The IRS wants to tax your illegal income

[dalebert]

Are you paying attention agorists? 

http://money.cnn.com/2013/02/28/news/economy/illegal-income-tax/

Dealt some drugs? Stole some cash? There's a line on your income tax form to declare it.

As ridiculous as it sounds, the federal government requires that money acquired through illegal means be reported and taxed just like legitimate income. It's right there on the official IRS tax instructions: "Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity."

Not surprisingly, tax experts say few criminals declare their loot.

Sarcasm noted!

[Russell Kanning]

maybe it is for government workers

I like the self employment line ..... I guess you could be an illegal employee doing illegal activities ...
do they have to pay ss and medicare on that?

is it earned or unearned income?

do you put down your gross receipts then all your expenses?

[jerry]

maybe it is for government workers

I like the self employment line ..... I guess you could be an illegal employee doing illegal activities ...
do they have to pay ss and medicare on that?

is it earned or unearned income?

do you put down your gross receipts then all your expenses?

While embezzlers, thieves, and the like are forced to report their ill-gotten gains as income for tax purposes, they may also take deductions for costs relating to criminal activity. For example, in Commissioner v. Tellier, a taxpayer was found guilty of engaging in business activities that violated the Securities Act of 1933.[8] The taxpayer subsequently tried to deduct from his gross income the legal fees he spent while defending himself.[9] The U.S. Supreme Court held that the taxpayer was allowed to deduct the legal fees from his gross income because they meet the requirements of §162(a),[10] which allows the taxpayer to deduct all the "ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business."[11] The Court reasoned (and the Internal Revenue Service did not contest the point) that it was ordinary and necessary for a person engaged in a business to expect to have legal fees associated with that business, even though such things may only happen once in a lifetime.[12] Therefore, the taxpayer in Tellier was allowed to deduct his legal fees from his gross income, even though he incurred the fees because of his crime. The U.S. Supreme Court in Tellier reiterated that the purpose of the tax code was to tax net income, not punish unlawful behavior.[13] The Court suggested that if this was not the case, Congress would change the tax code to include special tax rules for illegal conduct.[14]

Internal Revenue Code section 280E specifically denies a deduction or credit for any expense in a business consisting of trafficking in illegal drugs "prohibited by Federal law or the law of any State in which such trade or business is conducted."[17]

Similarly, no business deduction is allowed "for any payment made, directly or indirectly, to an official or employee of any government [ . . . ] if the payment constitutes an illegal bribe or kickback

So.... white collar criminals can take deductions, but drug dealers cannot.

[Free libertarian]

Some collars are more equal than others -  George Oh well

[Tom Sawyer]

United States v. Sullivan
274 U.S. 259 (1927)

Supreme Court ruled that the 5th amendment doesn't protect you from self-incrimination filling out tax forms.

They sure will do some convoluted twists in logic to defend the indefensible tax code.

Looks like the next big challenge is in regard to the medical marijuana industry in the states that allow it, but the IRS code does  not recognize.

[Russell Kanning]

very funny Jerry

it is strange as the country splits over the medical and otherwise legal mj
it is discussed all over the place when we drive .... usually in a very funny way

I wonder if Colorado might get better and better.

[KBCraig]

It's how they got Al Capone, after all.

[Russell Kanning]

also why Graffy will always be safe.

[Free libertarian]

also why Graffy will always be safe.

Graffy the Peaceful Plesiosaur is my homeboy.   He's in an undisclosed location....for now. 

[Tom Sawyer]

At the critical moment in the clash between good and evil, Solar Bob was heard to exclaim, "Release the Peaceful Plesiosaur!"

[Free libertarian]

At the critical moment in the clash between good and evil, Solar Bob was heard to exclaim, "Release the Peaceful Plesiosaur!"

[blackie]

I wonder if Colorado might get better and better.

I hope so. Retail weed is way overpriced.

http://www.ibtimes.com/marijuana-costs-us-how-black-market-retail-medical-pot-prices-compare-1622362

[Russell Kanning]

funny ... I guess a lot of guys are paying retail

[dalebert]

That gigantic Colorado joint clearly has considerably more weed than the tiny street and medical joints combined.

[blackie]

Each joint has the same amount of weed. The retail one is so big because it is filled with taxes. Taxes cause cancer, so I suggest people stay away from retail weed.