Lets’ say a magical fish gives me one wish if I throw them back, and when I get back to my house there is 10 million dollars worth of 24K gold bars filling up several crates in my basement.
Let’s saw I am a law abiding citizen, and report this income to the IRS, but I can’t “prove” where the gold came from. Can I keep the gold even if I can’t prove where it came from? Am I in any kind if trouble for having this unexplainable income?
IANAL, but I would suppose so. There’s a reason why drug dealers have to make use of money launderers. Just a not-so-WAG, but still a guess.
Wish for cash instead.
Any competent magical fish should be able to arrange for the millions to arrive via a huge lottery win, thereby solving the problem of explaining the money’s origin.
Hard to say, IMNSHO. The IRS is allowed to suspect about anything they want to suspect for any reason that seems good to them - just like the rest of it. But they still have to be able to prove 1) there was a crime 2) you committed it 3) the money came as a result.
All they have to work with is the gold. But I gotta say that if I’m on the jury and all you have is the fish story, you’re pretty much fucked. But all is not lost. You don’t have to prove anything, they have to do all the proving.
Just as a WAG I’d say it would come down to whether or not you knew a lot of shady characters they could tie you to.
yes, its very risky
but you’ve got a friend in me, I will take the problem off your hands!!
Couldn’t you just say on your tax forms that you got 10 million in illegal income and pay the taxes on that? Then they can’t go after you for tax evasion.
Does the US have any laws about Treasure Trove or similar?
YMMV depending on where you live. I am in Australia where, as offensive as it may be to me, at least some states have passed legislation within the last 5 years or so which basically says that the government can point the finger at whomever it pleases and call upon them to prove the origin of their assets. That is, there is no need for the government to even accuse you of a crime, much less prove that you committed it and acquired your assets as a result of it. IAAL and to me this is totally outrageous. Its a complete reversal of the onus of proof. There are at least 2 states that have such laws here.
Where, exactly, could you go to turn one of these bars into cash? I think that’s your biggest concern, no?
I am not a magical fish, but I agree with Cunctator.
Back to your question, though, many folks with mysterious income call it income from gambling. I think if you dutifully pay your taxes, you’re clean. You could tell your story to some sleazy tabloid, if you want some (admittedly thin) CYA.
At first, I abbreviated “I am not a magical fish,” but I reconsidered.
That’s interesting buns3000. Which two states?
Yeah, but that’s not really where the income came from, so would that open you up to charges of tax fraud?
As an aside, what if you claim income from illegal activities and then get audited? Do they make you document the illegal activities? Can you then be prosecuted for them?
I think his biggest concern is the sudden throng of “fishing buddies” he’s got lined up in his driveway.
“I am not a magical fish” has been one of the few things I’ve seen around here that has made me consider changing my handle.
So what would happen if you declared the income on your 1040, paid all of your taxes and then if you got audited stated quite honestly that “A magic fish gave me the gold”?
Sure it sounds nuts, but assuming that your magical fish created the gold out of thin air and it isn’t missing from, say, Fort Knox, then no crime has been committed.
The IRS and whoever else they drag to the party to investigate would have a fun time proving that you did anything wrong. You cooperate completely and can account for your whereabouts, job, the fact that you don’t associate with scurrilous characters, etc. The government may not like it, they may be suspicious as hell, but you stick to your story and pay your taxes. What can they do?
and, to add to Valgard’s comment … you’d have the money to let your lawyers deal with them.
I’d marry a Swiss lad or lass, first, though, (does that still work) or open an account in the Caymans so they can’t freeze it while you argue. Or so reading old spy thrillers and Grisham seems to indicate.
(it isn’t condoning illegal activities if we’re talking about acting in the wake of the result of the actions of a magical fish, right?)
I would presume that someone, somewhere at sometime has lost 10 million in gold bars. You would be pretty vulnerable to they, or thier descendents, saying you have it, as any story they came up with to explain how you got therr gold would be infinately more belivable to a judge then the magic fish story.
WA introduced this legislation in around 2000/01 and I’m quite sure Victoria has something similar.