Customer deposits large amount of cash into his personal checking account, which he then in turns cuts a check to the local taxing authority for back taxes, which the only reason he is paying them is so they will not suspend his liquor license.

Branch states that he says the source of the cash is his personal stash at home, (which is basically skimmed off his bar reciepts).

SARable events, or overreaching?

Hmmm...
My thoughts are:
How much cash are we talking about?
Are his usual cash deposits too low for his business?
Do you have similar businesses to compare to?
Why isn't he paying the taxes out of his business account?

And to play devil's advocate:

It is not illegal or unusual these days, to keep cash at home.
You don't know that he has not documented any cash out that he may have taken, as a legal distribution.

(I know, - probably not likely..)

Having the same thoughts as well... hence why I am concerned I may be overreaching by filing a SAR, but at the same time having worked in food/bev, and based on other conversations with like customers, being a heavy cash business...

Yes, I would file.
Reason: Unknown source of cash.

I would not file on these facts. Seems to be speculation about the skimming and its not illegal to have lots of cash. File a CTR if the deposit exceeded 10K.

I also would file.
In addition to unknown source of funds, unusual activity for his account.