Taxing the Proceeds of Crime

Illegally acquired gains are taxable, according to the judge‐made law of common law countries. Revenue codes are surprisingly silent on the subject. For a short while, though, things were different in the USA. Congress received its legislative power to tax ‘incomes from whatever source derived’ with the passage of the 16th amendment in 1913. In the same year, a tax was imposed on income derived from ‘any lawful business carried on for gain or profit’. In 1916, without debate, Congress omitted the word ‘lawful’ — substituting an unqualified form of words which still endures. Senator Williams, moving the Senate's acceptance of the 1913 bill, said that its ‘object’ was