Further proof our government hates the small businessman

From IRS Tax Court. (Sue found this while researching one of her tax classes.)

Docket No. 26641-81, 50 TCM 538

The gross income of a convicted hashish importer was properly determined by the IRS without any reduction for amounts that were allegedly shared with unidentified co-conspirators. His contention that he received only $185,000, and not a full $1,510,576, was not credible because (1) he paid over $400,000 to others who played a lesser role in the criminal activity and (2) his living expenses incurred after the importation of the hashish exceeded the amount that he willingly admitted receiving. Evidence of failure to file tax returns and report substantial income from criminal activities supported the IRS’s imposition of a fraud penalty.


  1. “…the IRS’s imposition of a fraud penalty.”

    And there’s no statute of limitations on tax fraud, either. They can go back and audit any year they want.

  2. never-the-less… in the realization that the following point is moot…

    The IRS, like The Federal Reserve, was never ratified by the states, is unconstitutional, and contrary to The Founders’ intent.

    When two or more conspire to act

  3. Well, both Congress and the judiciary are in on the conspiracy, since every suit brought to that effect (at least that I’m aware of) has been decided in favor of the government. IRS has been empowered to treat such arguments as “frivolous” and subject to automatic rejection with penalties. Whether unconstitutional or not, for all practical purposes it’s the law.

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