Sammy, the mayor of Friendlyville, was charged with stealing $58,000 from the Boys' and Girls' Club. He takes the stand in his own defense and claims it was the deputy mayor, John, who was the real mastermind behind the scheme. This is an outright lie. John takes the witness stand and testifies that not only did Sammy steal from the Boys' and Girls' Club, but he sold town secrets to the Russians! This, too, is an outright lie.

Question

Quizplus · Accepted Answer

BIllegal gains, such as stolen money, are considered taxable income according to the IRS. Therefore, if Sammy did not report the $58,000 he stole from the Boys' and Girls' Club on his taxes, he would be guilty of tax evasion. John's knowledge of the theft and failure to report it does not make him guilty of tax evasion, as tax evasion pertains to the failure to report one's own income.

Sammy, the Mayor of Friendlyville, Was Charged with Stealing $58,000