The IRS wants to tax your illegal income

This does sound dumb, but it also reminds me of a story my grandmother once told me, which I may have mentioned on these forums before, but I cannot be certain. She said that when she used to live in the city, back in the 60's or early 70's, there was a brothel and a madame she knew about, although not personally, lol. She said all of the "employees" there filed federal income tax, listing their occupation basically as a prostitute. I do not know if that is the exact word they used, but it could have been. That is one of the nicer words to describe that particular trade I suppose.

She said that the government never gave them any hassle or anything. They accepted the income filings, of course, and treated them like filings from any legal profession. It probably does not need to be stated that this profession was illegal in this particular state. If memory serves me correctly, there is only one state that has legalized prostitution, and that is only for small portions or counties. I am talking about Nevada obviously, but I'm not sure how all of that works. Is prostitution legal in Canada? Not really related, I am just curious. Not thinking about moving to Canada or anything...

Now, there are not going to be any drug dealers filing federal income tax, simply because the government is not going to overlook something like this, and instead they are going to use the information to identify the big players in the drug world. Now if there were some law to be passed that prevented the IRS from sharing information of this regard with federal agencies tasked with arresting criminals for crimes like drug dealing, then maybe we would see some filings. I only say this because it would decrease the charges brought against the criminal if they were ever caught.

If we are talking about a multi-million dollar drug dealer here, then tax evasion is likely to be added to the list of charges when the federal indictment comes down. Honestly though, I think a drug dealer still could file income tax as things currently stand, if the law already knows about them. But I am not sure if an income tax filing listing income from selling narcotics would constitute enough proof to arrest and charge someone. If not, it could probably be done with no backlash. But I am not a lawyer, and I really have no clue about what would constitute proof with something like this...Interesting to ponder though imo.

Seriously, Would you actually report your illegal income if you had it? Apparently some do in order to avoid more charges but isn't this just setting yourself up for investigation? I don't condone illegal activity* and I guess I don't know enough to be sure, but to me this seems like a hidden form of entrapment and a violation of the 5th Amendment.

*any form of dissent or acting against the Government is considered illegal however there does come a time.Not that I am in any way perusing illegal action.

fox43.com
(visit the link for the full news article)

That is how they got Al Capone and many moonshiners. found them guilty of tax invasion through illegal income.

No paper trail exists whatsover for any "other income" listed. Which means, All funds collected from such foolish mortals who are willing to document their illegal activity will be put into the same shadow accounts that the Masters of puppets, or their lap dogs in D.C, Rape and enjoy for themselves day in and day out just like the collected taxes from all the illegal aliens who are using fake, dead or other peoples Social Security numbers.

Where exactly the hell do you think they are sending all of that revenue? While the typical stupid masses of sheople keep their heads stuck in the ground, there are accounts that are there for the elite to enjoy. When it comes to waking up and recognizing how much is being stolen from them just so a bunch of assholes can eat the best food on the planet, and look down upon everyone, they are asleep at the wheel.

You can't fix stupid though, you just can't. ~$heopleNation

Originally posted by WeRpeons
reply to post by Phage

 

I would think the government put that line in there to cover any illegal drug confiscation or other illegal sales that ended in a trial. They would than have legal means to tax the criminal organization of any illegal sales that were not claimed on their tax forms. The government is always looking for ways to increase its tax revenue.

edit on 2-3-2013 by WeRpeons because: (no reason given)

I doubt it works like that.

In cases of so-called drug lords and cartels, they just freeze all accounts they can trace and seize all assets as 'proceeds of crime' and be done with it...rightly so imo.

No need to invent new Mickey Mouse tax regs at all to get their hands on dodgy cash.

Originally posted by Agarta

The IRS wants to tax your illegal income

fox43.com

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.”

(visit the link for the full news article)


Related News Links:
money.cnn.com
dailyme.com

Ok, are they saying its perfectly okay for anyone to sell drugs to little kids as long as they pay the IRS tax on the transactions?

Don't think of it as a stupid rule. Think of it as being required. Even if no one will actually follow it, they need to list it just as they did, if they are being equal in regards to sources of income. Silly? Sure. But you'd be angrier if drug dealers were given a break from their profits.

This is news? If you make twenty dollars mowing your neighbor's lawn you have to report it to the IRS. Of course you would have to be an idiot to do so. It has been like that for years. Impossible to enforce. Years and years. OP is a typical OP.

Trap for the stupid criminals.

failing to do so is one more felony they can pile up.

reply to post by Agarta


Reminds me of the "Crack Tax"

In some states you are actually supposed to buy tax stamps for any illegal drugs that you sell

Also thats how they got Al Capone

The only thing they could nail him for was tax evasion because they could prove he had more money than he was paying taxes on. Sent him to Alcatraz for tax evasion where he stayed until he died there in the 80's

reply to post by Agarta


They've done this for decades. the point is it gives the Feds another criminal charge if they can't get you on the illegal activity. it has ZERO to do with thinking anyone is going to report anything. Al la Al Capone.

reply to post by Agarta


Illegitimate income has always been subject to taxes. Nothing else to be said.

reply to post by Agarta


Sorry Bro, but I have to say it. DUH!!!! Tax evasion has been an issue since, well forever!

Sounds like they're making preparations to enforce the Obamacare mandate. I read somewhere that the IRS would have no real authority to take any legal action against anyone who refused to buy insurance unless they made a false statement on their tax return.

I would not be surprised to see the IRS finding excuses to get proactive.

Isn't this one of the main reasons someone does this "job" in the first place? What are they going to write in the line? Income is from selling 12 pounds of meth, 2 pounds coc aine, 100 pounds pot? Yea, that isn't going to happen. Those who partake in that sort of activity are not going to follow the IRS's instructions on this one. However, when they get popped, I wonder if the gubbament will start prosecuting them for tax evasion and for the drugs?

On the other hand, as a person who pays taxes, it does irk me that I am paying my fair share, so they should too (as should everyone). However, I doubt the IRS will get very far with this campaign and I imagine they are wasting "tax dollars" on these futile efforts.

Originally posted by lovebeck

On the other hand, as a person who pays taxes, it does irk me that I am paying my fair share, so they should too (as should everyone).

Well, you can scratch that itch by reminding yourself that "fair" is really just a wedge issue.