Comments on: Wacky IRS Tax Laws

By: Stray

Stray — Sat, 16 Dec 2006 23:11:32 +0000

Well, laugh if you want, but rules like this are how they nailed Al Capone.

By: Joshua

Joshua — Sat, 16 Dec 2006 00:07:42 +0000

IIRC some states have tax-stamp laws for marijuana and other illegal drugs. Buying the stamps doesn’t make the drugs legal, of course, but the aforementioned Al Capone principle still applies. Supposedly the stamps may be purchased anonymously, but I can’t imagine that very many drug dealers actually bother to buy stamps for their drugs.

By: Sean Aqui

Sean Aqui — Fri, 15 Dec 2006 17:14:26 +0000

The most famous case involving such statutes is Al Capone. They never could nail him on criminal charges — but they eventually got him on tax evasion for failing to report the proceeds of his criminal activities.

So while it seems wacky, there’s a certain logic to it.

I also don’t think the IRS is allowed to report such filings to criminal authorities. So it’s possible to report your illegal income and not go to jail. All the IRS cares about is that they get “their” money.

By: Vicki Frei

Vicki Frei — Fri, 15 Dec 2006 02:57:13 +0000

Actually, only a couple of Nevada’s counties still have legal prostitution, Nye and one of the tiny northern counties outside Reno – the name of which escapes me at this point (it’s the one where Mustang – a cathouse community – is the ONLY viable income-producing entity….)

And have to fully agree as regards the “stupidity of creating evidence against yourself just for the satisifaction of the IRS” – fortunately, most people aren’t that dim…. of course, I get to say stuff like that, since I don’t cheat on taxes or do anything else illegal (other than beat the speed limit 5mph or so) – and I’m not being facetious…. I’m still an extremely law-abiding card-carrying member of the establishment, 45 years on…. (oh well – FAR too late now….)

By: DosPeros

DosPeros — Fri, 15 Dec 2006 02:44:47 +0000

Vicki – that is a classic & informative tale of sex and taxes. Of course, hooking is legal in Nevada and so that makes it a bit more rational. What we are talking about here is really no different than reverse sin taxes. I kind of respect the “code” in this sence, it is true to the spirit of Section 61 (all income derived”) and it recognizes the reality of human nature. I actually think that unless someone was claiming tens of thousands of dollars from illegal activities, it probably wouldn’t be “reported”, but that doesn’t touch the stupidity of creating evidence against yourself just for the satisifaction of the IRS.

By: Vicki Frei

Vicki Frei — Fri, 15 Dec 2006 01:16:58 +0000

Dos – same sort of redundancy as “weird cat”?

By: Vicki Frei

Vicki Frei — Fri, 15 Dec 2006 01:15:39 +0000

I worked for the Nevada State Welfare Division late 70s – mid 80s. Lotta hookers on welfare back then…. we always “advised” them to report the “side job” income – and provide proof by notes/receipt copies from the johns…. In my 10 years there in and an Ongoing unit and later an Intake unit, I actually had one woman report (presumably) truthfully the amount she made hooking, and provide proof (notes/receipts from johns and jills – she wasn’t “straight up”) about 67% of that income.

First year I was her eligibility caseworker, she remained on welfare, being just under the limit of “real” income for a woman with 2 children. The next year, she wasn’t eligible for further assistance. By that time, it was okay with her: she wrote a book, parlayed her not inconsiderable advance into a mortgage on a 4-plex, and last I heard was doing VERY VERY WELL.

I don’t know if she reported the income to IRS. Wasn’t part of my job function – thankfully.

By: DosPeros

DosPeros — Thu, 14 Dec 2006 22:00:55 +0000

There is a certain redundancy in the title to this post.

By: sleipner

sleipner — Thu, 14 Dec 2006 21:40:43 +0000

Well, I know for a fact that many masseurs and escorts report only a portion, or sometimes none, of their income derived from those professions, especially if they have another source of income, such as a regular job (less likely to be investigated that way). Also bartenders (and probably waiters) often severely underreport their tips.