If you're out looting, make sure you claim it to the IRS...

[xtremerange]

The IRS doesn't share tax return information with other Law Enforcement. They just want the money they consider owed to them. You think they want to spend time talking to other agencies?

BTW that is reciprocated. How many local law enforcement agencies share information with the IRS about ill-gotten gains?

I think the IRS is the one part of the government both cop and criminal want to avoid interacting with.

 

[HiredHand]

He’s passed on now, but I remember a story I was told by an old friend of the family. He ran a small electronics repair business from home. He was undergoing a business tax audit by the IRS. They just happened to show up right at harvest time for his personal marijuana grow. He said the smell of marijuana was unmistakeable, but the entire time the IRS agents were there they never made the slightest mention of it. He said that he looked over his shoulder for months waiting for law enforcement to show up, but nobody ever appeared.

I agree with others comments. I think the IRS just wants to collect the income taxes unless you’re involved in some sort of major organized crime, they probably aren’t interested in your small time criminal activity.

 

[OKRuss]

Here's something to think about. If say a stupid criminal reports stealing $5000 in clothes and in a 20% tax bracket, would owe the IRS $1000. Can they pay the IRS with a couple dresses, a pair of designer jeans and a few cardigan sweaters?

 

[MR.T.]

But is stealing something, say the above $5 grand in clothes or a few big televisions or electronics, actually income? Cause no money was exchanged.
Or is it income, only if they sell they stollen goods? What if they have no intention of selling the stollen goods?

 

[sherrick13]

The IRS doesn't share tax return information with other Law Enforcement. They just want the money they consider owed to them. You think they want to spend time talking to other agencies?

BTW that is reciprocated. How many local law enforcement agencies share information with the IRS about ill-gotten gains?

I think the IRS is the one part of the government both cop and criminal want to avoid interacting with.

In my whole LE career I worked with (not employed, just on a task force or assisted or trained with) every major federal LE agency at some point. But never the IRS.

 

[sherrick13]

But is stealing something, say the above $5 grand in clothes or a few big televisions or electronics, actually income? Cause no money was exchanged.
Or is it income, only if they sell they stollen goods? What if they have no intention of selling the stollen goods?

Yes. If you trade a $500 item for a $1000 that is technically $500 in income to you and is supposed to be reported.

 

[sherrick13]

Here's something to think about. If say a stupid criminal reports stealing $5000 in clothes and in a 20% tax bracket, would owe the IRS $1000. Can they pay the IRS with a couple dresses, a pair of designer jeans and a few cardigan sweaters?

The IRS only accepts US currency. So no. They might seize those eventually, but you can't give them to them for payment.

 

[sherrick13]

He’s passed on now, but I remember a story I was told by an old friend of the family. He ran a small electronics repair business from home. He was undergoing a business tax audit by the IRS. They just happened to show up right at harvest time for his personal marijuana grow. He said the smell of marijuana was unmistakeable, but the entire time the IRS agents were there they never made the slightest mention of it. He said that he looked over his shoulder for months waiting for law enforcement to show up, but nobody ever appeared.

I agree with others comments. I think the IRS just wants to collect the income taxes unless you’re involved in some sort of major organized crime, they probably aren’t interested in your small time criminal activity.

I think that would completely depend on the agent.

Same really goes for local cops. I have been in a situation where I was in a house for a non criminal matter (death notification or taking a report or getting information) and if I saw some minor contraband in the house I didn't act. Other cops might however.

 

[MR.T.]

Yes. If you trade a $500 item for a $1000 that is technically $500 in income to you and is supposed to be reported.

Sure about that? Would you report that? I really don't think so.

I take enough scrap metal that I collect throughout the year to the scrap yard. At least 2 or 3 loads a year. If You think that I'm going to report that money as income you are delusional. I sold a vehicle 2 years ago that I made a couple hundred dollars. If You think I'm going to report that money, you are delusional.

 

[sherrick13]

Sure about that? Would you report that? I really don't think so.

I take enough scrap metal that I collect throughout the year to the scrap yard. At least 2 or 3 loads a year. If You think that I'm going to report that money as income you are delusional. I sold a vehicle 2 years ago that I made a couple hundred dollars. If You think I'm going to report that money, you are delusional.

I didn't say that. I am just saying what the LAW states to do. I'm a CPA BTW. When I'm advising clients I just tell them what the law states, they can make their own decision on what to do. We are not required nor compelled to report underreported income or other violations of the law. We will withdrawal from the engagement if we deem it an ethical risk however.

Of course most people aren't going to report minor income. But according to the IRS you are supposed to. That is all I'm saying. Do they really care that much? No. Because in many cases it wouldn't result in any tax or very little tax anyway.

The IRS does do some random audits, but by far they spend most of their resources in on what will give them the biggest return for their time investment. They aren't going to spend $50,000 in man hours to get $500 in tax.


BTW in your case, you probably wouldn't have any NET income anyway. Your basis (what you paid for those items) is going to be more than what you received thus no income.

However if you paid $200 for a car and then sold it for $500, you are SUPPOSED to report that $300 gain.

If you picked up cans on the road free and sold them for $50 you are SUPPOSED to report that $50.