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Please show the proof that he paid his employees in cash and that he kept no books? The only place I've ever heard that is from the Smart haters. The fact that he knew Richards address shows that he was keeping books.

Partial transcript of Ed Smart's 7/10 press conference:

I...I paid him...uh, you know...with the car...we had a contract on the car...and he was supposed to work...you know to help pay that off...which he did...and I did pay him...you know...some cash...I can't remember if I paid him check or not...I've had no(?) over the course of building my home I've had...you know...temporary work that I've picked up for the day and...you know...I've paid them cash. Sometimes...sometimes there's a problem where they don't have IDs...they can't cash checks so...you know...that's basically... .

What if he did pay them in cash? Does it necessarily follow that he kept no books?

The part about their not having good ID's rings true according to my experience. Guys that do that sort of work often don't have good enough ID's to cash checks. Plus if you pay them after banking hours (at the end of their work day) they can't stand to wait till the next day and have to go to the bank and stand in line and cash the check. They need money NOW. These guys need everything NOW. Example: They need a beer NOW--and they're chronically short of cash, and they're getting off work and want to relax.

Haven't you ever been near a convenience store on a Friday afternoon and seen sub-contractor-looking guys with trucks full of more guys being taken home, with equipment in the back? They're all in line getting 12-packs of beer. They crack a beer as soon as they get in the truck, and pass the stuff around. Or is your neigborhood too ritzy for that sort of people to be in it?

MY PAINTER INSISTED ON CASH WHEN I WOULD GIVE HIM SMALL ADVANCES. He did this, I found out, b/c his driver's license was expired and he had a warrant open, so he was afraid to go renew his driver's license for fear of being picked up on the (misdemeanor) warrant. Expired ID=bank won't cash checks for you.

WHEN I'D GIVE HIM CASH, I ALWAYS MADE HIM SIGN A RECEIPT. I have a written record of every cent I paid him, even the cash part. This is called "keeping records."

Ed was clearly doing the bit of fixing up a house while living in it (to avoid capital gains questions when it was sold), and he'd want to keep records of his expenses so he could figure out after he sold the house, what his real money from the sale was. If he makes income(speaking of it as the tax collectors would) on the sale of the house, he's going to want to reduce it on paper at least, as much as possible, by deducting out what he put into the house.