Oh sweet, so I can steal stuff Jan 1 and return it Dec 31 with no hit on my taxes. This changes everything.
The feds are actually disturbingly fair about this. You can deduct your legal fees as a business expense.
wikipedia excerpt
While embezzlers, thieves, and the like are forced to report their illegally acquired income for tax purposes, they may also take deductions for costs relating to criminal activity. For example, in Commissioner v. Tellier, a taxpayer was found guilty of engaging in business activities that violated the Securities Act of 1933.[8] The taxpayer subsequently deducted the legal fees he spent while defending himself.[8] The U.S. Supreme Court held that the taxpayer was allowed to deduct the legal fees from his gross income because they meet the requirements of §162(a),[9] which allows the taxpayer to deduct all the “ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business.”[10] The Court reasoned (and the Internal Revenue Service did not contest the point) that it was ordinary and necessary for a person engaged in a business to expect to have legal fees associated with that business, even though such things may only happen once in a lifetime.[9] Therefore, the taxpayer in Tellier was allowed to deduct his legal fees from his gross income, even though he incurred the fees because of his crime. The U.S. Supreme Court in Tellier reiterated that the purpose of the tax code was to tax net income, not punish unlawful behavior.[11] The Court suggested that if this was not the case, Congress would change the tax code to include special tax rules for illegal conduct
What about legally questionable activities? You know, from things that aren’t exactly crimes, but sure look like it? Asking for a friend
If they’re not illegal then you’ve got nothing to worry about how it looks, and you probably wouldn’t need to ask.
So I’d be really sure about the legality part, it sounds like you may possibly be engaging in a little personal ambiguity regarding the facts.
If you’re making money off of it Uncle Sam wants his cut.
That’s a great question. We can help you with that, but first we’ll need a few more details. 👀
Just be rich and pay nothing instead
https://en.m.wikipedia.org/wiki/Parallel_construction
TL;DR- if you do this you are foolish and you are going to get fucked, probably forcefully in prison.
I can not find it. Maybe I am blind, but where in that article does it say the CRA reports criminal activity to the Department of Justice?
No shit.
So, if you declare that money it is already clean?
If I declare 100m of selling coke, and pay 60m in taxs, the remaining 40m are clean?
just means you’re not committing two crimes, and as even the joker knows, you don’t fuck with the IRS
You can’t plead insanity for tax evasion. So if they get him on that he doesn’t go back to Arkham.
No, paying income taxes isn’t money laundering. Those two are totally unrelated.
Also, money laundering doesn’t make it not-a-crime to have dirty money, it just makes it harder to trace the crime. It is, in fact, a crime in itself.
It sounds odd but there was a Supreme Court about it. Essentially someone claimed they shouldn’t have to pay taxes on the profits of crime and the Court ruled they did. So they had to create a way for people to do that. For what it is worth, the 5th amendment protects you from incriminating yourself, so you are allowed to decline to provide the details of where the money came from, but it’s a bit like paying your parents for something you broke and then just not telling them what it is, and then expecting them not to look around the house.
“it would be an extreme if not an extravagant application of the Fifth Amendment to say that it authorized a man to refuse to state the amount of his income because it had been made in crime. … He could not draw a conjurer’s circle around the whole matter by his own declaration that to write any word upon the government blank would bring him into danger of the law.” … "It is urged, that, if a return were made, the defendant [Sullivan] would be entitled to deduct illegal expenses, such as bribery. This by no means follows, but it will be time enough to consider the question when a taxpayer has the temerity to raise it.”
I love how the government gets to have it both ways. You gotta report income from illegal activities, but you can’t deduct costs from illegal activities. I’m of the opinion that deductions shouldn’t be a thing at all, but I’d at least like some consistency!
Yeah there’s a logical inconsistency for sure, but I see the practical necessity of it.
That’s what ended up getting Capone too: https://www.forbes.com/sites/kellyphillipserb/2018/10/17/al-capone-sentenced-to-prison-for-tax-evasion-on-this-day-in-1931/?sh=2a73f4f27c4c
Dang.
“We’re not the cops, we just want our cut.”
– IRS Probably
They still miss the “declare here the wages you stole”
But those are already taxed as ordinary income
It’s cool if you return it at the end of the year that you don’t have to pay taxes on it. You could steal something, use it to make more money, and then return it. This avoids paying any kinda sales taxes when you took it. And since inventory is taxed you wouldn’t have to pay on that.
Someone could exploit this. Make a fake company that steals from the real company, returns the property at the end of the year.
Nice try, FBI!
Would have gotten away with it to if it hadn’t been for you meddling kids
Sort of a Ponzi scheme before it comes crashing down.
I wonder if this would work lol
Technically, if you intend to return it eventually, it’s not theft.
Theft, under the common law of England, as brought to the U.S., is the deprivation of personal property of another with the intention to permanently deprive them of it. If you don’t have that intent, it’s not theft. That’s why we have “joyriding” and “grand theft auto” as separate things.
Is there anything about the exact definition of permanent? I mean, otherwise I could just include the items in my will and refer to that.
“All items that have been subject to lending with one sided consent shall be returned to its respective owners at the end of my life.”
My first job was at a place called Cybo Robots in Indianapolis. The R&D department there created something that iRobot turned into the Roomba, when they bought the company. The entire point of the company was to lose money as a tax write off. The owner owned several other profitable companies, and needed a money sink so that he could get out of paying taxes, so he created Cybo Robots.
My point here is that not only could someone exploit this, they already are in multiple ways.
Hobbies are tough to take deductions on. They want you to form an official business to take all the deductions. Report that income though, garage sales, Facebook market and the like as well.
Europeans: You guys have to file your own taxes?
What do you mean? So do Europeans? In some countries you don’t have to if all your income is your salary and have no extra expenses.
In Belgium they also fill in the expenses automatically.
The only thing you need to do is check if anything is missing, and just not do anything if everything is correct. Which it usually is.
How can it fill expenses automatically? How can they know if something I buy is for work or leasure?
How do they know what your expenses are?
Not familiar with belgium but in Australia they don’t. It’s linked to your payroll so they know if you paid more or less that it was due, plus they have linked your bank accounts so they know if you had any interest to pay taxes on. Something similar for investments accounts too.
If you want to claim any deductions (ie. You work from home and have home office expenses) you punch them in yourself
Check the tax office’s website of the country you live in, you might be up for an unpleasant surprise. Pretty normal to have to file a tax report if you are a grown up. There are exceptions in a few countries if all your income is from salaried work and you don’t have any deductions to claim but not the norm
From a UK point of view:
That absolutely is the norm. All handled through PAYE.
Any alterations are typically handled through next year’s tax code. Normal people don’t have to get involved in the process at all. You can prod them to get any refunds sooner (say you get a big bonus and the tax ends up going out of whack), but it works out over time to the point you don’t need to.
CRA (Canada) basically fills in your info for you, you just need to authorize your account in your tax software. Doable online too. If you run a business they obviously can’t do this but if you’re an employee they have all your info.
Sure they have all your info. I’m not familiar with Canada but in other countries where this happens happens, the site tells you that you need to check that everything is correct, and that YOU are responsible for the information submitted. When you confirm you have effectively submitted your tax return, albeit with the help of a number of automations.
I’m in Australia now, and that how it works here too. Yes it’s just a couple of clicks for most people, but you are indeed doing your tax return.
I haven’t don’t it in Europe in a while, but that was the case when I was there (albeit less automated) and I’m pretty sure that’s the case in most countries
in the us they have all your info, but your employer pays an estimated amount of taxes out of your paycheck all year, and you’ve still gotta fill out paperwork about it yourself as well.
if it turns out you overpaid, which you only know by doing the paperwork yourself, and you filed taxes, you get money back from the gov. if you overpaid and don’t file, the gov just keeps your money. if you underpaid and filed, you’ll have to send them more money, and if you underpaid and didn’t file, the IRS will be coming for you.
Yes, but it is different. I’m employed, so my employer pays taxes, social security, pension fund money, and health insurance into the proper channels, and I get an “after taxes” direct transfer (which is standard here for decades now).
The tax rates the employer pays are based on complicated tables which are calculated on average annual incomes and no deductions. So they are usually higher than they would be in reality.
At the beginning of the year, we get a paper from the employer stating how much taxes they have paid out of my pay over the year. Then we can take (you are not required to, but letting this slip would be stupid) tax forms and fill them out, or use a tax software (costs about €5 and contains all the legal tricks and up-to-date information). There you can claim all things that would reduce your tax load, e.g. Text benefits for education, for having a handicap, times on unemployment, change of pay rate, office supplies you need for business purposes, medical costs (which usually is not much, because we have working health insurance, but there are co-pays and things that are not covered, like something that is a big thing for us: a fixed rate per kilometer for trips to doctors and physiotherapeuts, which is a list of several pages and alone reduces our tax load by several hundred euro).
You submit this as a paper form, or, more modern, online. We usually hear back from the tax guys a few weeks later, asking for invoices and receipts, send them in, and again a few weeks later, we get money back. As we can claim a lot of stuff (my wife is handicapped), we usually get a few thousand euro back - which is a good incentive to file taxes! But even as a normal person, it pays, as there is a form “work-related costs” where people can claim money for commuting and similar things.
As a self-employed person, one has to submit taxes for the business, of course.
What you’re describing is basically identical to what happens in the US, so not sure what is “different.”
Nothing, because the first sentence made pretty clear they’re an American
Ah yes, Us Americans with our using Euros and Kilometers. You got me!
They specifically use the currency euro in their comment…
Yeah, they say this shit but hide the addendum forms like five layers deep in a FAQ link tree. And don’t even get me started on the forms you need if you steal drugs. Like, holy shit. I hate to be a bureaucan’t, but somethings gotta change
- me: I stole a bike.
- owner: Plz, gov, help me get it back.
- me: Here, my income taxes.
- gov: Yup. We’re all goood. Bye.
- owner: wtf gov
- gov: try another gov
If you steal property, you must report its fair market value in your income in the year you steal it unless you return it to its rightful owner in the same year.
Lesson learned. Steal on Jan 1st 00:01, return to owner on Dec 31st 23:59, rinse repeat.
now if only you could learn about the financial year we would be cooking with
gassomething that doesn’t cause cancer …While the US government’s fiscal year starts in October, and many employers have fiscal years not starting on Jan 1, individual taxes are generally calculated by the calendar year. Form 1040 defaults to that unless you write in otherwise.
I feel like this is just borrowing with extra steps
Involuntary borrowing. But also nothing stops you from stealing it again on 01-01 @ 00:01.
