The taxpayer is 64 years old and is a general contractor.  he is winding down his business. He is a sole proprietor. His 2022 net income was $125,000. His 2023 net income was $125,000. His 2024 net income is $0. His 2024 P&L shows huge increase in payments to subs and for supplies.   He expects that his 2025 net income will be 0. He never looks at his profit and loss statement prepared by the bookkeeper*. He reviews his bank statements and cash balance and makes a determination about his company profitability based on trends in his bank account balance. In 2024 he had three home remodeling job where his customer underpaid him $35,000, $20,000 and $5,000.00 respectively.

Is he hiding income or adding fictitious deductions? is he just a business manager lacking the financial skills to understand business finances? Or both? Or something else?

I find this tax return interesting as it reveals the extent or lack of his financial acumen. I find that the value I add for him is "keeping him out of the IRS targets", which is valuable but not the skill that excites me.

*The bookkeeper charges about $600 per month. She doesn't input any activity and doesn't use classes for the various jobs. She uses bank feeds and assigns expenses to the entries. As of today, she has not worked on his P&L for 2025.