How many criminals actually comply because of the widespread fear of the IRS?
Is this the height of arrogance and power? Or just the mob bosses requiring even the lowest of criminals to give them their cut of the loot?
As ridiculous as their regulations sound, they were born from past judicial interpretations (misinterpretations) that, essentially, require individuals to surrender, through regulatory compliance, their right against self-incrimination. (the Constitution is not the actual source or grantor of those rights.) If a person is engaged in some kind of illegal activity that produces an economic gain, then the reporting of that gain and related details (expenses, etc.) is an act that may tend to incriminate the reporter of the information or provide a link in a chain of evidence that may expose one to criminal prosecution. This mechanism has proved very useful to the government over the years by providing a means by which essentially any citizen can be made the object of criminal (or at least heavy civil) liability. This was a particularly useful device during prohibition (see: United States v. Sullivan, 274 U.S. 259, 1927). We can recall that it was the income tax laws (applying the principle in the Sullivan decision) that allowed the government to take down Al Capone. The decision required an individual to raise a red flag on his tax return, by proffering an assertion of his right against self-incrimination, rather than by supplying this or that piece of information. However, such an individual (according to the theory set forth by Oliver Wendall Holmes) could not refuse to comply with the requirement to submit a return. This principle would be re-visited 49 years later in Garner v. United States, 424 U.S. 648 (1976). The Garner decision actually became the template of operation for many involved in the so-called tax protest movement that grew so quickly during the Carter administration. When Reagan came into office, he (and Congress) gave us the TEFRA laws which, among other things, imposed a fine for anyone who attempted to assert such a right (against self-incrimination) on a tax return. (The tax return being viewed as, in essence, an administrative subpeona to testify.)
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Is this the height of arrogance and power? Or just the mob bosses requiring even the lowest of criminals to give them their cut of the loot?
From IRS Publication 525: Taxable and Nontaxable Income
Page 33:
"Illegal activities. 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-EZ (Form 1040) if from your self employment activity."Page 34:
"Kickbacks. You must include kickbacks,side commissions, push money, or similar payments you receive in your income..."Page 35:
"Stolen property. If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner"
As ridiculous as their regulations sound, they were born from past judicial interpretations (misinterpretations) that, essentially, require individuals to surrender, through regulatory compliance, their right against self-incrimination. (the Constitution is not the actual source or grantor of those rights.) If a person is engaged in some kind of illegal activity that produces an economic gain, then the reporting of that gain and related details (expenses, etc.) is an act that may tend to incriminate the reporter of the information or provide a link in a chain of evidence that may expose one to criminal prosecution. This mechanism has proved very useful to the government over the years by providing a means by which essentially any citizen can be made the object of criminal (or at least heavy civil) liability. This was a particularly useful device during prohibition (see: United States v. Sullivan, 274 U.S. 259, 1927). We can recall that it was the income tax laws (applying the principle in the Sullivan decision) that allowed the government to take down Al Capone. The decision required an individual to raise a red flag on his tax return, by proffering an assertion of his right against self-incrimination, rather than by supplying this or that piece of information. However, such an individual (according to the theory set forth by Oliver Wendall Holmes) could not refuse to comply with the requirement to submit a return. This principle would be re-visited 49 years later in Garner v. United States, 424 U.S. 648 (1976). The Garner decision actually became the template of operation for many involved in the so-called tax protest movement that grew so quickly during the Carter administration. When Reagan came into office, he (and Congress) gave us the TEFRA laws which, among other things, imposed a fine for anyone who attempted to assert such a right (against self-incrimination) on a tax return. (The tax return being viewed as, in essence, an administrative subpeona to testify.)
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