Why the IRS asks taxpayers about income from illegal activities
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- Опубликовано: 10 апр 2024
- Why does the IRS require people to report income from stolen goods and illegal activities? The answer involves 1920s mobsters and a nearly century-old U.S. Supreme Court ruling.
If you do report on your taxes, you might not get in trouble. But if you don’t, you could be charged with tax evasion.
🎥: Chris Vazquez / The Marshall Project
#shorts #taxday #taxes #tax
Even the Joker pays his taxes...
I'm crazy eneough to go up against Batman but the IRS Nooo Thank you!!
I always wondered how now I know.
Too true. Don't mess with the IRS
It's not about the money it's about sending a message
Yeah even the joker doesn’t want to mess with the irs
Wait does this mean that if I pay tax for illegal activities they aren't going to investigate me for it?
The *IRS* won't have grounds to investigate you for *tax evasion.* But IRC Section 6103(i)(1) says that they can share your returns with law enforcement as long as they come with a court order.
exactly, @@GSBarlev. thanks for answering!
@@GSBarlevgood thing tax evasion is morally correct
@@osles3917not really only when the money is lining the pockets of politicians, but taxes litterally give us free public education, road commission, and a lot more so when youre not paying taxes sure politicians arent getting their stupid money but neither is the programs that are actually tax funded
@@theshedproductions. So, tax evasion in the vast majority of countries is morally right, good
Technically the IRS can do all of this for you, but private interest groups lobbied hard to prevent it.
yeah, ProPublica (a fellow nonprofit news outlet that's at times our reporting & publishing partner) has long reported on TurboTax's fight against free & simple filing
The IRS still offers a tax filing program on their website. Also, even if you make a mistake while filing your taxes, the consequences are way lesser than what many think they are.
Aren’t they recently piloting a tax program in some states this year?
They know about that Snickers I stole? Those guys are good
@@TheMarshallProjectcorrect, whenever politicians get together to sign new bills into law, there should be a jury of normal people to ensure that law sounds just, so lobbyist can’t screw people over for their own nefarious purposes
The IRS is like "We dont care so long as we get our cut."
1000%!
"Deal me in brutha!"
Well you know what they say. They can't get me for stealing, but they will get me for not paying my taxes...
The government doesn't care about stopping crime as long as they get their cut too.
??? This is to catch either
A: people stupid enough to actually report and then arrest them for what they self incriminated
B: make it easier to arrest/investigate those under suspicion of illegal trades for tax evasion
You’re literally stupid bruh
They still go after you for the crime though. Like with Al Capone.
That's like you working all your life and you earned it sweat and tears and for someone else who doesn't even know what you went through to demand you give them a cut 😕 it's wild ASF
nah it's more just, if your don't report your income from crime you get hit with tax evasion, if you do report it and pay the tax you are handing over evidence for the popo to come get you. Either way you're being charged
IRS is doing the equivalent of "I'm going to close my eyes and ask for 30% of everything else you made, and as long as you do it now, I won't ask where you got it from"
To be fair, it's not the IRS' job to care where you got your income. If you're doing something illegal to earn the income, that's another part of the government's job to figure out and do something about.
You don’t think they’ll forward information about drug money or money laundering or other illicit activities to the police or fbi? I can answer that for you if you want
@@farmerthatflies Bro, there's literally a part of your taxes to report income without stating origin, did you watch the video, or- ?
You ever heard the phrase “automatic audit”?
@@farmerthatflies Easier to lie about the source than the income itself. Fuck around smart.
All I’m saying is that the IRS is annoying enough it drove a guy to kamikaze into their office in a small plane.
Explain
@@twentyninedoesnotlastforev5455A guy flew a piper into an irs building, not much to explain.
@@Schnipah Yeah but like, could you explain it in Fortnite terms?
@@TheLawsIsHere bro flew his plane to tilted towers
@@Bread15282wrong plane incident.
In short: The IRS doesn't care where the money comes from as long as it's taxed.
So, basically Saul Goodman's speech about needing to launder your money so it can be taxed is bullshit.
The best part is, there are plenty of legal means of acquiring money that fall under "other"
You stole my heart for sure, but it was while you were in DC at The Washington Post, so as long as you file it under "Capital Gains" you should be fine.
the real tax write-offs are the friendships we capital gained along the way
"Other income"
Exactly. It's not the government condoning illegal activity, it's the government saying, "Where'd this money come from!? You have money you didn't pay taxes on!?" and you didn't report it because, well, that would expose your illegal activities... Also Capone was caught and convicted the same way as Manly/Manley: no proof beyond a reasonable doubt he was committing crimes despite everyone knowing he was doing it, but plenty of evidence of tax evasion. He was murdered by an inmate, possibly someone from a rival gang.
Even the Joker fears the IRS
"We're fine with crime, just pay your taxes"
This literally means that crime pays.
Yeah no that sounds about righrg
How do you think poloticians get away with it?
Criminal enterprise is unironically an important part of an economy past a certain size
They are allowed to share documents with other law enforcement agencies as long as there is a court order. The IRS doesn't have jurisdiction over your drug and murder ring, but other agencies do.
It's not the IRS co doning crime. It's moreso, "You have more money that you didn't report/pay taxes on!?!?" and you didn't report/pay taxes on it because, well, that would likely expise your illegal activity. However, the "other" section covers plenty of legal means of acquiring money too, so reporting illegal money under "other" isn't actually exposing your crimes, but the FBI and other law enforcement agencies will use it as evidence of your crimes(the IRS can share report documents with other agencies as long as there is a court order). So, as long as you aren't being currently investigated for the illegal activity you're doing and you don't get audited, your illegal drug ring is safe.
I'm crazy enough to go against batman!
But the IRS?
Noooo thank you!! 😂
You mean Scott Morris or April?? Cause Batman could be all kinds of people. Stupid
I'm POSTer
The government cares most about you paying tax
And being fit for duty/service so they don't have to go to war themselves....
So there is a costume budget
Damn looks like I need to pay 509.5 million dollars to the IRS
Anyone else want to remind me how this system is completely logical and not at all lost in its own soup.
then why does money laundering exist if you can report your illegal income?
someone else left a comment about law enforcement being able to seize people's tax returns, and if you have a bunch of money listed in the "other income" section consistently, they may do something. Money laundering would make the illegality much more difficult to discern while potentially also allowing for a lower tax rate. Don't quote me on the last part though, I'm no expert.
Its mostly so that banks think the mkney is legal
Probably raises some eyebrows when someone who makes 66k a year reports 3 million dollars in other income
That's what money laundering is. Making your income seem legit and pay taxes on them.
Because auditing exists.
Government wants their piece of the criminal activity.
Shouldn't that mean the IRS is involved in criminal racketeering?
then the irs would be going to jial then . for unaliving people.
Interesting, though I can imagine the IRS would get curious if someone's "Other Income" category is a lot larger than any of their other Income Sources. Cause it would be pretty suspicious while reporting your Taxes, for the Other Income, to be like 50% higher than everything else combined.
Obviously that wouldn't be grounds to say "yep! They a criminal" but not many people would be making more money through alternate means, than they would via their job
that's why money laundering is a thing.
Me reporting all my incomes under "other income":
So the thing that is actually seriously affected by this is the sale of Cannabis in state's where it is illegal. Because it is illegal at the federal level it counts as illegal income but legal dispensaries still have to report their income
ANY source of income must be reported. Found $20 in a parking lot? That’s Taxable!
its funny how its used all the time to snag stupid criminals, and smart ones just file it as a hobby business that doesnt even need to be filed.
meanwhile... continously printing money and sending it to countries that havent paid a dime back in interest let alone any respectable % of return on investment, or oversite/accounting for the fiat being sent.
The IRS doesn't care where the money came from. They just want you to report your income accurately.
Tell the IRS, If money is baked by credit and dollars are IOU's then that means I made debt and got no income. These means that you are taxing debt and creating more debt as a result 0_0
They want their cut no matter what the source is... let that sink in...
Yeah, he's been knocking for hours
So, the taxes can get you, but not the judge? America is crazy
The irs shold be held accountable for taxing illegal money
So it’s like “I did something illegal, but I’m not telling you what it is”
but like, if it's already illegal money why report it, like genuinely, like "they can ckme after you for tax evasion" ok but why would they if they have no way if knowing this money exists
Cause criminals are usually kinda dumb and stores will note big cash purchases.
That's why money laundering exists, to fix that issue
The irony of telling someone it's illegal not to declare money you got illegally 💀🤦🏾♂️🤣
What kind of wierd dystopian 3rd world backwater tries to tax illegally gained money or even money from gambling? I am glad i live in a secure 1st world nation where we dont do anything like this.
Crime doesnt pay.... except when it does.... then you have to pay for that crime.... in taxes.
I'm crazy enough to take on Batman but the IRS, noooo thank you
When potentially doing something illegal, think of how much of what you make would go to taxes.
Now pay your taxes, and continue on!
So by that logic when a drug dealer is arrested he can be charged for drug trafficking and not paying taxes.
IRS: TAXES IS TAXES
Wait so whats the point in money laundering
Also Tax evasion has a presumption of guilt rather than innocence (At least in my country)
These psyops are getting wild
"we dont care if you commit double homicide, or rob a bank, as long as you pay your taxes"
- IRS probably
Bro what!? 💀😵💫😭
Washington Post has got competition.
So if im a hitman and earned 50k from killing they wouldnt report me if reported this money to the irs
We don't care if sell drugs, just pay taxes
IRS, I know you're watching. My ex, Michael Scott travaille, has been making money from stolen goods for over 10 years. He lives in Iowa. He and his family have over a million hidden from y'all.
Irs don't care, they just want that bag
I will never report anything to the irs. If you have a problem with this come and find me
I love how the cops were so fucking crooked that he got away with all that shit, but the motherfucking IRS was having NONE of that shit lmao
Do I fear them? Do I respect them? Maybe a bit of both. They go hard af, that's for sure. But also going to jail is so terrifying to me if I mess up taxes lol 😅
How did my dad not get sent to jail?
the irs does not fuck around
Me, too lazy to break the law: interesting
The TAXMAN cometh
Well going against Law Enforcement or IRS we all know which is the better choice. Even Joker fears the IRS.
You may not be telling them specifically what you did, but unless there is some sort of firewall in place, what's to stop the feds from using "other income" reports to trigger investigations?
200,000,000, of "other income"
They take money you never owed them in the first place 🤦🏾♂️ who's the real crooks and gangs police and the Governments 🙆🏾♂️ we have not realized it yet as a whole community but im teaching my kids every way to avoid them at all cost 🤌🏾
Do I need to report the $40 worth of weed I sold my friend?
Does that mean that laundering money is kinda useless, ah about time they nerfed that strat anyway
These jumpcuts are giving me a headache lol
IRS just tryna so their job, they ain't no snitch
Illegal taxes include rec drug sales in states that allow it as illegal in federal level
I found a 20 up against a curb one time...
So hypothetically, can you get away with criminal acts, still report and pay tax on the money, then just refuse to elaborate on what crime you are doing to earn the money?
They can’t just arrest you on the charge of “we don’t know what crime you did, but it’s illegal!”
I imagine they could still confiscate it all under forfeiture as the system is built with the presumption of guilt, which kinda goes against the constitution. We should not have to prove where our money came from, that’s their job.
The last part about it not being used against you is only half true. There was a case where someone listed the source of their illegal income and it was used against them. They appealed and it was basically ruled because they listed it, it could be used against them and it wasn't a 5th Amendment violation because they didn't have to list it.
Even if Cannabis is legal at a state level, because it's illegal at a federal level
Tax reports by Dispensaries and their employees technically falls under this too
So on a federal level Cannabis and illegal drugs are the same type of income
Do I have to disclose what the illegal activity was? It might just male sense to pay it. Tax people don't fuck around but the rest of the government does. If I wanted a government to be looking for me for something I did, I'd want it to be the cops looking for me more than the tax man
its also for weed stores, legal per state but illegal federally
You’re dumb if you report that… just gives authorities another nail in your coffin.
What is a taxes? Is that like a state or something?
explained it makes sense but my god when it first came out it sounded so moronic
so what is the tax rate on drug money?
You gotta be a really successful criminal for this to apply to you.
Are you okay Annie?
And that’s why you launder money :)
Ah I just wanna say this advice will wind you up I'm jail..maybe the IRS doesn't care about where it came from , but now there is a paper trail , and a smart florinsic accountant is gonna be able to put 2 and 2 together
If you like Manley Sullivan, you'll love Admiral Manley Power
This is only true if you make over the limit for self employment income!
How do they know that i actualy did tax it? If it falls under other they cant even follow where it came from.. so if i do get caught, they can just claim it must have been from other sources and i still havent payed enough taxes.. unless you actualy have to declare what crime the money comes from, which is stupid
Yeah okay, just tell us HOW TO PAY and EXACRLY how mutch we owe.
I believe if you’re selling marijuana, since its not legal on a federal level where the IRS operates but is legal in the state you may be in, then you also have to report it as illegal income
I don't care WHO THE IRS SENDS
I actually have a question on if a person were to report income from illegal sources to the IRS. If another agency investigated and saw their taxes, would there be an argument that this violates the Fifth Amendment against self incrimination?
I don't think so. I'm no lawyer but the pertinent part of the fifth amendment, "nor shall be compelled in any criminal case to be a witness against himself", just means that you can't be made to testify against yourself in court. It doesn't mean that statements or documents you already made elsewhere can't be used against you.
You don't say it's from an illegal activity. You just report that you have "other income". In this way, you aren't incriminating yourself. If it's later found that that other income was illegal activity, you can at least avoid being charged for tax evasion. If you don't report your other income, that can set you up for red flags, like your bank accounts having more money than is expected based on previous returns. Even if you kept it all in cash, you can still get caught by your spending, like buying a house. There will be records for stuff like that. If you're already under investigation, it's even harder to hide the fact that you had extra income.
Thanks, now I don’t need to carry cash everywhere
Ah yes, my "other" income...
(J/K I have no income to report. =') )
So I have a serious question. The whole point of money laundering is the pay taxes on illegally acquired money so that it's legit in the eyes of the Government. But if you just declare it as miscellaneous income and pay taxes on it to the IRS, doesn't that just launder the money. I mean sure I imagine other government organizations will look into it if you have significant sums of miscellaneous income, but if your staying quiet about how your getting it and paying taxes on it. Can the financial trail really be used against you?
yeah but when you made 30 mil in "other income" it probably looks less than legitimate lol
Fun fact: you can deduct the cost of drugs sold from your taxes.
It sounds weird, but even in an illegal business, it’s still a business cost, and therefore, deducted from your income
Or just everyone hikes up realizes why we even became a nation (key point of; there where supposed to be no taxes, the government made money the same way people did, we just lost faith and they try this shit)
I don't give a s*** where this jobless. Man got 42 million dollars as long as he pays his taxes on it and he did not make 40 million and one were square.
It's also because of the questionable legality of marijuana across the states ensuring dispensaries still pay taxes despite it being illegal on the federal level
The only time that the government cares about you is when it comes to paying your taxes. All other times, they dont give two craps about you.
The stuff they do on the news is to make it look like they care. And they do their best to make it look good.
All the more reason the IRS shouldn't exist
Amazing work I have to figure out how to volunteer
Ladies and gentleman, new York times youtube channel has watched the fatelectrician's video!
Well i didn't make any money off of your heart, so I'm not counting that as tax invasion.