Other People’s Money: Treat It Like It’s Yours…and the Government Will Tax It Like It’s Yours

sun v. Comm'rAl Capone apparently said, “they can’t collect legal taxes from illegal money.” He later learned that they can. Last week, the Fifth Circuit provided a reminder that stolen money is income, just like money obtained through honest means. Sun v. Comm’r, No. 16-60270, 2018 U.S. App. LEXIS 1187 (5th Cir. Jan. 18, 2018).

A foreign friend sent Jerry Sun $19 million dollars to invest on his behalf in a loose arrangement that was not committed to writing. Sun spent $6 million on personal expenses, parked $4 million in the accounts of a company he controlled, and invested the balance in his own brokerage accounts where it was intermingled with his own funds.… Read More