Miscellaneous 2005

Taxing Crime: The Application of Income Tax To Illegal Activities

Source: Australian Tax Forum Journal Article

Published Date: 1 Jul 2005

In the recent case Federal Commissioner of Taxation v La Rosa, the taxpayer was subject to an income tax assessment on the basis that the proceeds of his illegal drug dealing activities were subject to income tax. This case brings to light several fundamental issues with respect to the application of the income tax to illegal activities generally which warrant further consideration and possible legislative intervention: did the legislature contemplate wholly illegal activities when enacting the income tax; should crimes which are not a ‘business’ for tax purposes escape taxation; should a criminal avoid tax liabilities where a constructive trust is found to exist; and what is the appropriate role of the income tax where proceeds of the same activity have been forfeited to the government under a civil forfeiture regime.

Sorry, this is subscriber only content.

To gain access to this material and much more - Subscribe Now.

(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).

Already a Subscriber? Login now

Already a Subscriber? Login now


The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.


Miscellaneous 2005

Share this page