IRS says to report stolen property as income, unless you return it the same year

https://fox4kc.com/news/irs-says-to-report-stolen-property-as-income-unless-you-return-it-the-same-year/

Lots of criminal minded people working in the IRS.

Gee, I wonder if all those people doing the smash and grab thefts pay income taxes? I wonder if they turn in their return on time? Are they getting the child credit every month from the federal government?

Inquiring minds want to know.

It's like the same guys who make gun laws made IRS code also.

SNIP

The day ain’t over yet
 

Gee, I wonder if all those people doing the smash and grab thefts pay income taxes? I wonder if they turn in their return on time? Are they getting the child credit every month from the federal government?

Inquiring minds want to know.

Maybe some masterful genius at play here. They’ll never think of it, right?

The day ain’t over yet
 
Maybe some masterful genius at play here. They’ll never think of it, right?

And when they commit purjury by not claiming, now federal charge for stealing. 1 can only hope.

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I once read that failing to file a tax return if required is a misdemeanor.  But, intentionally lying on a filed return is a felony.

Most lawyers will tell you to file the return, report the income, and hope the IRS doesn't figure out the proceeds are from criminal activity.

Even though the IRS doesn't receive a 1099 from most sources of illegal income, they can be alerted to ongoing criminal activity that creates wealth if you have a $50K/yr job, yet live in a $2M mansion, drive 2-3 expensive cars/SUVs, and are generally living well above your means.

There is also the "weird" case where a man was tried for securities fraud.  The Supreme Court was petitioned to hear whether or not he could deduct the cost of his lawyers to fight the case in court as a business expense.  They ruled unanimously that, since the IRS Code did not state he was not allowed to deduct it, his lawyers were deemed a reasonable cost of doing business.  The $22,964.20 in legal fees were deducted from his taxable income.  That was a lot of money in 1966!

Since then, Congress passed laws prohibiting specific "costs of doing business" from being used as tax deductions in illegal transactions, such as:

-- Illegal bribes (as opposed to LEGAL bribes?  )
-- illegal Kickbacks
-- Fines and Penalties
-- Expenses for Illegal Drug Sales

In 1927, the Supreme Court ruled that the 5th Amendment protection against self incrimination doesn't shield anyone from reporting ALL income from ANY source to the IRS.  That defendant didn't file at all that year.  The court said, had he filed and raised the objection to disclose his income under the 5th amendment with his filed forms, he would have had a viable argument.  By not filing, he can't come back after being caught and claim 5th Amendment protection for not providing the information at the time he should have filed his return.

I guess it's like, if you get arrested, you have to explicitly state at the time of questioning that you are invoking your 5th Amendment right to not answer questions.  If you don't, then remaining silent can be prosecuted as hindering the investigation or obstruction.

The tax laws are a joke.  Most of the IRS agents don't even understand them.  Call them 3 times, ask the same question of 3 different customer service reps, and you're going to get 2 or 3 different answers.  Trust me.  I've been there. 

This is why they always recommend you get an attorney to deal with the IRS.  Trying to do it yourself is like playing "Pin the Tail on the IRS regulation."  It's a moving target.  If you aren't 100% certain of what the law/code actually says, intends and requires, don't trust the IRS to tell you!

I once read that failing to file a tax return if required is a misdemeanor.  But, intentionally lying on a filed return is a felony.

Most lawyers will tell you to file the return, report the income, and hope the IRS doesn't figure out the proceeds are from criminal activity.

Even though the IRS doesn't receive a 1099 from most sources of illegal income, they can be alerted to ongoing criminal activity that creates wealth if you have a $50K/yr job, yet live in a $2M mansion, drive 2-3 expensive cars/SUVs, and are generally living well above your means.

There is also the "weird" case where a man was tried for securities fraud.  The Supreme Court was petitioned to hear whether or not he could deduct the cost of his lawyers to fight the case in court as a business expense.  They ruled unanimously that, since the IRS Code did not state he was not allowed to deduct it, his lawyers were deemed a reasonable cost of doing business.  The $22,964.20 in legal fees were deducted from his taxable income.  That was a lot of money in 1966!

Since then, Congress passed laws prohibiting specific "costs of doing business" from being used as tax deductions in illegal transactions, such as:

-- Illegal bribes (as opposed to LEGAL bribes?  )
-- illegal Kickbacks
-- Fines and Penalties
-- Expenses for Illegal Drug Sales

In 1927, the Supreme Court ruled that the 5th Amendment protection against self incrimination doesn't shield anyone from reporting ALL income from ANY source to the IRS.  That defendant didn't file at all that year.  The court said, had he filed and raised the objection to disclose his income under the 5th amendment with his filed forms, he would have had a viable argument.  By not filing, he can't come back after being caught and claim 5th Amendment protection for not providing the information at the time he should have filed his return.

I guess it's like, if you get arrested, you have to explicitly state at the time of questioning that you are invoking your 5th Amendment right to not answer questions.  If you don't, then remaining silent can be prosecuted as hindering the investigation or obstruction.

The tax laws are a joke.  Most of the IRS agents don't even understand them.  Call them 3 times, ask the same question of 3 different customer service reps, and you're going to get 2 or 3 different answers.  Trust me.  I've been there. 

This is why they always recommend you get an attorney to deal with the IRS.  Trying to do it yourself is like playing "Pin the Tail on the IRS regulation."  It's a moving target.  If you aren't 100% certain of what the law/code actually says, intends and requires, don't trust the IRS to tell you!

That was a lot of information! Thanks!

I have made 2 mistakes with my returns in the past.

The first one was early in my career. I had only one W2 and my wife had only one W2. I had a very easy 1040EZ for to fill out as I had no deductions (Other than personal) and I was getting a lot (for me) back as I overpaid my taxes. I mailed it off and 6-8 weeks later I received a letter from the IRS that I owed a shit ton of money. They claimed that there were no W2’s included with my return. I remember putting them in with the return. Oh well, all I had to do was to send the extra copies of my W2’s and I was fine. The interesting thing about this was that without the W2’s they accepted the amount I said I made without question. But they did not accept the amount of taxes my employer took out of my pay for the year. So in essence they said I had the right amount of income but had no taxes taken out so I owed the amount that had already been taken out. My question is that my employer paid the IRS all the taxes that were taken out of my check. Don’t they have a record of it?

The other mistake I made last year and did so due to old age/forgetfulness. Now that I am retired I figured I would start my taxes right after the first of the year. There is a new section asking if I had received my stimulus check yet. I checked no because it was true at that time. But my tax returns are huge and last year was no different. The IRS decided not to finalize one of the forms I use until after March 1. I could not send my taxes in until I got the finalized version of that one VERY simple form. I completed my taxes and sent in my return. Low and behold my return was held up for a couple of months with no explanation except that COVID was causing returns to be processed very slowly. I finally got a letter from the IRS. They told me since I got my stimulus check I couldn’t also attempt to get a credit for the same stimulus check I already received. As it turns out between the time I started my return when I had not received the stimulus check and when I mailed it, I did receive the stimulus check. But I had forgotten that I checked the box that said no I had not received my check. It was an innocent mistake but it made my refund a lot smaller than I thought I was getting and it took several months to get it finally.

My taxes are quite complicated every year. I have had tax accounts do them for me in the past and it cost me $1,200-$1,600 to have them done. That takes a huge chunk out of my refund. So once Turbo Tax became mature enough to handle my returns I have been using it ever since. Even though it takes me literally 2 whole days to sort all of my documents into categories and then add everything up and total it all out and then input it into TT it is worth it for me to save that money given to an accountant.

Inspector:

I worked for a popular hamburger and deli shop next to my college campus.  The owner was unable to continue running it, and he sold to a guy that had no business running a business.

Within 3 months, our paychecks were bouncing!   

Come to find out, he hadn't been making his quarterly tax payments, including our employee withholdings.  Nothing happened to us via the IRS -- we earned little to start with.  But he had to pay all the banking and bad check fees we were charged after writing checks on our paychecks.  It took a few days for the deposits to bounce, causing our rent and utility checks to also bounce.

The place was closed down just 2 days before we heard the owner's Porsche was recovered from the wet end of a pier in the ocean off the coast of NC.     I guess he was going to pocket the insurance money after reporting it stolen.

So, it's possible your employer withheld the payroll taxes, but the IRS never got it.  It happens quite often when businesses get behind in their finances.

Inspector:

I worked for a popular hamburger and deli shop next to my college campus.  The owner was unable to continue running it, and he sold to a guy that had no business running a business.

Within 3 months, our paychecks were bouncing!   

Come to find out, he hadn't been making his quarterly tax payments, including our employee withholdings.  Nothing happened to us via the IRS -- we earned little to start with.  But he had to pay all the banking and bad check fees we were charged after writing checks on our paychecks.  It took a few days for the deposits to bounce, causing our rent and utility checks to also bounce.

The place was closed down just 2 days before we heard the owner's Porsche was recovered from the wet end of a pier in the ocean off the coast of NC.     I guess he was going to pocket the insurance money after reporting it stolen.

So, it's possible your employer withheld the payroll taxes, but the IRS never got it.  It happens quite often when businesses get behind in their finances.

Flapp,

I understand what you are saying. But this was not the case in my circumstance. My employer had paid all of my paycheck deductions to the government. Hence my question why the IRS believed me when I reported my income but would not believe my reporting of the taxes that were taken out of my paycheck and paid to them. I know employers have to report my income to the IRS. And I know that they have to pay the paycheck deductions to the IRS. I just have never understood why the IRS believed my stated income but not my stated deductions.

It really doesn’t matter since this happened probably 35-40 years ago and it was cleared up by sending copies of the W2.

Unless some idiot actually reports it, then it actually caught a criminal 

Gotta be a pretty dumb criminal though

Unless some idiot actually reports it, then it actually caught a criminal 

Gotta be a pretty dumb criminal though

Actually, the funniest part is that the IRS actually thinks CRIMINALS are going to follow TAX LAWS.

 

A New York Sheriff took this IRS announcement a step further....