Wednesday, March 29, 2006

But is it deductible?

An accountant who formerly worked for the Cardiovascular Research Foundation (a charity) recently admitted to using company credit cards and writing checks to himself, stealing over $237,ooo. He pled guilty to larceny in New York. The judge said that she would sentence him to a maximum of six years in prison, but might lower that time depending on how much of the $237K+ he pays back.

All this is fine and dandy, but the more interesting part of this stems from the fact that he used some of the money (at least $11,000) to pay for a dominatrix in Ohio to beat him. According to the DA, he also used some of the money to pay for plane trips and car rentals, though it's unclear whether these were for him or her.

He said he would try to raise enough money to pay off the debt by selling off his house in Long Island where he lived with his wife and two children. It probably goes without saying that his wife is leaving him.

Also, since Alexander is not a citizen of the US and he pled guilty to larceny, his attorney says he will probably be deported back to India (his home country) after he finishes his sentence.

So, is this income under Section 61? Is it excludable under any of the sections? Is it deductible?

2 comments:! said...

What? Some guy steals lots of money from a charity so he can say "Yes, Mistress Heather, I would like another" and all you can ask is if he has accession to wealth clearly realized?

And yes, you are still taxed on money acquired illegally. You must have skipped class to go eat at Zydeco that day. I kind of doubt that travel expenses would pass the "in pursuit of business" requirement.

Bellejar said...

Well, its probably income, because he didn't know he would have to give it back when he took it. And as we all no income gained through illegal means is still income...

I used to be an investigator for the US DOL and I had a case once where a 72 year old woman embezzled 500k I think she may still be in prison, they gave her 58 months, with time off for good behavior I think it was almost three years.

She used the money for a face lift and several other plastic surgery expenses among other things.