![]() ![]() The resulting effects on revenues are estimated by JCT and are not included in CBO’s estimate of an approximately $200 billion increase. Part of the increased funding would support the implementation of a new information-reporting system to be used by those institutions. The Administration also proposes that financial institutions increase their reporting about account inflows and outflows. Of the $80 billion, CBO estimates, about $60 billion would be for enforcement and related operations support. By 2031, CBO projects, the proposal would make the IRS’s budget more than 90 percent larger than it is in CBO’s July 2021 baseline projections and would more than double the IRS’s staffing. Spending would increase in each year between 20, though the highest growth would occur in the first few years. Two types of funding would be provided: discretionary appropriations, which would mainly be used for enforcement activities and mandatory funding, which would be used for a variety of activities (not only enforcement but also operations support, business-systems modernization, and taxpayer services). The Administration proposes funding for the IRS that is $80 billion greater over 10 years than the amounts in CBO’s July 2021 baseline projections (which reflect the assumption that current laws generally do not change). That estimate does not include changes in revenues resulting from portions of the proposal that involve new information-reporting requirements and other changes to the tax code those changes are estimated by the staff of the Joint Committee on Taxation (JCT). CBO estimates that portions of the Administration’s proposal to increase funding for the IRS by $80 billion over the 2022–2031 period would increase revenues by approximately $200 billion over those 10 years. Since then, CBO has completed its analysis of another proposal in the President’s budget, an increase in spending for the Internal Revenue Service’s (IRS’s) enforcement activities. (Interestingly, it was Ragano who was later convicted of tax evasion.Last month, the Congressional Budget Office published An Analysis of Certain Proposals in the President’s 2022 Budget. Trafficante paid his taxes each year on what could only have been primarily illegal income. In law school, one of my more significant papers touched on mob lawyers, particularly Frank Ragano, who represented Santo Trafficante. This by no means follows, but it will be time enough to consider the question when a taxpayer has the temerity to raise it. It is urged that, if a return were made, the defendant would be entitled to deduct illegal expenses, such as bribery. Holmes then punts on the question of deductions: He could not draw a conjurer’s circle around the whole matter by his own declaration that to write any word upon the government blank would bring him into danger of the law. But if the defendant desired to test that or any other point he should have tested it in the return so that it could be passed upon. It would be an extreme if not an extravagant application of the Fifth Amendment to say that it authorized a man to refuse to state the amount of his income because it had been made in crime. If the form of return provided called for answers that the defendant was privileged from making he could have raised the objection in the return, but could not on that account refuse to make any return at all…. Holmes then turns to the question of self-incrimination: We see no reason to doubt the interpretation of the Act, or any reason why the fact that a business is unlawful should exempt it from paying the taxes that, if lawful, it would have to pay. Supreme Court majority, first dismisses the idea that illegally acquired income is exempt from income tax: 259 (1927), a liquor bootlegger was charged with tax evasion for not reporting his illicit income, and he argued that to do so would be self-incrimination in violation of the Fifth Amendment guarantee. (As they say, it’s how they got Capone.) But since the Constitution protects individuals from incriminating themselves, you can tuck it into the “Other Income” line. It’s funny but true thieves must pay income tax on stolen property they keep or face tax evasion charges. ![]() 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. The popular FAILblog has an image from what I’m pretty sure is the Internal Revenue Service instructions on the definition of income, which includes this among the things that you must report:
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