If a taxable item is stolen from store, is that tax evasion?

[lightbulb27]

I'm hearing theft is high in stores in my area. The more people succeed in theft, the more will join. Why pay for anything, if can get it free? It means the honest people pay for item pay more

Penalties for tax evasion are high... much higher than theft. I'm curious, if someone steals electrical supplies from big box store... I hear that is a big theft item... and tax was due... is that tax theft?

and thus punishable under tax code?

Yes!

No

Don't know

[Makeushiver]

No, it is unearned income on your 1040. The store if Inc must file a 1120 on which they have a line for inventory shrinkage. It is not only unreported and unearned income that you must report but the sales tax also needs to be accounted for. Assume a $100 item and a 10% sales tax. Make a check payablke to the name of your state's tax collector to account for the sales tax. To account for the unpaid income tax, include it on your 1040 and use FMV to determine cost. If you incurred any expenses in shoplifting they may be deductible but I'd check with the IRS first. Thank you. As part of the tax relief package, do not mention the value on this site as they must report any case of tax evasion brought to their attention. Depending on which tax year you tell the IRS you acquired the item follow the instructions for that year. If this took place in a previous year you must file form 1040X to avoid any fraud charges on your audit

[lightbulb27]

So for the store it's unearned income... possibly deductible? Thus they are encouragted to report some theft...
For the theif, it's totally free, but should they have paid tax when they should have bought it... thus evaded tax? Is that right?

[BetaBucks]

Yes, it's income. Even illegal proceeds are considered income and tax evasion charges are historically applicable. Problem is that IRS CID doesn't charge until the evasion hits a really high number. They don't have the resources to go after a few hundred dollars of unpaid taxes. Even their auditors won't go after that civilly.

[lightbulb27]

good point, it's all about money. so don't steal too expensive of stuff. check!

[McLlovin]

It a shoplifting. It bad to just take stuff because everyone will pay through the business not doing business in your neighborhood anymore because they can’t make money.

[McLlovin]

Didn't mean to reply to your comment it was meant to be a general comment

[BetaBucks]

No worries bro. And totally agree 🤝

[NaultD]

So rounding up the highest sales tax to even 10% and federal crime of theft is $10,000. So something has to be $100,000 to be meaningful to press. At that point you could argue double jeopardy so hard to say but one bird in the hands is worth 2 in the bush.

[NamerOfStars]

That's an interesting question- I don't know. I'd assume so, since it'd still be classed as income (this is how non-violent criminal Al Capone got busted), but I think it'd take quite a bit of that for the IRS to come after you.

The sales tax not paid by the business owner might be a different story, though.

[DrPepper12]

That's a very novel and interesting way to approach major shoplifting! I never thought of that but it's actually brilliant!

The all knowing internet gave me this:

Shoplifters are not prosecuted for sales tax evasion because sales tax is typically imposed on retailers, not customers. When an item is shoplifted, the retailer loses the OPPORTUNITY to collect sales tax, but the legal obligation to pay the tax remains with the retailer, not the thief.

Additionally, prosecuting shoplifters for tax evasion would complicate legal proceedings (as theft is criminal and tax evasion is civil) without significantly enhancing penalties or deterrence compared to theft charges. Therefore, authorities focus on theft rather than pursuing additional tax evasion charges.

[debtfree_oneyear]

well I can't speak to the tax code I do work in retail and have witnessed several thefts at work

what suprised me most was not what they stole but who was stealing it; I saw a upper middle class couple steal a few bottles of wine while a homeless man with barely $5 waited in line to pay for his drink and bread

[gatixek710]

That seems reasonable to me. Get them for tax evasion.

[exitseven]

I imagine if Donald Trump did it so ebody would prosecute him for federal tax evasion

[RavVid]

I would think it becomes a tax loss.

[Anonymous]

Liberals are morons.

[beefcakebradybatson]

No, it's shoplifting, which is a crime.

[Ladsin2]

Is there anything that isn't taxable?