In all seriousness, income from any sort of 
illegal activity (e.g., sale of drugs, 
prostitution, embezzlement, blackmail, armed 
robbery ... whatever!) ARE taxable and it is a 
violation of the Internal Revenue Code. On the 
1040 Form it'd be reported on Line 21: "Other 
income. List type and amount."

Of course, criminals don't comply with this.  But 
their failure to report illegal income gives law 
enforcement another count to charge them with ... 
and it can be useful in prosecution, e.g., if for 
some reason they can't get 'em on the underlying 
crime they can get 'em on tax evasion.  Some 
notorious gangsters in American history were 
jailed for tax evasion rather than for the crimes 
that netted them the income they failed to report 
the tax on.

I suppose if Ms. Gregory (the alleged embezzler) 
can get the attention of a Tea Party politician, 
she can try to argue that requiring her to pay the 
$322, 970 would constitute a tax increase and 
that, instead, federal spending should be cut by 
$322, 970  ;-p

-Steve Hoffman
Takoma Park MD


On 8/10/2011 11:25 AM, Effgen, A. B. wrote:
> Thank you, Arianne, for the notice, and Steve for the additional links. I f=
> ind it amazing that the history of the house mirrors the life of its owner,=
>   time and again. Ralph Ashcroft, anyone?
>
> If there is some humor to be found in the situation it is in the Hartford C=
> ourant article from August 5:
>
> "She also failed to pay federal taxes on the money she embezzled from 2002 =
> to 2010 and underpaid her taxes by $322,970, according to the Internal Reve=
> nue Service."
>
> I file a 1040 every year and have seen the line items accounting for tips, =
> and for gambling winnings, but not the line for embezzled funds. Is there a=
>   separate schedule?
>
> On another topic, related only by geography, should you find yourself in Ha=
> rtford, around the time  Mr. Courtney gives another tour of Cedar Hill Ceme=
> tery in Hartford, I recommend you go. Best five bucks I've spent in quite a=
>   long time. Between Cedar Hill and Mount Auburn in Cambridge you can stand =
> within six feet of the remains of almost every relevant person in Twain's N=
> ew England life. Plus the number of Civil War enthusiasts who attend give y=
> ou a real sense of nineteenth century facial hair.
>
> Steve, my apologies for not writing a review sooner. My father and I arrive=
> d late, crept into the back of the pack, and had to leave to make a train u=
> pon conclusion. A beautiful day for a cemetery walk.
>
> Then completely unrelated beside the name Mark Twain, I've got about 2,000 =
> words to send to the MTF but not the time to write them. I'll give you the =
> topic...Will Farrell is the Kennedy Center's choice for this year's Mark Tw=
> ain Prize for American Humor.
>
> ...
>
> Thoughts?
>
> In disbelief,
> Alex Effgen=20
>
>