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IRS: Stolen property must be reported as income on taxes

155 points by xojoc 5y ago

sschueller 5y ago
Great, what we should be doing is taxing capital gain at a hire rate than physical labor. Why does anyone think it's OK to pay less on money you made with money you have? Especially when the difference can be as great as +25%.
- comeonseriously 5y ago
  > Why does anyone think it's OK to pay less on money you made with money you have? The venn diagram of people who make the rules overlaps with those who benefit.
- dmix 5y ago
  You seem to have a lot of research to do on this topic. It’d be a lengthy and at times controversial reply because it hits at a fundamental supply side vs demand side economics. That said I do fully support a far heavier taxation on capital gains if your net worth is in the hundred millionaires. We’ve been talking about taxing billionaires for as long as I’ve been alive and the solution seems so simple to me: income caps. We use income caps all the time for poor people but when talking about capital gains the arguments gets easily neutered because they get propose across the board, critically kneecapping the productive value of capital in capable hands. It’s simple, just cap it at hundreds of millions at not so unreasonable rate. And all the talk on wealth inequality will have a very strong counter argument. Instead every time we get a new tax it seems to hit everyone except the lowest sectors. Even here in Canada.
  - hnbad 5y ago
    There was a proposal in Switzerland (not sure what came off it) that essentially worked like this: * income from capital is taxed extremely highly at a progressive rate * the allowance/exempt amount is high enough to cover most investment based retirement plans * the definition of "income from capital" was left open enough to at least cover most trading and rent-seeking but require explicit narrowing before the law could be passed The goal was pretty much explicitly to tax income from actual labor less and income from simply already having capital a lot more.
  - avgcorrection 5y ago
    > That said I do fully support a far heavier taxation on capital gains if your net worth is in the hundred millionaires. And his famed slogan was “justice for the tens-of millionaires; never shall we suffer under the yoke of the hundreds-of millionaires again”.
  - zionic 5y ago
    > That said I do fully support a far heavier taxation on capital gains if your net worth is in the hundred millionaires. That will be middle class if the gov keeps printing money the way they are. Setting tax rates on net worth is absurd. Taxes should be a flat rate cut of income, and all forms of income should be taxed the same.
- wwtrv 5y ago
  The reason (or one of) is that it’s easier to avoid paying taxes on capital if you’re rich enough by relocating to another country besides various other schemes which allow to minimize your tax rate. So to a large extent competition between different countries keeps capital gains taxes low.
  - xyzzyz 5y ago
    Or even, you can just consume your wealth instead of investing it, thus avoiding the capital gains tax altogether. I believe that the world where the wealthy invest their capital in productive, growing enterprises, is better than the world where they spend it on yachts and mansions — high capital income gains tax incentivizes the latter.
    - mleonhard 5y ago
      > you can just consume your wealth instead of investing it A rich person who does this quickly stops being rich. Few rational rich people will do that. Raising capital gains tax will have the opposite effect: rich peoples' income will go down and they will spend less.
      - xyzzyz 5y ago
        > A rich person who does this quickly stops being rich. No, that depends on how fast you're consuming it. For example, instead of investing most of your excess revenues, you can invest only half of it, and consume the other half. Or, if you are wealthy enough, you can keep consuming without investing for a long time. Lastly, you don't have to stay rich forever, as you can't take your wealth with you to the other side. > Raising capital gains tax will have the opposite effect: rich peoples' income will go down and they will spend less. Unlikely: the rich already spend only rather small fraction of their incomes, and it is the prospects of making more money in future that is keeping them from spending more.
- xyzzyz 5y ago
  It might do you good to research why in fact most economists believe that, and why most countries’ tax systems reflect that opinion. You will learn a lot about role of incentives, value of investment for general welfare, elasticity of labor supply vs investment, substitution effects for investment vs consumption, and all kinds of interesting topics. Of course, if you’re motivated by punitive instinct, instead of goal of taxing optimally to achieve maximum general welfare (including among low wage earners), you likely won’t find it appealing.
  - DarylZero 5y ago
    Economists are pretty dumb here. If you allow superwealthy parasites to exist, they become "host-controlling" parasites and abolish democracy and establish plutocracy. Economists don't model that and it makes their models useless.
- konfusinomicon 5y ago
  the lower tax rate is an incentive to invest that money, which causes growth, which in turn causes more tax revenue from that growth. ya, there are people that game that system, but there are far more people who benefit from such a tax rate and arent gaming anyone, just trying to live the dream and move up (to a deluxe apartment, in the skyyy). if anything, the tax on labor should be brought down, not the other way around. we are already taxed enough (atleast in the states we are!)
  - mleonhard 5y ago
    > the lower tax rate is an incentive to invest that money Why do you think an incentive is needed? If the tax rate on investment gains was higher, do you think rich people would reduce the amount of money they invest? What would they do with their money other than investing it? > the tax on labor should be brought down Which government services would you cut to go along with the reduction in government tax revenue? Or would you put those payments on the next generation by borrowing?
    - konfusinomicon 5y ago
      the incentive is not necessarily needed, but it does make that avenue to grow wealth much more attractive. if none, the richer would seek out other ways to grow that money that aren't as effective at growing the tax base, and in turn the economy. or they could just sit on it and grow their stack, passing it down as generational wealth, something akin to scrooge mcduck, swimming in his piles of money. as far as removing government services, I can't say exactly which ones I would cut, there are most certainly several, but the federal government needs to take a huge step back and allocate the money and power of many of its departments back into the hands of the state and local governments. there is too much nuance that the federal government doesn't understand about local communities that ends up inflating costs by ridiculous amounts because things are generalized across the entire population, and not tailored for the specific needs of a region.
  - annoyingnoob 5y ago
    The trickle-down approach of cutting taxes for the rich actually created a trickle-up and we have a huge disparity in wealth inequality. Lower taxes on the rich makes them richer at the expense of everyone else.
- SilasX 5y ago
  Because the capital gains tax is only a portion of the tax applied to capital income. When you invest in a venture, you pay taxes on the profits. You pay taxes on the dividends it throws off. Whatever accumulated value remains when you sell your share gets hit by capital gains tax. The "tax on money you made with money you have" is the combination of the profit tax, dividend tax, and capital gains tax. That's not to say the total taxation of capital income is or isn't unfair (or is or isn't double/triple taxed), but it's misleading to just look at capital gains as an income source in isolation.
  - mleonhard 5y ago
    > When you invest in a venture, you pay taxes on the profits. You pay taxes on the dividends it throws off. Whatever accumulated value remains when you sell your share gets hit by capital gains tax. This is not true. When you invest in a venture, hold its stock for 60 days, and it pays you its profit, this income is considered "qualified dividends" and is subject to capital gains tax. > The "tax on money you made with money you have" is the combination of the profit tax, dividend tax, and capital gains tax. What are "profit tax" and "dividend tax"? These are not terms used in USA. From the IRS rules: > Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates. https://www.irs.gov/taxtopics/tc404 https://www.irs.gov/taxtopics/tc404 > Qualified Dividends > Holding period. You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. https://www.irs.gov/publications/p550#en_US_2020_publink100010075 https://www.irs.gov/publications/p550#en_US_2020_publink1000...
    - SilasX 5y ago
      >This is not true. When you invest in a venture, hold its stock for 60 days, and it pays you its profit, this income is considered "qualified dividends" and is subject to capital gains tax. And? Okay, that's a) a special case, and b) confirmation of the point I was making that you get taxed on dividends (and on capital gains) only as one piece of total "capital income taxation". (The fact that something is taxed at the capital gains rate does not somehow mean that the dividends were not taxed, as you seem to be implying.) >What are "profit tax" and "dividend tax"? These are not terms used in USA. It sounds like you're just trying to be difficult and uncurious at the cost of a productive discussion. I was speaking in the most lay, general terms. Profits are taxed. Dividends are taxed. In normal, ordinary usage of English, one can refer to those taxes as "profit taxes" and "dividend taxes", even if the technical term is different. (Your native language probably does the same.) If I go through you posting history, am I going to find you always using the technical term? Yes, the "profit tax" I referred to would be more technically referred to as the corporate income tax. The dividend tax also might have a more technically accurate term, similarly irrelevant to this context or point. >Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates. I don't know why you think this is relevant to my point. It just means sometimes the rate is different from "the" capital gains tax. In no way does it refute that the events of profit and dividend payment are subject to a separate tax, making the "capital gains tax" an incomplete picture of the tax rate on capital income. If you agree with that latter point, then you agree with my comment, and you're just cluttering the discussion with misdirection and red herrings.
- rhino369 5y ago
  It's hard to tax them at effectively the same rate. One issue you have to consider is inflation. If you buy a house in 1980 for 100k and sell it for $314k in 2020, you didn't really make any real income. You can adjust for inflation, so it shouldn't stop you from trying to make capital gains the same as ordinary income. But you do need to adjust. Also, some types of assets subject to capital gains are separately taxed. If you own corporate stock, that corp might be paying a lot of income tax. That reduces the value of the stock, which means you are indirectly being taxed. Sometimes that indirect tax is basically a drop in the bucket compared to capital gains (holding Amazon or Uber long term), but for some assets it could be quite significant. But one big reason is that the upper middle class are easier marks and hold much less power than the capital class.
- hnbad 5y ago
  > Why does anyone think it's OK to pay less on money you made with money you have? If you know this you may think everybody knows this but a lot of people don't and find it highly unintuitive, so I'm going to spell it out: In a very broad sense there are two definitions of "justice" and people will think of one or the other as obviously correct. On the one hand you have people who think justice means that everyone can take what they need and give what they can. These people usually think that humans are cooperative by nature and are intrinsically motivated to do good by others as long as they aren't taken advantage of, i.e. as long as everyone else also gives as much as they can and only takes what they need. On the other hand you have people who think justice means that everyone gets what they deserve. These people usually think that humans are competitive by nature and are intrinsically motivated to take advantage of others and need to be kept in their place as defined by the hierarchy they view as natural and self-evident. You seem to be part of the former group. The people who think "it's OK to pay less on money you made with money you have" are part of the latter. Neither of the two views is "wrong" in a meaningful way, they are just fundamentally incompatible when it comes to pushing for what they see as "good" or "just".
  - DarylZero 5y ago
    Not a very useful framework at all, more of a caricature. Big problem with the economy is that it rewards zero-sum leeches rather than compensate the sacrifice of labor. And the superwealthy are always people who figured out or inherited a way to be parasites.
    - hnbad 5y ago
      > Not a very useful framework at all, more of a caricature. What an odd sentence to be followed by describing the extremely rich as "leeches" and "parasites". Sarcasm aside, I think the problem with your analysis is that it doesn't account for people who don't benefit from the system being extremely invested in maintaining it, especially those who understand that they have no realistic chances of coming out on top. There are a lot of hierarchical mindsets that can be deconstructed given the right exposure and sufficient time, but the belief in the necessity, inevitability and moral good of hierarchies themselves is extremely difficult to unlearn and can be found in most parts of the political spectrum (though of course being overrepresented in some groups, e.g. Evangelical Christian conservatives). Most people therefore take some hierarchies for granted while being in disbelief that anyone could take the ones they reject seriously. You can believe in absolute meritocracy without believing in "race realism" for example.
- Symmetry 5y ago
  One clever plan to do that I've heard is the idea of a progressive consumption tax. That is, you have the existing income tax structure but you make all savings in banks or brokerages or whatever tax deductible but tax anything you withdraw from them as regular income. This would tend to have some nice properties with letting people smooth consumption, getting rid of special items in our tax code for particular sorts of savings, and solve the problem of billionaires borrowing against their stock to live without having to pay taxes. You do have to keep having a special case for housing which is both a form of consumption and a savings vehicle and a few others but it looks like it would be a bit simpler and fairer.
- ratboy666 5y ago
  1 - I have already paid tax on the money. 2 - In making the investment, I stand to lose (or gain) 3 - The lost money is not an expense Given all of this, I expect that the capital gain rate is specified as lower to encourage me to invest. If the capital gain rate were higher than the income rate, I would not make risky investments. I could use my money to invest in my own business -- where I have expenses available. And, take an income. Any loss would then be an expense. I just wouldn't invest in other business. How would you encourage investment behavior?
  - ryandrake 5y ago
    > 1 - I have already paid tax on the money. Money is taxed over and over all the time. Your income gets taxed, then it's taxed again when you spend it, then it's taxed again when the store owner reports it as earnings, and on and on. There's no rule that once a dollar is taxed it shouldn't be taxed again. But, for some reason, it's only shareholders who complain about how unfair "double taxation" is [1]. 1: https://www.thepatriotaxe.com/spot-the-double-taxation/ https://www.thepatriotaxe.com/spot-the-double-taxation/
    - ratboy666 5y ago
      I like your cartoon. The difference with the dividend flow is that the payment was made... not for a good or service (which all the other flows have in common) but tax on a repayment. Not a fixed, negotiated payment either... A repayment that is, interestingly, not in the control of the shareholder. Thus differing from a loan. I would no longer purchase stocks -- I would then prefer bonds (loans). Which means I would take risk into account, and this would stifle (some) innovation. I don't mind taxation at all!
- mortehu 5y ago
  Lower capital gains and qualified dividend rates are tied to entities that pay corporate taxes. As an example, REITs do not pay corporate taxes, so their dividends are treated mostly as ordinary income.
nashashmi 5y ago
What happens when the property is returned to the rightful owner?
- comeonseriously 5y ago
  Maybe that depends on if the rightful owner deducted the stolen items from their taxes.
cblconfederate 5y ago
I mean how am I supposed to know its fair market price? I got it for $0 mr. Taxman!
- mbg721 5y ago
  File a Schedule SP, for "Stolen Property". First enter $1200; then enter the retail sticker price of whatever you stole. Consult the table on page 87. Enter any credits for property stolen during 2021 under the Liberation Stimulus Act, or $50, whichever is greater. If line 8 is greater than line 2, enter 0; otherwise, enter line 2 minus line 8. In the "Other Income" line on your form 1040, mark "STO" for "stolen property".
- h2odragon 5y ago
  "Fence prices" or 10% of market value, as far as I know. Value it as if you'd paid a thief for it. When its bigger or corporations are involved you get to say things like "non-monetary compensation" and so on. Don't forget you can deduct the expenses incurred too, tho: if it cost $20 to buy the masks and water pistols and all you got was a couple of candy bars, that's probably a loss you could carry forward to next year.
- rolph 5y ago
  im thinking if you dont own it then how does it equate to being yours, thus income? perhaps we should also be taxed on what we borrow
  - bowmessage 5y ago
    don't give them any ideas!
  - jimnotgym 5y ago
    Take a look at how IFRS defines income. Nothing about ownership "Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in an increase in equity, other than those relating to contributions from equity participants." https://www.iasplus.com/en/standards/ifrs/ifrs15 https://www.iasplus.com/en/standards/ifrs/ifrs15
nradov 5y ago
Yes income is income, regardless of how obtained. This mainly gives Federal prosecutors an additional tool to nail criminals. Even if prosecutors can't meet the legal burden of proof for theft they can still get the thief for tax fraud.
- dry_soup 5y ago
  It's how they got Al Capone!
- cecilpl2 5y ago
  This is famously how Al Capone was taken down, since they couldn't pin anything else on him.
  - jeremyjh 5y ago
    I’m sure local police and prosecutors could have gotten him for murder etc. but he had them all on salary.
    - jd115 5y ago
      - Dma54rhs 5y ago
        This is not reddit, please stop...
      - mschuster91 5y ago
        For the (ultra-)rich and well-connected, the wheels of justice tend to turn slower than for ordinary people, mostly because rich people have the resources to hire enough lawyers to swamp courts with all kinds of bullshit petitions and impediments, to submit expert "interpretations" or to argue about formalities. Not to mention that a lot of what surrounds the Trump presidency is unchartered territory in a legal sense - there exist laws, but they have never had to be tested before.
    - 5y ago
travisd 5y ago
Don’t forget this gem: > Missing or Kidnapped Children: You may be able to claim a child who was kidnapped by a non-family member. IRS treats a kidnapped child as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. https://www.eitc.irs.gov/other-refundable-credits-toolkit/understanding-who-is-a-qualifying-child/understanding-who-is-a https://www.eitc.irs.gov/other-refundable-credits-toolkit/un...
- seventytwo 5y ago
  There’s some legit arguments for doing this - 1) even if the kid is kidnapped, we still theoretically want the person watching that child to receive financial support (keep in mind most kidnappings are from ex-spouses or other family members). 2) It provides one more paper trail for authorities to track the child down.
  - jandrese 5y ago
    The rule specifically calls out non-family members though.
- cecilpl2 5y ago
  What if you kidnapped someone else's child, can you claim them on your taxes?
  - hartator 5y ago
    Probably if it’s more than 6 calendar months.
  - mleo 5y ago
    Maybe not 100% requirement, but we have always had the kids’ social security number on taxes. Might make it more difficult to claim without.
  - sdenton4 5y ago
    The text is very close to being symmetric; it's just the 'before the date of the kidnapping' which keeps it from applying to the kidnapper.
vmception 5y ago
I like how this article points out the appeals court ruling that the fifth amendment protects against this form of self incrimination But the Supreme Court reversed it, which could lead some to want to disagree with how the court uses the constitution But its important to remember that income taxes require a newer amendment to the constitution to begin with So although the bill of rights (first 10 amendments) was pretty solid, at the time with an understood balance for the society, the appeals court neglected to consider the 16th amendment, which operates outside of that balance. Any amendment can undermine other parts of the constitution or break the point of the whole thing.
- convery 5y ago
  If the US IRS is like Sweden's, they don't really care about criminal activity as long as they get their cut. I usually use our equivalent of that field for income I don't remember / can't be arsed to check where it came from..
  - vmception 5y ago
    Yeah US IRS typically doesn't care and isn't known for sharing or referring to other enforcement agencies But the humans involved do leak things to media etc If you want cash thats worth the same amount as post tax clean cash, you will want to launder and report the now innocuous clean earnings for taxes
- dehrmann 5y ago
  I remember the old advice to describe the source as "Fifth Amendment," meaning you're declaring the income, but not its source.
  - vmception 5y ago
    mmm everyone should do that to increase its utility I wonder if there are any tax journals or case law about this Its up to the government to learn of the illegal activity to levy a charge on that, to then tack on any money laundering charge or wire fraud charge. So if they dont have ways to figure it out, then everyone is good. And investigating something specifically due to fifth amendment use I think would not work well as probable cause - as long as you can afford all the motions and appeals court to afford your rights
rietta 5y ago
The tax man always gets his vig.
bredren 5y ago
Non-citizen workers also are expected to pay taxes on “illegal” work income. IIRC, the IRS has clear ways to do this without a SSN and that this is mandatory if trying to build toward citizenship. Seems like a dicey place to be given how fiercely ICE has been deployed in the US recently though.
- asdfasgasdgasdg 5y ago
  If there is a way to do this, I couldn't find it. While searching on behalf of another party, I learned that if you pay with your ITIN your return will be rejected, and consultations with immigration attorneys also did not turn up a solution. If anyone knows how to do this, I know a person who would be happy to know the method.
  - adolph 5y ago
    I wonder if periodically getting a new ITIN is a method of preventing identity theft.
  - foogazi 5y ago
    It seems that you’d use an ITIN if you have to report income to the IRS and are not eligible for a SSN https://www.irs.gov/individuals/individual-taxpayer-identification-number https://www.irs.gov/individuals/individual-taxpayer-identifi... > What is an ITIN? An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. The IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a Social Security number (SSN) from the Social Security Administration (SSA).
    - bredren 5y ago
      That seems to be correct: > About half of undocumented immigrants also file income tax returns, often using an Individual Taxpayer Identification Number (ITIN) in lieu of a Social Security Number. https://fiscalpolicy.org/wp-content/uploads/2021/02/Pathway-to-Citizenship-pdf.pdf https://fiscalpolicy.org/wp-content/uploads/2021/02/Pathway-... Searched ddg using: pathway toward citizenship income taxes history undocumented You could also try calling the IRS and tell them what you’re trying to do to help somebody and ask what the their preferred methods are. I’ve had occasionally good experiences calling major government offices and asking questions.
adamgordonbell 5y ago
I've heard that in Canada you can get a tax lawyer to help you pay taxes on your illegal income. You get a special number to pay with and have the laywer handle it. The CRA would rather have the money than not and it means if you ever get caught you won't go down for tax evasion because you can show that you paid taxes using an anonymous number.
- arcticbull 5y ago
  It's not even about having the money or not - they'd get it in the end anyways if you were caught - it's about having a second vector to convict you. It's often easier to prove tax fraud than the actual crimes. They're setting you up for the ol' Al Capone treatment. I would argue they don't want you to pay so they have this option, however they're generally required by law to make it possible for you to pay without incriminating yourself so that it was legal for them to prosecute you for not doing so.
  - belltaco 5y ago
    >It's not even about having the money or not - they'd get it in the end anyways if you were caught - it's about having a second vector to convict you. Convicting someone of a crime is expensive, and police and prosecutor resources are scarce. In many cases it's not cost effective to catch and prosecute people. There are also soft crimes like independent escorting where the government would appreciate the tax revenue rather than try to prosecute every violation of law.
    - arcticbull 5y ago
      This report would indicate otherwise in re: narcotics tax stamps. [1] > Almost no dealers actually [anonymously purchase narcotics tax stamps], nor does [then-NYS governor] Mr. Spitzer expect them to. The vast majority of revenues from the tax are collected after law enforcement officials seize the drugs, said Kimberly Y. Brooks, a spokeswoman for the North Carolina Department of Revenue. > “It’s really about cutting the drug dealers off at the knees,” said Ms. Smith of the tax administrators group. “It kind of goes back to the Al Capone model.” Proving tax avoidance is much easier than proving a drug crime, she said, so the tax laws help the authorities keep seized drug money even when a suspect accused of dealing drugs goes free. [1] https://www.nytimes.com/2008/01/24/nyregion/24drugs.html https://www.nytimes.com/2008/01/24/nyregion/24drugs.html
Jerrrry 5y ago
This has always been the case. Those numbers cannot be used against you. They will, however, lead to parallel construction from another 3-letter agency, just by coincidence, and your opsec is as good as compromised at that point.
wellthisisgreat 5y ago
I heard many times that IRS is the toughest of all law enforcement agencies. This is some assertion of dominance if I've ever seen one.
grishka 5y ago
The link returns a 403 for me.
bruceb 5y ago
Lesson here is clear. Steal on Jan 1, use for the year, return Dec 31st, owe no taxes.
- devoutsalsa 5y ago
  Maybe. They could probably get you on the value you derived from the device.
  - throwawayninja 5y ago
    Your defense there is to file depreciation of the asset for the 363 days you used it; you could even steal devices to farm tax credits which can offset your regular income tax this way!
    - devoutsalsa 5y ago
      Can we steal from each other? You yoink my lawn mower, I grab your leaf blower, and we both lower our taxes!?
PaulHoule 5y ago
They busted Al Capone for tax evasion. Everybody was too scared to testify against him for his other crimes.
- celdon25 5y ago
  “If they can get Capone, they can get you.” https://www.youtube.com/watch?v=RhsUHDJ0BFM https://www.youtube.com/watch?v=RhsUHDJ0BFM
deleted 5y ago
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irrational 5y ago
I can’t imagine anyone has ever actually reported their theft as income, but are there any cases of thieves being prosecuted for tax evasion?
- core-utility 5y ago
  Al Capone, I believe
- bena 5y ago
  For people boosting car stereos and the like, probably not. It's just like online shopping. You were technically supposed to report all of that to your state and pay whatever appropriate sales taxes were applicable. In reality, it was a bunch of tax-free shopping.
mrtweetyhack 5y ago
brodouevencode 5y ago
The IRS only cares if you steal from __them__
arcticbull 5y ago
To the folks saying that the "IRS doesn't care about the crime, they just want the money" I think you have it backwards. This whole system is set up as a trap for criminals. The idea is that they don't want you to pay so that they can prosecute you for tax fraud, which in many cases is a much easier charge to prove. For instance, why prove theft of property when you can instead demonstrate that you own the property and didn't pay taxes for it? If a crime is committed the state will get their cut in the end anyways. They have to make it possible for you to pay without incriminating yourself so that you can be charged for not doing so. This is one tax they would rather you not pay.
- kova12 5y ago
  Which is missing the point of taxation. It was supposedly set up so that people pay their fair share. Now it is used to entrap people
  - xboxnolifes 5y ago
    Yeah. It's entrapping people who stole the wealth, not their fair share.
  - arcticbull 5y ago
    It’s explicitly entrapment because you can pay the tax without incriminating yourself - as you would with any other business income. The fact criminals are now committing two crimes at once doesn’t make it entrapment :)
    - arcticbull 5y ago
      explicitly not* entrapment, lol, sorry.
- masklinn 5y ago
  > To the folks saying that the "IRS doesn't care about the crime, they just want the money" I think you have it backwards. This whole system is set up as a trap for criminals. Nonsense. The IRS is not a mandatory reporter by design. The IRS indeed does not care about any crime other than tax-related ones, not only is it not their job, it's their not-job, as in, applying any sort of moral or legal consideration outside of tax-related ones will get employees in trouble.
MeinBlutIstBlau 5y ago
backtoyoujim 5y ago
Do police civil forfeiture seizures on the US federal roadways count as "stolen" ?
deleted 5y ago
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synergy20 5y ago
What about "if you shoplift $950 it is OK and you will not be charged"? maybe they can pay some taxes? :)
dusted 5y ago
I think that's only fair, to be honest.
charlieyu1 5y ago
I thought it is commonly known? Tax authorities don’t care about where your money come from, they only care about the portion they could take

155 points by xojoc 5y ago

Great, what we should be doing is taxing capital gain at a hire rate than physical labor. Why does anyone think it's OK to pay less on money you made with money you have? Especially when the difference can be as great as +25%.

comeonseriously 5y ago
> Why does anyone think it's OK to pay less on money you made with money you have? The venn diagram of people who make the rules overlaps with those who benefit.
dmix 5y ago
You seem to have a lot of research to do on this topic. It’d be a lengthy and at times controversial reply because it hits at a fundamental supply side vs demand side economics. That said I do fully support a far heavier taxation on capital gains if your net worth is in the hundred millionaires. We’ve been talking about taxing billionaires for as long as I’ve been alive and the solution seems so simple to me: income caps. We use income caps all the time for poor people but when talking about capital gains the arguments gets easily neutered because they get propose across the board, critically kneecapping the productive value of capital in capable hands. It’s simple, just cap it at hundreds of millions at not so unreasonable rate. And all the talk on wealth inequality will have a very strong counter argument. Instead every time we get a new tax it seems to hit everyone except the lowest sectors. Even here in Canada.
- hnbad 5y ago
  There was a proposal in Switzerland (not sure what came off it) that essentially worked like this: * income from capital is taxed extremely highly at a progressive rate * the allowance/exempt amount is high enough to cover most investment based retirement plans * the definition of "income from capital" was left open enough to at least cover most trading and rent-seeking but require explicit narrowing before the law could be passed The goal was pretty much explicitly to tax income from actual labor less and income from simply already having capital a lot more.
- avgcorrection 5y ago
  > That said I do fully support a far heavier taxation on capital gains if your net worth is in the hundred millionaires. And his famed slogan was “justice for the tens-of millionaires; never shall we suffer under the yoke of the hundreds-of millionaires again”.
- zionic 5y ago
  > That said I do fully support a far heavier taxation on capital gains if your net worth is in the hundred millionaires. That will be middle class if the gov keeps printing money the way they are. Setting tax rates on net worth is absurd. Taxes should be a flat rate cut of income, and all forms of income should be taxed the same.
wwtrv 5y ago
The reason (or one of) is that it’s easier to avoid paying taxes on capital if you’re rich enough by relocating to another country besides various other schemes which allow to minimize your tax rate. So to a large extent competition between different countries keeps capital gains taxes low.
- xyzzyz 5y ago
  Or even, you can just consume your wealth instead of investing it, thus avoiding the capital gains tax altogether. I believe that the world where the wealthy invest their capital in productive, growing enterprises, is better than the world where they spend it on yachts and mansions — high capital income gains tax incentivizes the latter.
  - mleonhard 5y ago
    > you can just consume your wealth instead of investing it A rich person who does this quickly stops being rich. Few rational rich people will do that. Raising capital gains tax will have the opposite effect: rich peoples' income will go down and they will spend less.
    - xyzzyz 5y ago
      > A rich person who does this quickly stops being rich. No, that depends on how fast you're consuming it. For example, instead of investing most of your excess revenues, you can invest only half of it, and consume the other half. Or, if you are wealthy enough, you can keep consuming without investing for a long time. Lastly, you don't have to stay rich forever, as you can't take your wealth with you to the other side. > Raising capital gains tax will have the opposite effect: rich peoples' income will go down and they will spend less. Unlikely: the rich already spend only rather small fraction of their incomes, and it is the prospects of making more money in future that is keeping them from spending more.
xyzzyz 5y ago
It might do you good to research why in fact most economists believe that, and why most countries’ tax systems reflect that opinion. You will learn a lot about role of incentives, value of investment for general welfare, elasticity of labor supply vs investment, substitution effects for investment vs consumption, and all kinds of interesting topics. Of course, if you’re motivated by punitive instinct, instead of goal of taxing optimally to achieve maximum general welfare (including among low wage earners), you likely won’t find it appealing.
- DarylZero 5y ago
  Economists are pretty dumb here. If you allow superwealthy parasites to exist, they become "host-controlling" parasites and abolish democracy and establish plutocracy. Economists don't model that and it makes their models useless.
konfusinomicon 5y ago
the lower tax rate is an incentive to invest that money, which causes growth, which in turn causes more tax revenue from that growth. ya, there are people that game that system, but there are far more people who benefit from such a tax rate and arent gaming anyone, just trying to live the dream and move up (to a deluxe apartment, in the skyyy). if anything, the tax on labor should be brought down, not the other way around. we are already taxed enough (atleast in the states we are!)
- mleonhard 5y ago
  > the lower tax rate is an incentive to invest that money Why do you think an incentive is needed? If the tax rate on investment gains was higher, do you think rich people would reduce the amount of money they invest? What would they do with their money other than investing it? > the tax on labor should be brought down Which government services would you cut to go along with the reduction in government tax revenue? Or would you put those payments on the next generation by borrowing?
  - konfusinomicon 5y ago
    the incentive is not necessarily needed, but it does make that avenue to grow wealth much more attractive. if none, the richer would seek out other ways to grow that money that aren't as effective at growing the tax base, and in turn the economy. or they could just sit on it and grow their stack, passing it down as generational wealth, something akin to scrooge mcduck, swimming in his piles of money. as far as removing government services, I can't say exactly which ones I would cut, there are most certainly several, but the federal government needs to take a huge step back and allocate the money and power of many of its departments back into the hands of the state and local governments. there is too much nuance that the federal government doesn't understand about local communities that ends up inflating costs by ridiculous amounts because things are generalized across the entire population, and not tailored for the specific needs of a region.
- annoyingnoob 5y ago
  The trickle-down approach of cutting taxes for the rich actually created a trickle-up and we have a huge disparity in wealth inequality. Lower taxes on the rich makes them richer at the expense of everyone else.
SilasX 5y ago
Because the capital gains tax is only a portion of the tax applied to capital income. When you invest in a venture, you pay taxes on the profits. You pay taxes on the dividends it throws off. Whatever accumulated value remains when you sell your share gets hit by capital gains tax. The "tax on money you made with money you have" is the combination of the profit tax, dividend tax, and capital gains tax. That's not to say the total taxation of capital income is or isn't unfair (or is or isn't double/triple taxed), but it's misleading to just look at capital gains as an income source in isolation.
- mleonhard 5y ago
  > When you invest in a venture, you pay taxes on the profits. You pay taxes on the dividends it throws off. Whatever accumulated value remains when you sell your share gets hit by capital gains tax. This is not true. When you invest in a venture, hold its stock for 60 days, and it pays you its profit, this income is considered "qualified dividends" and is subject to capital gains tax. > The "tax on money you made with money you have" is the combination of the profit tax, dividend tax, and capital gains tax. What are "profit tax" and "dividend tax"? These are not terms used in USA. From the IRS rules: > Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates. https://www.irs.gov/taxtopics/tc404 https://www.irs.gov/taxtopics/tc404 > Qualified Dividends > Holding period. You must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. https://www.irs.gov/publications/p550#en_US_2020_publink100010075 https://www.irs.gov/publications/p550#en_US_2020_publink1000...
  - SilasX 5y ago
    >This is not true. When you invest in a venture, hold its stock for 60 days, and it pays you its profit, this income is considered "qualified dividends" and is subject to capital gains tax. And? Okay, that's a) a special case, and b) confirmation of the point I was making that you get taxed on dividends (and on capital gains) only as one piece of total "capital income taxation". (The fact that something is taxed at the capital gains rate does not somehow mean that the dividends were not taxed, as you seem to be implying.) >What are "profit tax" and "dividend tax"? These are not terms used in USA. It sounds like you're just trying to be difficult and uncurious at the cost of a productive discussion. I was speaking in the most lay, general terms. Profits are taxed. Dividends are taxed. In normal, ordinary usage of English, one can refer to those taxes as "profit taxes" and "dividend taxes", even if the technical term is different. (Your native language probably does the same.) If I go through you posting history, am I going to find you always using the technical term? Yes, the "profit tax" I referred to would be more technically referred to as the corporate income tax. The dividend tax also might have a more technically accurate term, similarly irrelevant to this context or point. >Whereas ordinary dividends are taxable as ordinary income, qualified dividends that meet certain requirements are taxed at lower capital gain rates. I don't know why you think this is relevant to my point. It just means sometimes the rate is different from "the" capital gains tax. In no way does it refute that the events of profit and dividend payment are subject to a separate tax, making the "capital gains tax" an incomplete picture of the tax rate on capital income. If you agree with that latter point, then you agree with my comment, and you're just cluttering the discussion with misdirection and red herrings.
rhino369 5y ago
It's hard to tax them at effectively the same rate. One issue you have to consider is inflation. If you buy a house in 1980 for 100k and sell it for $314k in 2020, you didn't really make any real income. You can adjust for inflation, so it shouldn't stop you from trying to make capital gains the same as ordinary income. But you do need to adjust. Also, some types of assets subject to capital gains are separately taxed. If you own corporate stock, that corp might be paying a lot of income tax. That reduces the value of the stock, which means you are indirectly being taxed. Sometimes that indirect tax is basically a drop in the bucket compared to capital gains (holding Amazon or Uber long term), but for some assets it could be quite significant. But one big reason is that the upper middle class are easier marks and hold much less power than the capital class.
hnbad 5y ago
> Why does anyone think it's OK to pay less on money you made with money you have? If you know this you may think everybody knows this but a lot of people don't and find it highly unintuitive, so I'm going to spell it out: In a very broad sense there are two definitions of "justice" and people will think of one or the other as obviously correct. On the one hand you have people who think justice means that everyone can take what they need and give what they can. These people usually think that humans are cooperative by nature and are intrinsically motivated to do good by others as long as they aren't taken advantage of, i.e. as long as everyone else also gives as much as they can and only takes what they need. On the other hand you have people who think justice means that everyone gets what they deserve. These people usually think that humans are competitive by nature and are intrinsically motivated to take advantage of others and need to be kept in their place as defined by the hierarchy they view as natural and self-evident. You seem to be part of the former group. The people who think "it's OK to pay less on money you made with money you have" are part of the latter. Neither of the two views is "wrong" in a meaningful way, they are just fundamentally incompatible when it comes to pushing for what they see as "good" or "just".
- DarylZero 5y ago
  Not a very useful framework at all, more of a caricature. Big problem with the economy is that it rewards zero-sum leeches rather than compensate the sacrifice of labor. And the superwealthy are always people who figured out or inherited a way to be parasites.
  - hnbad 5y ago
    > Not a very useful framework at all, more of a caricature. What an odd sentence to be followed by describing the extremely rich as "leeches" and "parasites". Sarcasm aside, I think the problem with your analysis is that it doesn't account for people who don't benefit from the system being extremely invested in maintaining it, especially those who understand that they have no realistic chances of coming out on top. There are a lot of hierarchical mindsets that can be deconstructed given the right exposure and sufficient time, but the belief in the necessity, inevitability and moral good of hierarchies themselves is extremely difficult to unlearn and can be found in most parts of the political spectrum (though of course being overrepresented in some groups, e.g. Evangelical Christian conservatives). Most people therefore take some hierarchies for granted while being in disbelief that anyone could take the ones they reject seriously. You can believe in absolute meritocracy without believing in "race realism" for example.
Symmetry 5y ago
One clever plan to do that I've heard is the idea of a progressive consumption tax. That is, you have the existing income tax structure but you make all savings in banks or brokerages or whatever tax deductible but tax anything you withdraw from them as regular income. This would tend to have some nice properties with letting people smooth consumption, getting rid of special items in our tax code for particular sorts of savings, and solve the problem of billionaires borrowing against their stock to live without having to pay taxes. You do have to keep having a special case for housing which is both a form of consumption and a savings vehicle and a few others but it looks like it would be a bit simpler and fairer.
ratboy666 5y ago
1 - I have already paid tax on the money. 2 - In making the investment, I stand to lose (or gain) 3 - The lost money is not an expense Given all of this, I expect that the capital gain rate is specified as lower to encourage me to invest. If the capital gain rate were higher than the income rate, I would not make risky investments. I could use my money to invest in my own business -- where I have expenses available. And, take an income. Any loss would then be an expense. I just wouldn't invest in other business. How would you encourage investment behavior?
- ryandrake 5y ago
  > 1 - I have already paid tax on the money. Money is taxed over and over all the time. Your income gets taxed, then it's taxed again when you spend it, then it's taxed again when the store owner reports it as earnings, and on and on. There's no rule that once a dollar is taxed it shouldn't be taxed again. But, for some reason, it's only shareholders who complain about how unfair "double taxation" is [1]. 1: https://www.thepatriotaxe.com/spot-the-double-taxation/ https://www.thepatriotaxe.com/spot-the-double-taxation/
  - ratboy666 5y ago
    I like your cartoon. The difference with the dividend flow is that the payment was made... not for a good or service (which all the other flows have in common) but tax on a repayment. Not a fixed, negotiated payment either... A repayment that is, interestingly, not in the control of the shareholder. Thus differing from a loan. I would no longer purchase stocks -- I would then prefer bonds (loans). Which means I would take risk into account, and this would stifle (some) innovation. I don't mind taxation at all!
mortehu 5y ago
Lower capital gains and qualified dividend rates are tied to entities that pay corporate taxes. As an example, REITs do not pay corporate taxes, so their dividends are treated mostly as ordinary income.

nashashmi 5y ago

What happens when the property is returned to the rightful owner?

comeonseriously 5y ago
Maybe that depends on if the rightful owner deducted the stolen items from their taxes.

cblconfederate 5y ago

I mean how am I supposed to know its fair market price? I got it for $0 mr. Taxman!

mbg721 5y ago
File a Schedule SP, for "Stolen Property". First enter $1200; then enter the retail sticker price of whatever you stole. Consult the table on page 87. Enter any credits for property stolen during 2021 under the Liberation Stimulus Act, or $50, whichever is greater. If line 8 is greater than line 2, enter 0; otherwise, enter line 2 minus line 8. In the "Other Income" line on your form 1040, mark "STO" for "stolen property".
h2odragon 5y ago
"Fence prices" or 10% of market value, as far as I know. Value it as if you'd paid a thief for it. When its bigger or corporations are involved you get to say things like "non-monetary compensation" and so on. Don't forget you can deduct the expenses incurred too, tho: if it cost $20 to buy the masks and water pistols and all you got was a couple of candy bars, that's probably a loss you could carry forward to next year.
rolph 5y ago
im thinking if you dont own it then how does it equate to being yours, thus income? perhaps we should also be taxed on what we borrow
- bowmessage 5y ago
  don't give them any ideas!
- jimnotgym 5y ago
  Take a look at how IFRS defines income. Nothing about ownership "Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in an increase in equity, other than those relating to contributions from equity participants." https://www.iasplus.com/en/standards/ifrs/ifrs15 https://www.iasplus.com/en/standards/ifrs/ifrs15

nradov 5y ago

Yes income is income, regardless of how obtained. This mainly gives Federal prosecutors an additional tool to nail criminals. Even if prosecutors can't meet the legal burden of proof for theft they can still get the thief for tax fraud.

dry_soup 5y ago
It's how they got Al Capone!
cecilpl2 5y ago
This is famously how Al Capone was taken down, since they couldn't pin anything else on him.
- jeremyjh 5y ago
  I’m sure local police and prosecutors could have gotten him for murder etc. but he had them all on salary.
  - jd115 5y ago
    - Dma54rhs 5y ago
      This is not reddit, please stop...
    - mschuster91 5y ago
      For the (ultra-)rich and well-connected, the wheels of justice tend to turn slower than for ordinary people, mostly because rich people have the resources to hire enough lawyers to swamp courts with all kinds of bullshit petitions and impediments, to submit expert "interpretations" or to argue about formalities. Not to mention that a lot of what surrounds the Trump presidency is unchartered territory in a legal sense - there exist laws, but they have never had to be tested before.
  - 5y ago

travisd 5y ago

Don’t forget this gem: > Missing or Kidnapped Children: You may be able to claim a child who was kidnapped by a non-family member. IRS treats a kidnapped child as living with you for more than half of the year if the child lived with you for more than half the part of the year before the date of the kidnapping. https://www.eitc.irs.gov/other-refundable-credits-toolkit/understanding-who-is-a-qualifying-child/understanding-who-is-a https://www.eitc.irs.gov/other-refundable-credits-toolkit/un...

seventytwo 5y ago
There’s some legit arguments for doing this - 1) even if the kid is kidnapped, we still theoretically want the person watching that child to receive financial support (keep in mind most kidnappings are from ex-spouses or other family members). 2) It provides one more paper trail for authorities to track the child down.
- jandrese 5y ago
  The rule specifically calls out non-family members though.
cecilpl2 5y ago
What if you kidnapped someone else's child, can you claim them on your taxes?
- hartator 5y ago
  Probably if it’s more than 6 calendar months.
- mleo 5y ago
  Maybe not 100% requirement, but we have always had the kids’ social security number on taxes. Might make it more difficult to claim without.
- sdenton4 5y ago
  The text is very close to being symmetric; it's just the 'before the date of the kidnapping' which keeps it from applying to the kidnapper.

vmception 5y ago

I like how this article points out the appeals court ruling that the fifth amendment protects against this form of self incrimination But the Supreme Court reversed it, which could lead some to want to disagree with how the court uses the constitution But its important to remember that income taxes require a newer amendment to the constitution to begin with So although the bill of rights (first 10 amendments) was pretty solid, at the time with an understood balance for the society, the appeals court neglected to consider the 16th amendment, which operates outside of that balance. Any amendment can undermine other parts of the constitution or break the point of the whole thing.

convery 5y ago
If the US IRS is like Sweden's, they don't really care about criminal activity as long as they get their cut. I usually use our equivalent of that field for income I don't remember / can't be arsed to check where it came from..
- vmception 5y ago
  Yeah US IRS typically doesn't care and isn't known for sharing or referring to other enforcement agencies But the humans involved do leak things to media etc If you want cash thats worth the same amount as post tax clean cash, you will want to launder and report the now innocuous clean earnings for taxes
dehrmann 5y ago
I remember the old advice to describe the source as "Fifth Amendment," meaning you're declaring the income, but not its source.
- vmception 5y ago
  mmm everyone should do that to increase its utility I wonder if there are any tax journals or case law about this Its up to the government to learn of the illegal activity to levy a charge on that, to then tack on any money laundering charge or wire fraud charge. So if they dont have ways to figure it out, then everyone is good. And investigating something specifically due to fifth amendment use I think would not work well as probable cause - as long as you can afford all the motions and appeals court to afford your rights

rietta 5y ago

The tax man always gets his vig.

bredren 5y ago

Non-citizen workers also are expected to pay taxes on “illegal” work income. IIRC, the IRS has clear ways to do this without a SSN and that this is mandatory if trying to build toward citizenship. Seems like a dicey place to be given how fiercely ICE has been deployed in the US recently though.

asdfasgasdgasdg 5y ago
If there is a way to do this, I couldn't find it. While searching on behalf of another party, I learned that if you pay with your ITIN your return will be rejected, and consultations with immigration attorneys also did not turn up a solution. If anyone knows how to do this, I know a person who would be happy to know the method.
- adolph 5y ago
  I wonder if periodically getting a new ITIN is a method of preventing identity theft.
- foogazi 5y ago
  It seems that you’d use an ITIN if you have to report income to the IRS and are not eligible for a SSN https://www.irs.gov/individuals/individual-taxpayer-identification-number https://www.irs.gov/individuals/individual-taxpayer-identifi... > What is an ITIN? An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. The IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a Social Security number (SSN) from the Social Security Administration (SSA).
  - bredren 5y ago
    That seems to be correct: > About half of undocumented immigrants also file income tax returns, often using an Individual Taxpayer Identification Number (ITIN) in lieu of a Social Security Number. https://fiscalpolicy.org/wp-content/uploads/2021/02/Pathway-to-Citizenship-pdf.pdf https://fiscalpolicy.org/wp-content/uploads/2021/02/Pathway-... Searched ddg using: pathway toward citizenship income taxes history undocumented You could also try calling the IRS and tell them what you’re trying to do to help somebody and ask what the their preferred methods are. I’ve had occasionally good experiences calling major government offices and asking questions.

adamgordonbell 5y ago

I've heard that in Canada you can get a tax lawyer to help you pay taxes on your illegal income. You get a special number to pay with and have the laywer handle it. The CRA would rather have the money than not and it means if you ever get caught you won't go down for tax evasion because you can show that you paid taxes using an anonymous number.

arcticbull 5y ago
It's not even about having the money or not - they'd get it in the end anyways if you were caught - it's about having a second vector to convict you. It's often easier to prove tax fraud than the actual crimes. They're setting you up for the ol' Al Capone treatment. I would argue they don't want you to pay so they have this option, however they're generally required by law to make it possible for you to pay without incriminating yourself so that it was legal for them to prosecute you for not doing so.
- belltaco 5y ago
  >It's not even about having the money or not - they'd get it in the end anyways if you were caught - it's about having a second vector to convict you. Convicting someone of a crime is expensive, and police and prosecutor resources are scarce. In many cases it's not cost effective to catch and prosecute people. There are also soft crimes like independent escorting where the government would appreciate the tax revenue rather than try to prosecute every violation of law.
  - arcticbull 5y ago
    This report would indicate otherwise in re: narcotics tax stamps. [1] > Almost no dealers actually [anonymously purchase narcotics tax stamps], nor does [then-NYS governor] Mr. Spitzer expect them to. The vast majority of revenues from the tax are collected after law enforcement officials seize the drugs, said Kimberly Y. Brooks, a spokeswoman for the North Carolina Department of Revenue. > “It’s really about cutting the drug dealers off at the knees,” said Ms. Smith of the tax administrators group. “It kind of goes back to the Al Capone model.” Proving tax avoidance is much easier than proving a drug crime, she said, so the tax laws help the authorities keep seized drug money even when a suspect accused of dealing drugs goes free. [1] https://www.nytimes.com/2008/01/24/nyregion/24drugs.html https://www.nytimes.com/2008/01/24/nyregion/24drugs.html

Jerrrry 5y ago

This has always been the case. Those numbers cannot be used against you. They will, however, lead to parallel construction from another 3-letter agency, just by coincidence, and your opsec is as good as compromised at that point.

wellthisisgreat 5y ago

I heard many times that IRS is the toughest of all law enforcement agencies. This is some assertion of dominance if I've ever seen one.

grishka 5y ago

The link returns a 403 for me.

bruceb 5y ago

Lesson here is clear. Steal on Jan 1, use for the year, return Dec 31st, owe no taxes.

devoutsalsa 5y ago
Maybe. They could probably get you on the value you derived from the device.
- throwawayninja 5y ago
  Your defense there is to file depreciation of the asset for the 363 days you used it; you could even steal devices to farm tax credits which can offset your regular income tax this way!
  - devoutsalsa 5y ago
    Can we steal from each other? You yoink my lawn mower, I grab your leaf blower, and we both lower our taxes!?

PaulHoule 5y ago

They busted Al Capone for tax evasion. Everybody was too scared to testify against him for his other crimes.

celdon25 5y ago
“If they can get Capone, they can get you.” https://www.youtube.com/watch?v=RhsUHDJ0BFM https://www.youtube.com/watch?v=RhsUHDJ0BFM

deleted 5y ago

[deleted]

irrational 5y ago

I can’t imagine anyone has ever actually reported their theft as income, but are there any cases of thieves being prosecuted for tax evasion?

core-utility 5y ago
Al Capone, I believe
bena 5y ago
For people boosting car stereos and the like, probably not. It's just like online shopping. You were technically supposed to report all of that to your state and pay whatever appropriate sales taxes were applicable. In reality, it was a bunch of tax-free shopping.

mrtweetyhack 5y ago

brodouevencode 5y ago

The IRS only cares if you steal from __them__

arcticbull 5y ago

To the folks saying that the "IRS doesn't care about the crime, they just want the money" I think you have it backwards. This whole system is set up as a trap for criminals. The idea is that they don't want you to pay so that they can prosecute you for tax fraud, which in many cases is a much easier charge to prove. For instance, why prove theft of property when you can instead demonstrate that you own the property and didn't pay taxes for it? If a crime is committed the state will get their cut in the end anyways. They have to make it possible for you to pay without incriminating yourself so that you can be charged for not doing so. This is one tax they would rather you not pay.

kova12 5y ago
Which is missing the point of taxation. It was supposedly set up so that people pay their fair share. Now it is used to entrap people
- xboxnolifes 5y ago
  Yeah. It's entrapping people who stole the wealth, not their fair share.
- arcticbull 5y ago
  It’s explicitly entrapment because you can pay the tax without incriminating yourself - as you would with any other business income. The fact criminals are now committing two crimes at once doesn’t make it entrapment :)
  - arcticbull 5y ago
    explicitly not* entrapment, lol, sorry.
masklinn 5y ago
> To the folks saying that the "IRS doesn't care about the crime, they just want the money" I think you have it backwards. This whole system is set up as a trap for criminals. Nonsense. The IRS is not a mandatory reporter by design. The IRS indeed does not care about any crime other than tax-related ones, not only is it not their job, it's their not-job, as in, applying any sort of moral or legal consideration outside of tax-related ones will get employees in trouble.

MeinBlutIstBlau 5y ago

backtoyoujim 5y ago

Do police civil forfeiture seizures on the US federal roadways count as "stolen" ?

deleted 5y ago

[deleted]

synergy20 5y ago

What about "if you shoplift $950 it is OK and you will not be charged"? maybe they can pay some taxes? :)

dusted 5y ago

I think that's only fair, to be honest.

charlieyu1 5y ago

I thought it is commonly known? Tax authorities don’t care about where your money come from, they only care about the portion they could take