issue a bill of sale without also submitting a notice of transfer to make sure they aren't held responsible for parking tickets, etc... that the buyer incurs. It also presumes the buyer is stupid enough to play these games. The moment he screws this up and the buyer has issues getting their title/registration, the wheels will also come off this.

  3. #3
    Join Date
    Jan 2013
    Posts
    5

    Default Re: DMV Fraud or Legal

    I thought he was title jumping too but DMV personnels told him to do that. Is DMV workers' ignorance assisting him in breaking the law? I find it ironic. I'm not too worried about him selling lemons. He is a mechanic and don't deal with salvage cars like most of those "curb stoners." I suppose the law haven't caught on to him due to lack of resources?

    It seems the only way is for me to get a dealers license but it won't be worth it for me. I'll try something else for side money.

  4. #4
    Join Date
    Sep 2005
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    98,846

    Default Re: DMV Fraud or Legal

    Quote Quoting Extron
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    I thought he was title jumping too but DMV personnels told him to do that.
    You and your buddy went into the DMV together and multiple workers told you to illegally transfer titles for the unlicensed used car dealership? Or is this what your buddy is telling you, and you're choosing not to turn on your brain?

  5. #5
    Join Date
    Jan 2013
    Posts
    5

    Default Re: DMV Fraud or Legal

    Quote Quoting Mr. Knowitall
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    You and your buddy went into the DMV together and multiple workers told you to illegally transfer titles for the unlicensed used car dealership? Or is this what your buddy is telling you, and you're choosing not to turn on your brain?
    He told me. I just called now and they told me the exact same thing? I guess it has become common practice. It's not title jumping when he fills paperwork to be the registered owner. All his information is on the paperless title so how exactly is that title jumping? Maybe there's another term for that? OR maybe it's a gray area?

    I'm not going to argue. I FEEL like it may not be legal but is there any written law on this? There is a lot of hearsay when it comes to this stuff.

    I'm not going to do it. I may just rely some information to him.

    Thanks

  6. #6
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: DMV Fraud or Legal

    No, the DMV did not tell you that you should illegally evade taxes as part of an unlicensed car dealership. If you're going to waste our time with nonsense like that, I have better things to do.

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