Should IRS disgorge ill gotten gains?

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Jun 30, 2009 9:16 am

During the madoff sentencing circus yesteday I read a sign:

 
Madoff stole it
 
The SEC ignored it
 
The IRS kept it
 
Usually the government goes after all those who benefit from ill gotten gains. In this case the government benefitted. If prosecutors are to be believed Madoff pocketed tens of billions of dollars if not more. Which in turn means the IRS profited to the tune of billions of dollars as they took their cut.
 
As the government is busy seizing yachts, houses, cars and bank accounts to find the money to repay victims, shouldn't they dip into their own pockets  repay their own ill gotten gains?
Jun 30, 2009 9:22 am

You really think that these ill gotten gains were reported as income?

The place where the govt. did benefit is from taxes that the customers paid on gains that never occurred.

Jun 30, 2009 9:31 am

Yes, i'm sure Madoff paid his taxes. If hadn't that would have become another part of the government's prosecution  steam roller.

Jun 30, 2009 9:40 am
BondGuy:

Yes, i'm sure Madoff paid his taxes. If hadn't that would have become another part of the government's prosecution  steam roller.



When you're stealing money, it's better to hide it and not report it as income. Have you noticed that noone knows where the money is?

Jun 30, 2009 9:45 am

The question stands: Should the IRS repay victims the money Madoff paid them?

Jun 30, 2009 10:21 am

Bund Guy:


<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 


Morally you are correct. The IRS should disgorge there ill gotten gain. I am not sure how it works legally.


I believe that you are required to pay taxes on even illegal income. The Feds put Al Capone away for tax evasion.


Jack Black

Jun 30, 2009 10:30 am
BondGuy:

The question stands: Should the IRS repay victims the money Madoff paid them?



Dumbass, could it be that they haven't gone after him for tax evasion because they haven't pieced together a number to go after him with? The guy pled guilty. There's no way a trial would have taken place yet if the govt had to spend time building a case.

The fact that you're an idiot stands.

Jun 30, 2009 12:00 pm

Let's not forget, the governemnt WILL pay the taxes back when the clients that lost all this money report it as theft on their tax returns.

 
In fact, the government will pay back MORE than they received, sicne they only received taxes on the GAINS.  The clients will be able to writeoff the entire VALUE of the accounts they "lost".
 
 
Jun 30, 2009 12:12 pm

<?: prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Alice:


<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> BondGuy adds useful information to his posts. You mainly post Ad hominem arguments. Please quit the personal attacks, and just attack the arguments. I know you are a smart guy, so you input would be appreciated, but please stop the atacks.


Jack Black


 


Jul 1, 2009 10:58 am
Alice Cooper:
BondGuy:

The question stands: Should the IRS repay victims the money Madoff paid them?



Dumbass, could it be that they haven't gone after him for tax evasion because they haven't pieced together a number to go after him with? The guy pled guilty. There's no way a trial would have taken place yet if the govt had to spend time building a case.

The fact that you're an idiot stands.

 
AC, a little over sensative? I wasn't ignoring your post. You make a good point. However, I wanted to keep the thread on point.
 
To your point- it's possible that the government hasn't found the money. it's also possible that the government overstated it's case. That is, the loses aren't anywhere near what they say they are. Not that our government would ever do anything like that.
 
Even so, Madoff paid taxes with stolen money. If I accept stolen money for payment of a debt the government or the victims will come knocking on my door demanding their money. Ignorance is no defence.
 
Ice, jack, good points as well.
Jul 1, 2009 11:38 am

My 2 cents:



My guess is the losses aren't anywhere near what they claim. Maybe in opportunity costs but I am guessing if they go back and add all deposits from clients that it is in fact much smaller. However easier to convict when you claim "largest ever"



I don't think you can claim a loss on investment on a tax statement because you invested in some illegal scheme.



I don't think the gov't should have to give back any money to the people who invested with Bernie.. Seriously not a down year and you don't question it. No one is that good (except James Simons).

Jul 1, 2009 11:57 am

http://www.nytimes.com/2008/12/19/business/19loss.html



Interesting article on theft losses in the Madoff scheme.  I guess it is left to interpretation by the IRS.