IRS Employee Stole Data To Forge $8M In Fraudulent Returns

In America... by whoever57 · 2012-02-10 12:37 · Score: 4, Funny

In America...
you tax IRS!

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The real "Libtards" are the Libertarians!

Cheaters by Nidi62 · 2012-02-10 12:40 · Score: 2, Funny

They don't just try to cheat us, they try to cheat each other!

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Re:Cheaters by Anonymous Coward · 2012-02-10 15:07 · Score: 5, Informative

I have a big problem paying taxes the way they are.
The IRS can go straight to hell. Nowhere else in America are you guilty till proven innocent and due process does not exist. You can be put in jail with all of your assets seized, which greatly inhibits your ability to defend yourself. Unless they really do charge you criminally, you are not provided with a defense in a case where you already guilty.
Add to this the fact that the average IRS is a fucking retard when it comes to accounting, tax laws, corporate structures, etc. and they still have the ability to outright destroy your ass with their ignorance, in many cases with no oversight or accountability .
I speak from experience. When you are in an oil and gas state and you can get some arrogant sociopathic retarded fucktwat from several states away who thinks he knows about your industry better than accountants and regulators and incorrectly over charges you millions, it might piss you off. Just a little.
Fought it in court viciously for over 9 years at the cost of nearly a million dollars. In the end, other people in the IRS were finally brought in to audit it, and lo and behold, they were wrong the whole time.
Made those fuckers pay interest and on the wall in the office is a framed check from the IRS for well over 7 million dollars.
Rot In Hell.
I am not surprised at all by this. Not even the slightest. What I am surprised about is that they don't catch them doing it more often.
IRS needs to be completely razed to the ground and a new system put into place. No wonder I am big huuuuuggge fan of taxing consumption and not wealth. Not only is it passive to citizens, but a hell of lot easier to understand. Disagree with me for sure, but that fucking group of psychopaths needs to be taken care of.
Re:Cheaters by cforciea · 2012-02-10 15:20 · Score: 2, Insightful

Consumption taxes are not inherently simpler than income taxes. The core reason behind conservatives arguing constantly for a flat consumption tax is that they are tired of progressive taxes and really would prefer taxes to be regressive. It has very little to do with the IRS or your plight.
Re:Cheaters by Tanktalus · 2012-02-10 15:49 · Score: 2

You're too subtle for me. Stop beating about the bush and tell us how you really feel!
Re:Cheaters by ScentCone · 2012-02-10 16:33 · Score: 4, Insightful

tired of progressive taxes and really would prefer taxes to be regressive
Nice straw man there. No, not regressive. Flat. Telling half the people in the country that they don't need to pay income taxes is no way run a civil society. Not if they still get to vote, anyway.

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Re:Cheaters by TubeSteak · 2012-02-10 17:37 · Score: 3, Informative

Consumption taxes are not inherently simpler than income taxes. The core reason behind conservatives arguing constantly for a flat consumption tax is that they are tired of progressive taxes and really would prefer taxes to be regressive. It has very little to do with the IRS or your plight.
I had a back and forth, about taxes, in another thread with a /.er whose rebuttal was
"The founding fathers didn't institute a progressive income tax"
The fact is, consumption taxes (and/or tariffs) were enough to support the Federal Government's expenditures for the first ~85 years of its existence.
Now, a universal flat tax is just a massive giveaway to the richest Americans and a massive taking from those least able to afford it.
Not even Hermain Cain's 9-9-9 survived as a universal flat tax.

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o0t!
Re:Cheaters by wrook · 2012-02-10 20:51 · Score: 2

You are right to say that a flat sales tax is simpler than a progressive income tax (and probably that was what the OP was talking about). I just want to point out that consumption tax can, indeed, be more complex than income tax. If you implement a consumption tax similar to Canada's "Goods and Services Tax", everything is taxed at every stage through the process. It is impossible for the consumer to know what percentage of the price is tax.
Here is an example. A farmer produces wheat and sells it to a distributor. The distributor pays 10% flat tax. The distributor then sells the wheat to a mill. The mill pays 10% tax (including 10% of tax that the distributor paid). The mill sells flour to another distributore. The distributor pays 10% tax (includine 10% of the tax that the mill paid), etc. What often happens in this scenario is that the person selling gets a rebate for the tax that they paid on things that they sold. This is somewhat complicated, but what is very complicated is for the government to track all of this to make sure that nobody is cheating. Basically, the cost of implementing the tax goes up.
Much simpler is a flat income tax (including flat corporate tax). Banks withold 10% of returns on investments. Employers withold 10% of paychecks/bonuses/cost of perks. Businesses pay a flat 10% on profit. It is *very* simple for everyone to understand. If you allow no deductions at all, it is incredibly simple.
The advantage over consumption taxes is that everyone pays the same percentage. With a consumption tax, poor people spend every cent they make (often more, since they are in debt). Rich people don't (they have money in investments). Pretty much the definition of poor and rich. Thus, poor people actually pay a greater percentage of their income on tax than the rich (anti-progressive?)
The downside of a flat income tax is that rich people/corporations who are used to fiddling the system to avoid tax will leave the country, taking jobs with them. Also, the cost of implementing the tax is offloaded primarily to businesses, which they don't like.
I've lived in a country which had both flat income tax and a consumption tax. Even though I was poor at the time, I liked the system better than a progressive tax. The consumption tax was also invisible (integrated into prices). Even though this is pretty much the opposite to what anti-poverty groups advocate, I liked it better. It was really easy for me to calculate my income/outgo. My job was advertised with the after-tax amount and my expenses were all advertised with after tax amounts. It is much, much easier to understand what's going on.
Re:Cheaters by TheRaven64 · 2012-02-10 23:00 · Score: 5, Informative

No, they're people with a basic grasp of economics. A person earning minimum wage has to spend all, or close to all, of their income on things that will be taxed with a consumption tax. A person with a comfortable middle class income will be able to spend maybe half of their income on taxable things and invest the rest. A wealthy person only spends a tiny fraction of their income. Therefore, the poorest a person is the higher a percentage of their income is paid with a consumption tax.

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Re:Cheaters by ScentCone · 2012-02-11 02:28 · Score: 2

Consumption taxes are inherently regressive
No, they are inherently flat. Or, are you saying that a person who earns $50k a year is going to pay (for example) $1 in sales tax on package of toilet paper, but a rich guy is only going to pay $0.50 when he buys it? Does the rich guy get a discount on his toilet paper sales tax because he just paid a big pile of sales tax when he bought the fancier car, or services from a more expensive wedding photographer?

Or are you thinking of a sales tax as an income tax, and you're calling it "regressive" because that $1 in tax is a higher percentage of a poorer guy's annual income? If that's your take on it, then why aren't you complaining about the fact that vegetable prices are regressive? And that the price on a pair of shoes is regressive? If the fact that the cost of being alive is "regressive," then why aren't you proposing to confiscate the earnings of all people who make more than the next guy, and spreading it around so that each and every product and service (including the cost of running a government, buying some carrots, and going to a soccer game) hits everyone's net bottom line exactly the same at the end of the year? Wouldn't that be more fair? At least a few stupid chumps would still wake up every morning with a work ethic and produce things despite being slaves to such a system, so things shouldn't get too bad.

Or do you see government as something that everyone should get to control through their votes, but which only some people should have to pay to run?

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Don't disappoint your bird dog. Go to the range.
Re:Cheaters by ScentCone · 2012-02-11 02:36 · Score: 3, Interesting

i didn't know there were that many people living on capital gains.
OK, so you hate people who've risked money making investments. We get that. But do you really think everyone else is so stupid to think you're saying anything of substance? Roughly 50% of the population earns money below the rate that the Congress has set as meaning they owe incomes taxes, and many of them receive "refunds" on money they don't even pay. They don't pay income taxes, they pay negative income taxes. A small number of rich people pay the vast majority of the country's income taxes, and middle class people pay the bits that are left over. The other half of people pay none. Of course you know that, and you're a troll.

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Don't disappoint your bird dog. Go to the range.
Re:Cheaters by ScentCone · 2012-02-11 02:45 · Score: 3, Interesting

A wealthy person only spends a tiny fraction of their income.
And when they do, it's on stuff that is taxed much more aggressively than things like rent, food, and utilities. The rich guy is also paying, usually, mammoth amounts of property tax, and will usually have a very large chunk of his assets gobbled up as a death tax.

If you're worried about percentages, why aren't you proposing that all of the other things in life - not just the cost of having a government - are also "regressive" in the way you've chosed to describe things? A bag of chips at the store is also regressively priced, relative to income, isn't it? Outrageous! Unfair!

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Don't disappoint your bird dog. Go to the range.
Re:Cheaters by GNU(slash)Nickname · 2012-02-11 03:23 · Score: 2

If you implement a consumption tax similar to Canada's "Goods and Services Tax", everything is taxed at every stage through the process. It is impossible for the consumer to know what percentage of the price is tax.
Here is an example. A farmer produces wheat and sells it to a distributor. The distributor pays 10% flat tax. The distributor then sells the wheat to a mill. The mill pays 10% tax (including 10% of tax that the distributor paid). The mill sells flour to another distributor. The distributor pays 10% tax (including 10% of the tax that the mill paid), etc.
GST is not a compound tax, it's a value added tax. Every bill that I pay gets split into two accounts - a "GST paid" asset account and an expense account. Every invoice I collect is split to a revenue account and a "GST collected" liability account. At the end of the period, I simply remit the difference between the two GST accounts.
Here's my example. Let's say a white box supplier buys $400 worth of components and sells me a $500 computer. They collect $25 GST from me, pay $20 to their supplier, and remit $5 to the government. (Let's ignore import/export issues for now and assume that the original supplier remits the entire $20.)
Now I take that computer, install Linux, slap my brand on it, deliver it, set it up, and feed your dog while I'm there. I charge you $700 + $35 GST, When I file my return, I remit the net GST of $10 as well. So a total of $35 in GST was remitted to the government from the supply chain, which is exactly what you paid.
If you were a GST registrant and decided to sell that computer along, but only got $600 for it, you would be able to claim a refund of $5 ($35-$30, or 5% of $700-$600) as well. If that was your only sale in a reporting period, you would actually get a $5 cheque (well, direct deposit) from Revenue Canada.

What often happens in this scenario is that the person selling gets a rebate for the tax that they paid on things that they sold. This is somewhat complicated, but what is very complicated is for the government to track all of this to make sure that nobody is cheating.
Actually, GST has definite advantages in that regard. Invoices must clearly show the amount of GST charged and the registrant number, so an audit has a good paper trail to start from. And business are motivated to collect GST so that they can recover their input credits. It's also easy to cross reference to your income tax return as well - if you aren't remitting about 5% of your gross profit, a red flag goes up.
Re:Cheaters by ScentCone · 2012-02-11 07:21 · Score: 2

So it doesn't bother you that poor people pay a higher percentage of their income in taxes?
You mean right now? They do not, because they don't pay any income taxes. Do you mean in flat tax scenario? No, it doesn't bother me any more than the fact that they also continue to pay (as they do now) a higher percentage of their income for shoes and socks, would also pay a higher percentage of their income for the services of a plumber, and would pay a higher percentage of their income for the services of their government. This is also true if you compare somone making $100k a year to someone making $200k a year.

The situation is that the less money you make, the bigger a percentage of your income that all of your costs represent. Period.

So, let's talk about what you're really complaining about: you don't like the fact that some people make more money than other people.

You're ok with that?
Let's turn is around. Let's say that you and I have the same job, work the same number of hours, earn the same paycheck, and pay the same taxes. So far so good, right? Now, let's say that I like to take my weekends to enjoy time with my family, pursue a hobby, relax, etc. Great! But let's say that you spend your weekend putting in 20 hours towards a second job or running a small business on the side. Maybe you sell hotdogs on the street, maybe you're a fine artist producing expensive paintings - doesn't matter. But all the sudden, your tax bracket jumps (to satisfy those who think that progressive rates are a good thing).

Now, you go back to work on Monday, right next to me. We continue to earn the same paycheck. But now, I get to keep more of that paycheck than you do. Why? Because you're working harder, and you are punished by the progressive tax code for doing so. You take it on yourself to generate extra income and put in the time to do so, but out of every dollar you earn standing right next to me doing the same thing, you must surrender more of it indirectly to me because your higher tax rate is being used to subsidize my lower one. Thanks for working extra hard, phantomfive, so that you can pay some of my taxes for me!

Sounds good? Because it really sounds like that's what you're saying.

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Don't disappoint your bird dog. Go to the range.
Re:Cheaters by roman_mir · 2012-02-12 19:55 · Score: 2

"no deductions"? So you run a business, hire a few people, pay their salaries and can't deduct their salaries from your revenue before showing the profit?
Can't deduct business expenses against revenue?
Ha! Under those conditions nobody would ever run a business.

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You can't handle the truth.
Re:Cheaters by roman_mir · 2012-02-12 20:03 · Score: 2

. Even a progressive income tax isn't really more complicated. ..
I stand by my initial assertion.

- well, you are free to stand by your totally wrong assertion, it's your business.
Collecting papers over the year and having to FILE taxes at the end and then having to battle against IRS and having possible jail time and fines .. NONE OF IT is an issue with consumption tax.
You come to a store - it's in the price. The only people that can make a mistake are owners of the store and 90% of population are not owners of stores.

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You can't handle the truth.
Re:Cheaters by roman_mir · 2012-02-13 01:31 · Score: 2

Again, if individuals do not have to file any papers, do not have to keep track of any papers, it immediately is INFINITELY easier for them than having to do any of it.
Store is a business. They already have to keep track of their paperwork just to know what's going on in the business, keeping track of accounting, receivables, payables, everything, taxes are a small part of what stores do anyway for profit.
People do not do accounting like that for profit, they only do any of it because the government forces them, and it's easy to see how much time and resources is wasted on it every year. Every person who files this shit every year spends hours if not days putting it all together, paying for it either for software packages or maybe going to an accountant.
Spending time at an accountant, having to keep track of papers that do NOT make that individual any profit, that paperwork is ALL for the sake of government pleasure of stealing from individuals.
Stores and other businesses already have accounting because they must know how the business is doing, so some extra paperwork for them is less of an issue, they already do it all anyway, so from hundreds of millions of people spending hours or days (at least an hour for sure, but in most cases a couple of days at least) is thousands of millions of hours spent every year.
Then there are all the tax accountants and tax lawyers, and then there are IRS audits and courts and fines.
And you are still standing by your bizarre assertion that doing that is not inherently more complex than coming to a store because you need to come there anyway, and paying the tax in the store as part of the purchase and never having to deal with any of that again?
Ok then, I won't argue this stupid point any longer.

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You can't handle the truth.

It really never ceases to amaze me.... by mark-t · 2012-02-10 12:50 · Score: 4, Interesting

...that the people who do this kind of crap somehow genuinely figure that they won't ever be found out.

Why is it that you so rarely hear about crimes where the feds haven't been able to actually figure out who actually did it?

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File under 'M' for 'Manic ranting'

Re:It really never ceases to amaze me.... by izomiac · 2012-02-10 14:06 · Score: 3, Insightful

The best criminals are smart enough to make it look like a crime never occurred, and there are probably a fair number of these (not an extraordinary number, there are lucrative "honest" lines of work for smart people). This guy probably though he could pull that off.

The article isn't too explicit on the details, but it sounds like he used his position and expertise to identify 29 people who were [dumber: weren't] eligible but didn't file [dumber: yet] for substantial tax returns. Then, he used the data he had (e.g. name, social security number, finances, etc.) to file those returns, with the refunds going to accounts under his control. (Smart: setup accounts in the proper recipient's name and state, Dumb: setup the accounts in his own state/name.)

This was an all-or-nothing crime. Either it's never discovered or he's caught. Who knows if he's the first to have tried? And, for those wanting his head, it wasn't a horrible crime. It's stealing, since it's not his money, but the victim is hard to identify (the people not claiming refunds? the government for relying on ignorance/apathy to not refund extra taxes inadvertently paid?). The stiff punishment is likely related to how close he was to getting away with it and how much he almost got (i.e. to make the risk greater than the reward).
Re:It really never ceases to amaze me.... by Tharsman · 2012-02-10 15:13 · Score: 2

It's naive to think that having most prosecutions convicted means most occurrences even get prosecuted.
Most crimes of this type never get caught. Heck, no one even finds out they happened in the first place.
Re:It really never ceases to amaze me.... by rachit · 2012-02-10 15:15 · Score: 3, Insightful

You know, there is never just one cockroach...
Re:It really never ceases to amaze me.... by epine · 2012-02-10 19:30 · Score: 4, Interesting

This is the perfect crime for an early season of the Sopranos, which featured several episodes where "degenerate" businessmen engaged in acts of crime they couldn't refuse. One involved an executive at an HMO, another involved a sporting gear franchise. Difference is that the screenwriters probably weren't bold enough to make this one up.

And, for those wanting his head, it wasn't a horrible crime. It's stealing, since it's not his money, but the victim is hard to identify ...
David Rose on the Moral Foundations of Economic Behavior in which he discusses his new book by that title.
From the very loose transcript (my emph.):

[W]hat is required to live that way, doesn't require twenty hours of schooling. It requires many years of continuous reinforcement in order to build the character to produce the moral conviction behind a belief, but the beliefs themselves are pretty simple. Don't do stuff, don't do negative moral actions. Just don't do them; and just because nobody gets hurt, that doesn't mean you can do it, either. Because it's not about the person who is getting hurt or not hurt; it's about you. If you steal, even though nobody gets hurt, you are still a thief. So don't do it. Period. Don't even consider it. Don't even run it up the flagpole. That's not that complicated. And then secondly, if somebody says to you that you should do something that you know is wrong but it's okay to do it because there's this other good thing over here that you can make happen if you do otherwise, you need to realize that that is the language of a charlatan, that that is inappropriate, that you are being sucked in.
By the time you start rationalizing about the diffuse nature of the victim, moral laxity is already half-way up the flag pole.
David Rose knows your type:

The amount of cheating has never been zero, of course, but it has gone up dramatically in the last 25 years. Moreover, in the past when you asked students why they cheated and they explained why they cheated, they almost never excused the cheating; they never downplayed the moral import of it. They would say it was wrong but they had to do it. Today, though, increasingly--I don't remember the proportion but it's a shockingly high proportion--most of them report cheating at least once; and a shockingly high proportion of those who report cheating at least once say: What's the big deal? In other words, they make an argument that is very consistent with the absence of principled moral restraint. Because their argument is: I cheated; so what? Nobody got hurt. I didn't take anything from anybody. Nobody's worse off. Teacher's not worse off; I'm certainly not worse off; nobody in the class is worse off; what difference did it make? And the answer of course is, at that margin it makes no difference at all. But my point is that it's indicative of a shift in moral beliefs themselves, the way we organize our thoughts, and it's very frightening.

Dumb plan by tukang · 2012-02-10 12:50 · Score: 3, Informative

According to the DOJ, Richardson admitted that the tax returns were prepared without the authorization of the 58 taxpayers listed on the tax returns. All of the returns directed that the IRS pay the money to one of Richardson's bank accounts.

I imagine a red flag was automatically triggered by the 58 returns going to one bank account. As a side note, I know people who write code for the Federal government that checks for irregularities like this and they do that for a living 40 hours a week, so if you're going to try to scam the IRS you have to be at least a little clever.

Re:Dumb plan by Sir_Sri · 2012-02-10 14:12 · Score: 2

The red flag might have been a single employee doing a particularly large (or small) number of returns or returns of the wrong general value, in a 2 day period. Granted at 59 returns it's 130k per return, but that would mean this guy happened upon 59 filings from the top 1% of wage earners (the top 1% in the US now is around 300k/year in income so for 2005 tax returns paying out 130k should be relatively rare, unless you work on those, and if you work on the ones with big money I'd expect you to get more scrutiny).
The article suggests but doesn't explicitly say he was caught because the SSN's he used were for single people, not married people and he was filing jointly or problems like that, so the automated tools caught some of it.
It also looks like they caught this on the 8th return, not the 59th. They only paid out on 7 claims, before they realized something was up.

I wonder if there's a hole there by v1 · 2012-02-10 12:53 · Score: 3, Insightful

Richardson used his inside knowledge of IRS operations to commit his crime,

So I wonder what aspect of "insider knowledge" he used? Logins and passwords? back doors? social engineering? test accounts? phone numbers to helpful clerks that don't think about what they're being asked to do? secret URLs?

Is there a back door that anyone with similar "insider knowledge" can use, that's not a hole that's closable with say a simple password change? (has the hole been closed?)

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Re:I wonder if there's a hole there by treeves · 2012-02-10 12:59 · Score: 4, Funny

According to your sig, you also work for the Federal government, so you'd better be careful asking such questions!

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...the future crusty old bastards are already drinking the Kool-Aid.
Re:I wonder if there's a hole there by treeves · 2012-02-10 14:25 · Score: 2

Modded Interesting? Thanks for the karma, but I don't really need it, and it was a *joke* (all good jokes have some element of truth of course).

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...the future crusty old bastards are already drinking the Kool-Aid.

Re:Obvious answer.... by martin-boundary · 2012-02-10 12:54 · Score: 4, Funny

Crucify him!

Oh. I was going to say "Does he have internet access in prison? Can slashdot interview him?". But crucifying is probably more humane...

Re:IRS by roman_mir · 2012-02-10 13:19 · Score: 2

A little typo: I don't mean to imply that identity theft is a 'correction' of the IRS fraud, only that what IRS does on daily basis is fraud and this guy is just a small part of that entire fraudster operation.

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You can't handle the truth.

Eight million dollars?!?!? by sootman · 2012-02-10 13:22 · Score: 5, Funny

Wow. That's like... four illegal downloads!

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What is the tax rate on ill-gotten gains? by NotQuiteReal · 2012-02-10 13:57 · Score: 2

Hypothetical, say you are a criminal, but want to avoid the fate of Al Capone and get busted for not paying your taxes. Can you use the capital gains rate if you have some sort of fraud that takes more than a year for the payoff?

The best would be some sort of crime that pays off after the statute of limitations, and you only have to pay the lower capital gains rate. Win Win Win!

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This issue is a bit more complicated than you think.

Re:This is bullshit by Anonymous Coward · 2012-02-10 14:30 · Score: 2, Informative

105 MONTHS in prison, not weeks. Just a bit shy of 9 years.

financial crimes often go unreported by decora · 2012-02-10 14:31 · Score: 5, Informative

1. a lot of financial institutions would rather not it be public knowledge that they have problems in their security systems, etc. they try to hush things up without getting the cops involved.

2. the cops sometimes will collude with them to hush things up. see 'The Asylum' by Leah McGrath Goodman and NYMEX (yes, NYMEX from Trading Places)

3. at the highest echelon, the notion of what is legal and illegal gets distorted and fooled with, by lobbyists, payed-for intellectuals, and the super rich. so that to date there has been little-to-no prosecution of the people in the CDO, mortgage securities, robo signing, foreclosure fraud, and housing bubble system. experts and authors like Roger Lowenstein spill buckets of ink trying to prove that no crime took place, even though 2 trillion dollars magically disappeared into hedge funds and investment banks offshore accounts in 2008, with the help of the taxpayer.

4. take number 3 and just ... multiply it. well. did you know, for example, that the guy who ran Nymex was, directly before he ran Nymex, the head government regulator of Nymex? And that he let Nymex do stuff that it shouldn't have been doing, and then they hired him out of his government job and gave him a huge raise? there are thousands of cases like that that never receive media attention.

in other words, people DO get away with that sort of thing, all the time.
and the best way to get away with it is to have something like 'CEO' or 'Board Chairman' on your resume.

Re:financial crimes often go unreported by Anonymous Coward · 2012-02-10 22:10 · Score: 2, Insightful

FWIW, being a lowly anonymous coward: I worked for large multinational bank, and low-level petty thieves in the system (trying to cash checks under stolen identities, steal money orders, etc.) are *always* dismissed without police prosecution. Furthermore, this is widely known amongst employees, some of whom attempt to take advantage of the PR-shy policy. But there are massive amounts of checks and balances between multiple departments and heavy security to try to guard against loss as much as possible, making it very difficult for a lone perpetrator to get away with pocketing much. On the other hand, nepotism and cronyism run rampant in the banking industry, so if you have three or four collaborators covering up each other's thefts working from different departments and floors, that's when the take gets juicy.

Re:This is bullshit by timeOday · 2012-02-10 14:37 · Score: 2

You know, as much as I would not like to waste 2 years of my life in prison, I think I'd be even more worried about the rest of my life, as a felony convict. In these days of less-than-full employment, it's not like you can just rider over the next horizon and start over. Convicted felons are truly screwed for life employment-wise. They can't even get food stamps.

Re:They get greedy. by Anonymous Coward · 2012-02-10 15:13 · Score: 3, Insightful

After watching Top Gear I'd settle on Vietnam. Looks beautiful and friendly and has no diplomatic or extradition treaties.

Everywhere looks "beautiful and friendly" when you've got a massive production team running around making sure everything goes smoothly (and an editing team for when things don't).

Re:If the IRS accepts your taxes on crime... by subreality · 2012-02-10 18:46 · Score: 4, Interesting

...isn't that implicit approval that what you did was legal?

No, that's implicit approval that you didn't also commit tax evasion.

The rulings are pretty self-consistent. You can even deduct the expenses for your illegal business:

"While embezzlers, thieves, and the like are forced to report their ill-gotten gains as 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.[7] The taxpayer subsequently tried to deduct from his gross income the legal fees he spent while defending himself.[8] The 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.[11] 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 Tellier court reiterated that the purpose of the tax code was to tax net income, not punish unlawful behavior.[12] The Court suggested that if this was not the case, Congress would change the tax code to include special tax rules for illegal conduct.[13]" -- https://en.wikipedia.org/wiki/Taxation_of_illegal_income_in_the_United_States

Re:They get greedy. by El+Torico · 2012-02-10 20:23 · Score: 3, Insightful

Everywhere is beautiful and friendly when you're very rich.

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In the land of the blind, the one-eyed man is usually crucified.

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IRS Employee Stole Data To Forge $8M In Fraudulent Returns

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