Tax Advice Fail
Tax Advice Fail
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I knew I shouldn’t have robbed the bank in december! Dammit!
You can deduct the expenses for bullets used for the robbery against the income earned from the robbery!!!
♫ A. E. was a bankrobber
But he never hurt nobody
He just loved to live that way
And he loved to steal your money ♫
Same in the U.S. It’s how they got Al Capone.
Well, the IRS does it, so should we, i guess.
Actually, in the US expenses of an some illegal activities may be deductible from the proceeds for the purposes of calculating income.
in Canada this is the best advice you can take, if you are caught and you DIDN’T report your “earnings” you will go down ten times harder, also they won’t check you out, as long as you report it they don’t care
But if it’s a hobby rather than your job will you get an allowance?
I will grant you at least that since you are The Moomin.
*slides proceeds from t-shirt sales under the table to Leila*
*winks*
*hides under table*
Yoink!
But that was Leilas’ proceeds, for her intellectual property….I stole it yesterday, I didn’t want to get investigated
It’s national wear red day today. I wish I could change the text to red.
*pockets proceeds*
*contacts firemen to “investigate” k@*
*squeezes k@ and MsB*
Does the red thing count if I am not in the same nation?
Fridays are wear red days anyway…I live in a garrison town.
*squeezies*
I am wearing red today in support of the American Heart Association quest to bring cardiovascular health awareness in women. I think this should include all women worldwide and not just us Americans.
Wishing you a very healthy ♥.
I didn’t get the memo!
*runs home to change*
…..
*makes sure some red visible*
I’m wearing red…I just won’t tell you where it is…
Does seeing red count? Because I’m pretty sure I’ll see red sometime today.
I can give you ladies a free cardiovascular checkup.
*queues*
Take deep breaths. I might just have to move your bra a bit to the…Good grieve! Is that even a bra? I have never seen one like it!
It is otherwise known as scaffolding, you obviously don’t see many like me often then!
*creaks like sailcloth under strain*
*saw ‘creaks like sailcloth under strain’ *
*recognized it*
*laughed out loud*
*startled co-workers*
*blushed furiously*
*slowly recedes back into the woodwork*
Don’t go, Leaping Lemur! Stay and play!
We don’t bite!
that reminds me of the comic where the judge is telling the guy “sir, crime does not pay” and the guy responds “judge I don’t expect it to pay, it’s just a hobby”. ok it was much funnier in the comic :-p
I hate to tell you but if you filled out the little form when you “robbed” the bank it is really a withdrawal.
The bad news is that was already your money – Good news is you don’t have to pay taxes on it!
On the other hand – if you used a gun rather than a pen then Yup, you owe taxes.
But what if you own the gun and already claimed it as a business expense.?
http://www.irs.gov/publications/p17/ch12.html
Ctrl-f for Stolen
Insane.
It gets better. Same page, search on “Illegal activities”. LOL
But they’ll only audit you if your supplier sends them a W-2. The armed robbers guild will submit the 1099 for other taxable income.
Whew! Then those bribes are probably not gonna be taxable either!
Same page:
“Bribes. If you receive a bribe, include it in your income. “
i guess the gun was a gift for account opening on the bank
Beats a toaster all to heck and back.
This is exactly why the Acorn scandal is bullshit. Its completely legal and appropriate to give tax advice to criminals. Prostitutes, mafia, drug dealers can avoid an additional charge of tax evasion by reporting illegal income. Not kidding – there is a spot on the form for illegal income. So when a pimp comes to you for tax advice you dont turn him you report his taxes and avoid an additional crime.
Um, no. They were advising them on how to commit tax FRAUD. Big difference. Nor did they say anything to try and dissuade the “pimp” from child prostitution. There shouldn’t BE a place where a criminal feels comfortable going for tax advice, especially in a government-funded office.
You are absoultely incorrect. Your ignorance is excusable as you are likely not a tax professional. Did you read the “fail” photo at top? That is an irs form. The form allows for illegal income. If Al Capone had gone to a tax attorney and reported his illegal income he would not have gone to jail. As Capones tax attorney you have no obligation to run his life only to give him tax advice. You are using emotion to make legal/tax decisions. Gut feeling is not in the tax code. Just b/c its government funding doesnt mean bad legal/tax advice must be given.
*absolutely
Illegal activities. 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.
http://www.irs.gov/publications/p17/ch12.html
I agree with you on the emotion to make a legal/tax decisions, they absolutely shouldn’t mix and that’s a very good point. BUT, if I remember correctly Acorn was telling the people in the scandal to hide the money made from their illicit activity in tins in the ground; to bury it so that no one knew. How is that “Including your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040)…”? Not exactly the most prudent legal advice I would give someone. You mentioned Al Capone and you know he was charged with tax fraud, that’s how they caught him. He was hiding his income. So for Acorn to tell these people to hide their money? That’s very very bad advice from a purely tax/legal standpoint. Class act that Acorn, both telling people that it’s ok to start a child prostitution ring and how to hide the income from the IRS all while getting funded by our government. Real nice.
And we know the ACORN videos weren’t edited how? It’s not that hard to cut what someone really said about one thing then edit in the answer they gave to something else. The same guy who made those videos was arrested for trying to wiretap a Senator, so I’m not going to take anything he says at face value.
There’s always an excuse for when some liberal funded organization does something shady isn’t there? Amazing how more conservative groups can’t get away with the smallest thing without some civil rights idiots making a fuss.
2nd
2rd, nice text XD
fail -.-
4th!
counting Win!
SO ive got 10 months remaining to give it back.
If the value of the item drops before you return it, can you claim a rebate?
Can’t you depreciate it?
Depreciation might be deprecated.
Oh, I have a whole slew of similar questions:
1) If I report the income and pay the tax and return it next year, can I claim a tax credit?
2) If, instead of returning the item, I sell it below the fair market value, can I claim a loss?
3) Suppose I pay the tax and hang on the to item for several years. The value of the item goes up and I sell it at the higher “fair market value.” Does this qualify for capital gains?
4) If I sell the item for less money than it cost me to steal it, can I claim a business loss?
5) If I am part of an organized crime operation (see RICO statutes), doesn’t my employer have to report the income?
6) If I work for myself and sell the item to an independent reseller (i.e. “fence”), does he have to provide me with a form 1099?
Also, notice it says if you steal “property.” Is theft of intangible assets excluded?
On second thought, I think I know the answer to the last question. It’s probably a loophole for bank executives who steal TARP money.
Oh boy, I’m gonna use my years of doing taxes and have fun and actually answer these.
1. No, you have to return it within the year stolen. that means tax year btw, not 365 days from when you stole it. Jan 1, good day for stealing, Dec 31, bad…
2. No. Because you didn’t pay for it, no matter what you sell it for it is considered a gain.
3. Only if the proceeds are greater than a certain amount (not sure what the amount is this year, it changes every year or so)
4. No. You have to be a licensed business to file a business loss and last I checked most states won’t give you one for “Professional Thief”
5. Depends, seriously. If you’re hourly or salary and they collect taxes that they pay to the government on your behalf (Social Security, Medicare and FIT), then yes, they have to report it. If they hire you as an “independent contractor” then it’s your responsibily to report it.
6. No, you have to provide him with a reciept. Unless he plans to sell it then give you back a portion of the proceeds, then he has to give you a 1099. Otherwise you’re just his supplier and are treated as just another vendor.
On a related note to question 1. Dec. 31 is a good day to get married and/or have a child as you get all the tax benefits for the year as if the event had happened on Jan. 1 of the same year.
That’s not a fail. That’s the way US law enforcement authorities caught Al Capone. He didn’t pay the taxes of his robbery so he was convicted.
The whole system sounds like a fail.
So robbery is ok if you report the value as income?
No; but it’s sometimes easier to get someone on one charge than another. For example, if someone has a large amount of unaccounted-for money, you might not be able to prove that they definitely stole it, but you can prove that wherever it came from, they didn’t pay tax on it.
It’s similar to why when you go to the US you have to sign a form saying you aren’t there to overthrow the government – it’s not that that wouldn’t be a crime anyway, but by getting you to sign the form they throw in an extra perjury charge that may be easier to prove than the actual crime.
Wow, I’m gonna write a pre-sex form. Satifaction, not guaranteed.
Satisfaction for you or for her?
I’d say its an Anti-Crime win.
Wow, they really do tax everything they can thing of.
*d’oh!*
*think*
I guess its only valid if you have been lawfully convicted of theft and found guilty?
No, it’s valid if you’re honest (and insanely stupid)
Actually, no. This kind of provision is by no means unique to the US tax code, the point being that evading taxes on one’s income, however derived, is a separate offence, whether the income is from legal or illegal activities (e. g., most commonly, prostitution). Not uncommonly, confidentiality provisions mean, or in the past have meant, that tax authorities may not disclose anything about the content of tax declarations except in answer to a court order (which of course would require that separate evidence of criminal activity be presented to justify the order).
Wondering…when you file an amended tax return claiming the crime proceeds (as part of your restitution to the government after conviction) can you also claim all the costs attendant to that criminal enterprise?
My head hurts now.
Under Australian tax law, no. All expenses related to criminal activity are specifically not deductible, even if they would be deductible were they related to non-criminal activity.
Damn. Can’t even try the “I found it, finders keepers!” with the IRS:
(Same page)
“Found property. If you find and keep property that does not belong to you that has been lost or abandoned (treasure-trove), it is taxable to you at its fair market value in the first year it is your undisputed possession.”
if u have a contract for the things you stole, you are expected from taxes on it.
and if you stole it and you never want to give it back you can clause it.
“excepted” of course
Try again.
Is this for just for private citizens or is it for government as well?
The government doesn’t pay taxes. Otherwise, yes.
stealing is part of the job description for government
I need my virginity back please, whoever it was
in case of having trouble finding the right culprit, you better blame your children though it seems that he/she/they have already lost his/her/their virginity, too.
So you better jump a generation and blame your grandchildren instead – theirs might still be intact and of good value.
No, they’re okay, unless it was stolen this year. Then you might get it back so they can avoid taxes (unless it was so horrible that the value is too negligible for them to claim).
Sorry, sweetie – I sold it on eBay.
*flees*
And to think I couldn’t even pay a pal to get rid of it last year!
*persues*
Hi,
here in Germany it’s the same. You have to report all your incomes even if it’s from drug-dealing or theft, but the Financial Administration has to keep it secret, like lawyers, doctors and priests. So if you commit a crime and don’t declare it in your taxes you have already commited another crime.
What if the rightful owner is dead?
Then a surviving relative would be the rightful owner.
They should use that clause to tax the banks that stole all our money.
Especially since SCOTUS just ruled that corporations have the rights of people.
That’s not a fail, that is one of the way that they put Al Capone in jail.
It is just the law in the USA that stolen property is treated as income.
And a mighty good law too, just another way to screw criminals.
Those of us who have dealt with the IRS are not surprised.
Those of us who have never dealt with the IRS are surprised
I have never dealt with the IRS and I am not surprised.
The IRS who have dealt with those of us are not surprised, either.
I worked for the IRS as an intern many years ago… unless things have changed since I left, every illegal activity that generates income is taxable. You cannot use your gun as a business deduction, for example, in drug dealing but you CAN deduct the cost of goods sold
You cannot deduct legal fees either…. and no, you don’t have to be CONVICTED of the crime. Burden of proof in tax court is not the same as in criminal court.
I was going to post something along these lines, although I’ve never worked for the IRS. They use laws like this to get convictions on people who are found not guilty on a technicality. If you’re found not guilty of a crime, you can’t be tried again for it, no matter what. But if there is a tax law such as this one, they can try you for tax evasion, and the punishment is usually as bad as, or worse than, the criminal punishment.
I remember seeing on TV years ago a thing about a town in Texas that taxed pot. If you sold it, you had to collect taxes on it. They even printed up tax stickers like they do for cigs. The admitted that the whole point was that if you paid for the stickers, they would catch you selling it, and if you sold it without the stickers, they could get you on the tax law even if you were found not guilty on the drug charge.
This is true. It’s how they got Al Capone in the end.
I think that’s how they caught a lot of mafiosi during the prohibition era – obviously they weren’t going to report their income from selling alcohol, smuggling, bribery, intimidation, murder etc, and they could bribe/intimidate/kill witnesses to prevent those original crimes from being proven, but there was no real way to defend against a tax charge. Also I think if you look at those cases, those people who were sentenced for tax evasion were sentenced far more heavily than a regular joe who just didn’t pay his taxes. Just a smokescreen really to get you for something.
So… kind of like a witch hunt.
Relaxed burden of proof, disproportionately high punishment.
They rarely, if ever, charge your regular joe with anything. In most cases they assume you made a mistake and just make you pay them, with massive late fees and interest, of course. Makes more sense to have you out of jail making more money and paying more taxes than to lock you up and have to pay to keep you there. Tax evasion requires you to intentionally lie or not pay taxes, or use some lame excuse not to pay, like Westley Snipes did.
They nearly didn’t, as far as I heard. There was a statute of limitation (or something like that) on the particular evasion they were bringing up against him. But he hired criminal lawyers rather than ones specializing in tax law, and they overlooked the relevant clause, and he went to jail for a crime he wasn’t guilty of.
Laugh… Laugh… Here in Italy we’ll have a similar law soon…
It is actually a clever trick used to catch criminals who the feds cannot convict in criminal court. Al Capone for instance was arrested for tax evasion for not reporting stolen property instead of anything else he did.
I was actually going to point just this out. After everything was said and done, it was the IRS that got Al Capone for tax evasion on stolen property.
Then it’s still a fail. Having a backup crime that you can get someone on if you can’t prove to the satisfaction of a court that they did what you’re actually accusing them of is the stuff of half-baked justice systems.
You have no idea what you’re talking about. Tax evasion is a crime. It’s not a “backup crime,” it’s an entirely separate crime. Failcomment.
that is definitely a win
Honesty is the best policy.
Poice is best honest?
Would you prefer an unsincere poice?
How about an unsecure poice?
Unisecular poice? Is that even a word?
“It’s a trap!!”
Really, the IRS doesn’t care if you rob and steal from people (their in the same business), they just want their cut.
*puts a sad face sticker over first “their” and a smiley face over the second*
Do we really need any more proof that the government is run by idiots?
You could go into office.
Awesome.
You’ll never take me alive!
*cackles maniacally and runs off with stolen goods*
Did you fill out a form for that, miss?
A (GREAT) Belgian blues artist, Roland Van Campenhout, stamped the word “DECEASED” (with a potato stamp!) in red ink on his tax form and returned it to the tax department. That was twenty years ago. They’re still harrassing him about it.
Peter: I’m getting an Audi!
Brian: Peter, there’s a “T.” That says “audit.”
Peter: No, Brian, it’s a foreign car, the “T” is silent. Sweet, I’m getting an Audi!
This is not necessarily fail this line is exactly how they got capon.
Capon? Were they hungry for fowl?
You are wearing red too?
*♥ healthy red squeezies to the blue one*
The IRS has been known to slay many a fowl in the name of tax season.
They’ve posted the wrong code. This is the tax code for the IRS, not the tax code from the IRS…
That’s not a fail. All income has to be reported, no matter what the source. How do you think they nail most embezzlers, drug dealers, and racketeers? Tax evasion.
Fail on the ignorant submitter and moderator.
You’re smarter than a blog? Wow. The next step is being smarter than a can of beans. Work on that.
Fail on the ignorant kid who didn’t read the other billion comments about the same exact thing.
I think they nail all embezzlers, drug dealers, and racketeers the same way they have sex with any other people.
Photoshopped.
No, it’s here:
http://www.irs.gov/publications/p17/ch12.html
Crickey. It’s real. And there was me about to write “IRS URL or it didn’t happen”.
Income is income in the eyes of the law, I suppose.
In California they are asking drug dealers to report money made in drug sales….
Hey, we could use the money these days.
Al Capone was never convicted of any crimes. They got him for tax evasion, e.g., failure to report his income.
Tax evasion IS a crime.
but if you bribe someone so you don’t get arrested for stealing property (a legitimate expense in this kind of endeavor) you cannot use this expense as tax deduction because it’s illegal to bribe people.. Talk about an unfair double standard..
And the person accepting the bribe must declare it on their taxes.
I can’t believe no one has pointed out that this is not a fail! It’s exactly how the Feds managed to convicted infamous Chicago gangster Alphonse Capone.
Not photoshopped at all. This is actually true. The U.S. Supreme Court has a case on this–illegally obtained income or gains of any kind are required to be reported on your tax return.
http://articles.moneycentral.msn.com/Taxes/Advice/BribesTheftsAndOtherTaxableIncome.aspx?page=all
See, e.g., James v. United States, 366 U.S. 213 (1961).
http://en.wikipedia.org/wiki/James_v._United_States_(1961)
And yes, I was too lazy to read the 100 or so comments. No, I don’t care what you think about that.
This is some sound advice for Bernie Madoff.
yes, because someone who steals is going to be honest enough to report it. *rolleyes* A huge government FAIL.
Hey, what happens when you get audited? Go! Explain it! Idiot!
“They use laws like this to get convictions on people who are found not guilty on a technicality. If you’re found not guilty of a crime, you can’t be tried again for it, no matter what. But if there is a tax law such as this one, they can try you for tax evasion, and the punishment is usually as bad as, or worse than, the criminal punishment.”
That wouldn’t work, as if you were found not guilty of the crime, then there is no crime to report income on. The one would cancel out the other.
Almost. By charging you with the crime in the first place, they could gain access to your finanical records. At that point they could line up the amounts you had/have with the amounts you claimed on your taxes. If the numbers didn’t line up, ta da!, you are hereby charged with tax evasion, even if they can’t prove in court you stole anything. All they have to show is that you made, or even might have made, more money than you claimed. Once that charge is there, it’s almost impossible to disprove, you have to account for EVERY expense you had during the time period in question. So if you misplaced so much as one reciept, even if you didn’t steal anything, you’re guilty of tax evasion, the law doesn’t care if its a million dollars or a penny.
Actually, the federal government is prohibited from anything you report in your tax forms for coming after you. In fact, if you do end up getting caught for stealing significant property, you could get an even worse sentence if you also committed tax fraud.
In other words – don’t be like Al Capone! The feds only managed to finally get him for tax issues. If he had just reported his illegal activity on his irs forms, he could’ve died comfortably in a villa instead of in jail.
Is it sad that I know the reason this is actually present?
Ya see, back in the good ol’ days, when Capone was a legitimate businessman and labor unions were communist threats the FBI “influenced” the IRS into taxing ALL profits, rather than those legally obtained.
This change eventually led to Al Capone’s arrest, and (farther down the timetable) to people reading tax documentation and suffering brain aneurisms.
It’s not that sad if you read the 20 Brazilian other posts that also felt obligated to explain it. It would be sad if you didn’t know it after all that.
Many states also require sales taxes be paid on narcotics.
Before it became settled law that illegal income is taxable, one judge gave an opinion that it would demean the government to tax it.
Some years later, it came out that the judge was taking bribes.
According to my CPA, that bit of tax stuff actually isn’t so much fail as it is an additional thing they can bag embezzlers for; that the embezzled money (stolen property) is reportable income, and among everything else they can ding you for if you get caught is for not reporting that income properly.
I think this is a win definately stealing is for nerds
Ahhh! My husband is posting under my “name.” Get your own profile!
I think this is actually legitimate. IIRC, the Feds put Al Capone away not because of bank robbery or murder or anything else, but under a tax evasion charge because he didn’t report his illegal income!
That makes no sense.. What has this world come to??
Couldn’t you argue that the stolen property was a gift, and is thus not subject to taxation?
Wow, like anyone’s gonna do that xD but we also know that the one thing our government does best is fail ^^
If the person was nice enough to report something they stole themselves, they wouldn’t steal it in the first place =_= baaaaka.
I asked my former tax preparer about this once, having seen a line on my 1040 wherein you enter illegal income and wondering what the hell. He told me he once worked for a public accounting firm that had some mafiosi as clients, and he prepared returns for some of them. One of them had an item in his return: “Misc. income, source denied”. Basically, he said, what the client is saying is, I made this amount of money and it’s none of your damn business where I got it, but I’m paying taxes on it. I asked if that was legal, and he said as long as you didn’t try to take deductions against it it was fine. What’s the point? Well, if the guy is showing $75k as income but he’s buying million dollar homes with swimming pools etc., the Feds are going to compare his outgo with his income and want to know where the money is coming from, and if nothing else they can get him for underreporting his income. I asked, isn’t this going to attract lots of attention from the Feds if you use that line? His response was, you don’t use that line unless you’ve already come to the attention of the Feds…
Acorn at it again lol