Are tax crimes&#39; punishments in general proportional to the amount of money? Let's say that I sell 0.001 BTC right now on Bisq (decentralized P2P exchange) and the buyer sends me $500 USD to my bank account. I then use that $500 to buy a pair of headphones for myself. Or I just buy the headphones straight away with Bitcoin, skipping the whole fiat conversion part. For one reason or another, I never report this to the government. Maybe I simply had no idea that such a law existed (actually the case for me up until a few days ago), or I forgot, or I did know but actively wanted to avoid having to pay my money to an evil government. I doubt it matters why; let's just say that I never report it. But then, one day, they find out. And they decide that I'm guilty of withholding $500 worth of BTC from them, of which I'm apparently supposed to pay 30% in taxes whenever I sell/spend them. I'm sure they will punish me somehow, and not care about any explanation I might have. But will the punishment be 40 years in federal maximum security prison, even though the amount of money is ridiculously small? Or will they just tell me to pay it and perhaps add a $20 fee on top of the 30% of $500 that they consider me to owe them? Again, I'm talking &quot;in general&quot;. In most countries. Feel free to use the USA as an example, but I'd be interested if it varies wildly.
Short Answer The dollar amount of a criminal tax offense is considered at the sentencing stage, but is only one of many factors and merely helps determine which of several possible sentencing guideline sentences that a U.S. judge uses as a starting point when determining the sentence. While the amount of money involved is a factor, the punishment isn't usually &quot;proportional&quot; to the tax liability in a criminal tax case. But criminal tax offenses make up only a tiny fraction of all punishments imposed for violating tax laws. Most tax law violations are punished with civil penalties that are often proportional to the amount of tax not paid or not reported. The U.S. pattern in this respect is typical of punishments for violating tax laws in the developed world more generally. Undeveloped and developing country economies tend to be less bureaucratic and to have a more criminal law oriented system for punishing violations of their revenue collection laws, and also tend to have narrower tax bases limited to more concrete transactions. Many resource rich countries, like oil rich monarchies, often don't impose taxes on the general public at all. Long Answer I'm sure they will punish me somehow, and not care about any explanation I might have. But will the punishment be 40 years in federal maximum security prison, even though the amount of money is ridiculously small? Or will they just tell me to pay it and perhaps add a $20 fee on top of the 30% of $500 that they consider me to owe them? When Are Tax Crimes Prosecuted? The vast majority of the time, when you don't pay your taxes, tax collection authorities impose a monetary civil penalty, which often is proportional to the amount of money at stake, rather than punish your non-compliance in the criminal justice system. Less frequently, the civil penalty involves the forfeiture of property of the offending taxpayer (e.g. currency received as lawful payments for goods or services that is not disclosed to tax officials), or the loss of some tax law related benefit or privilege (e.g. disallowing a tax credit when a tax return upon which it should be claimed isn't filed by the due date). Strict liability or negligence based penalties for tax law violations are usually civil rather than criminal. Criminal penalties for tax law violations are usually reserved for intentional misconduct. How Severe Are Tax Crime Penalties? Criminal tax crimes usually involve intentional fraud or willful conduct influencing the amount of taxes you owe (as opposed to good faith efforts to lawfully not pay higher taxes than necessary, or negligent or unintentional actions that have that effect), or intentional non-reporting or misreporting of information necessary for the government to determine how much tax someone else owes, or willfully failing to pay or collect taxes when the taxable is able to pay or collect the taxes, or for conduct that thwarts tax collection more generally (like sending fake inaccurate tax forms to random people causing them to pay the wrong amount of taxes or none at all). The maximum penalty for serious tax crimes of this type are typically similar in severity to the maximum penalty for non-violent theft, forgery or fraud offenses not involving taxes, which is typically at the low to medium end for felony criminal conduct and is typically far less than the maximum punishment for violent crimes. Crimes involving willful manipulation of how much tax is owed by someone usually has higher maximum criminal penalties than willful failure to pay or collect taxes. Conduct such as lying to tax investigators, or disregarding legal process during tax audits and litigation, or other fraudulent conduct that doesn't change how much is owed or paid directly but makes it more cumbersome to collect taxes (like intentionally filing a false information tax return, when the taxpayer reports the income anyway, or filing a false information tax return to harass someone who doesn't owe any tax in the first place), are typically misdemeanors with only comparatively minor criminal penalties (perhaps a few days to a year in jail and a fine in the hundreds or single digit thousands of dollars). The main driver of the maximum penalty for the narrow range of tax law violations are actually tax crimes is how clearly malicious and unruly the conduct is, rather than the amount in controversy. Negligently failing to pay $10,000,000, or recklessly taking a very dubious tax law position in a tax return, will usually result in a large civil tax penalty, but no criminal prosecution. Intentionally forging or doctoring a $700 information tax return, or intentionally paying a tax bill with counterfeit currency, will usually have criminal penalties. There are also quite a few crimes that arguably count as tax crimes for conduct like murdering tax collectors, kidnapping tax collectors, assaulting tax collectors, bribing tax collectors, blackmailing tax collectors to act unlawfully, stealing or destroying tax collection agency property, etc. that would be crimes even if there was no tax component to the conduct, that I do not consider in this answer. These crimes are usually punished only modestly more severely than they are in the non-tax context when no government officials or offices are involved, and are usually punished with about the same severity as other crimes against non-tax government officials. Determining The Sentence For A Tax Crime Under U.S. Law In the U.S., the maximum period of incarceration for a federal tax related crime is usually not related to the amount of money that the government was denied in tax revenues, although the civil penalties for violations of tax laws are usually capped at a percentage of the tax not paid. Criminal fines for tax offenses are sometimes related to the dollar amount of the offense, and sometimes aren't related directly to the dollar amount, although they may be determined with the dollar amount of the offense in mind. The length of the sentence of incarceration and the amount of the fine actually imposed by a federal judge upon a conviction for a federal tax related crime between the maximum and minimum sentences authorized by law is governed by the U.S. Sentencing Guidelines set by the U.S. Sentencing Guidelines Commission. The guideline sentence is based upon the specific subsection of the federal tax crime for which you were convicted and then a lot of factors that add or deduct points. Some of the points are related to your prior criminal history. Some of the points are related to your conduct in the litigation (e.g. did you cooperate with prosecutors), and some of the points are based upon the nature of the offense itself, including the dollar amount of the tax loss caused by the crime. Typically, there are several dollar ranges for each crime, and the number of points added to the number used to determine the sentencing guideline range is stated for each of the possible range of dollar values of the money at issue in the crime. The number of points you have after the judge evaluates all of these factors (based upon a preponderance of the evidence with lower evidentiary standards than those that apply at the guilt-innocence phase of the case) to produce a non-binding recommended sentencing range for the crime. The judge than imposes the sentence. A sentence within a correctly determined sentencing guideline range is always upheld on appeal. A judge can impose a sentence that is higher than the guideline range but lower than the maximum statutorily authorized sentence, or below the guideline range by higher than the minimum statutorily authorized sentence, if the judge articulates reasons for doing so that are on a list of reasons that a judge can impose a non-guideline sentence. If a sentence for a federal tax crime conviction is appealed, the appellate court evaluates whether the sentencing guideline range was determined correctly, and whether if the judge imposed a sentence outside the sentencing guideline range, if the reasons articulated by the judge were insufficient to justify that decision and hence constituted an abuse of discretion by the judge. If the appellate court makes that determination, the case is remanded for re-sentencing in accordance with the appellate court opinion (assuming that the conviction itself was affirmed on appeal).
They aren't "imposing tax laws at the state level", and the states are still perfectly free to award whatever credits they like. There's a more complete explanation here. Before 2017, if you paid, say, $30,000 in state taxes, you could take a $30,000 deduction from your federal taxable income, thus reducing your federal income taxes by some fraction of $30,000 (depending on your tax bracket). The 2017 tax bill placed a $10,000 limit on this deduction. Some states responded by creating a provision where you could donate $30,000 to the state and receive a $30,000 credit against your state taxes owed - so you end up paying the same amount to the state, but now you characterize it as a charitable donation, which is still deductible from your federal taxable income. The new IRS regulation says that such a "donation" will no longer be deductible from your federal taxable income; that's all. Your state can still issue you a tax credit for such a donation if they want - the federal government has no control over that - but any such credit will reduce the amount you are allowed to deduct on your federal return, making the whole exercise pointless. The federal government certainly has the power to determine how you should compute your income for the purposes of your federal income taxes, including what you may or may not deduct. That's the power they're using here.
In the UK, broadly speaking it is not illegal to pay a ransom. However, there may be circumstances such that arranging or paying a ransom constitutes a terrorist financing offence - although a prosecution might be deemed against the public interest. I'm not aware of any such prosecutions. Section 15 (3) of the Terrorism Act 2000 makes it an offence for a person to provide money or other property if he knows or has reasonable cause to suspect will or may be used for the purposes of terrorism. Section 17 makes it an offence for a person to enter into or become concerned in an arrangement as a result of which money or other property is made available or is to be made available to another, and the person knows or has reasonable cause to suspect that it will or may be used for the purposes of terrorism. Section 17A makes it an offence for an insurer to make a payment under an insurance contract against kidnapping and ransom if he knows or has reasonable cause to suspect that the money or other property has been, or is to be, handed over in response to a terrorist demand. Section 18 makes it an offence for someone to enter into or become concerned in an in an arrangement which facilitates the retention or control by or on behalf of another person of terrorist property. If a person becomes aware in the course of his trade, profession or business (e.g. the banker assembling the money) that someone may be arranging a ransom to pay a terrorist, section 19 makes it an offence for that person to not disclose to a constable as soon as reasonably practicable his belief or suspicion and the information on which it is based. In terms of maritime piracy kidnappings in the area of Somalia for example, although the Government has tried to link them to terrorism there is no direct evidence of systematic links. But if it became known that such a connection exists, then the knowledge or suspicion element of the terrorist financing offences might be provable. In Masefield AG v Amlin Corporate Member [2011] EWCA Civ 24 (a case partly about whether ransom payments by shipowners to pirates were as a matter of English law against public policy) the Court of Appeal was not aware of illegality in the payment of ransoms under international law. The UK Government supported the adoption of UN Security Council Resolution 2133 in January 2014, which among other things "Calls upon all Member States to prevent terrorists from benefiting directly or indirectly from ransom payments or from political concessions and to secure the safe release of hostages".
I'm not sure it makes sense to talk about having "jurisdiction" over an IP address, for the purposes you're discussing. If you wanted to sue the IP address itself--something that is possible under limited circumstances--then you might need to locate it for jurisdictional purposes. But I don't think that's what you're talking about. You're talking about taking civil or criminal action against the people who are using the IP address to commit crimes. What matters, in that case, is not a theoretical legal question about the location of an IP address. It's questions like: where do these people live? Where do the people downloading the illegal content live? Where are the physical servers located? ("In the cloud" is not an answer--there are physical servers somewhere making up that cloud). For jurisdictional purposes, the chair they're sitting in when they upload the illegal data, and the location of the AC power outlet the physical server is plugged into, are as important as, if not more important than, the metaphysical "location" of the IP address of the server.
Are the monetary donations collected by the recipient subject to federal taxation according to IRS law? Yes. Usually, money received from an activity from third-parties with no personal relationship to you (assuming that &quot;you&quot; are not a tax exempt organization), are taxable income under Section 61 of the Internal Revenue Code as interpreted by case law, as a form of &quot;compensation for services&quot;, under I.R.C. § 61(a)(1), or as &quot;gross income derived from business&quot;, under I.R.C. § 61(a)(2) (exactly which prong of I.R.C. § 61(a) it comes under isn't legally relevant for tax purposes in this situation). This is also informed by I.R.C. § 83(a) (which is a general rule even though the balance of the Code section applies mostly to equity compensation in entities), which states in the pertinent parts (material in brackets inserted for clarity): If, in connection with the performance of services, property is transferred to any person other than the person for whom such services are performed, the excess of the fair market value of such property . . . over the amount (if any) paid for such property [by the person who receives the property], shall be included in the gross income of the person who performed such services[.] But, gifts are expressly excluded from income under Section 102 of the Internal Revenue Code as interpreted by case law. One point which the case law makes clear, however, is that an obligation to pay doesn't need to be a legally binding obligation to make a payment something that counts as income rather than a gift. The tax law instead looks at the substance of the interaction and the reality of how decent, well mannered people would act under circumstances in which they receive an uncompensated benefit. Ultimately, whether are voluntary payment made through a private individual or business's website is taxable income or is not taxable because it is a gift is a case by case determination to be made in light of all of the relevant facts. For example, if your mother donates $7,500 to your website on your birthday, even though all of your other &quot;donations&quot; are from third-parties whom you have never met in person in amounts from $5 to $100 and you have provided all of those other third-parties with some kind of service or benefit through your website (e.g. they were allowed to read free webcomics or listen to music you wrote and recorded without charge over the website), the donation from your mother probably counts as a gift, even though the other donations probably count as income taxable income. But, in the absence for any reason for the donation other than gratitude for the performance of the services provided by the website, or for the conduct of the business that the website belongs to, the donation will generally be treated as income under Sections 61 and 83, rather than as a gift under Section 102. The notion of a gift is normally limited by case law and suggestive related section of the Internal Revenue Code that illustrate its intended meaning in the case of gift loans and bargain sales made for donative purposes, to circumstances in which the person making the gift has received nothing in return for it. A donation to a website usually wouldn't meet this test to show a transfer's character as a gift. The most familiar example, upon which there is a great deal of case law and authoritative guidance, is that tips paid to restaurant and hospitality industry workers are income rather than gifts, and are subject not only to income taxation but also to FICA payroll taxation. These tipping situations are closely analogous to voluntary payments made through a website. There are a great many tax regulations, court cases interpreting tax law, and authoritative guidances from the IRS (such a revenue rulings) that address the basic concepts that I've set forth above. And, the income tax law authorities are further informed by the statutes and case law governing gift taxation, which is, as intended, interpreted to define a gift in a matter that dovetails more or less perfectly with the definition of a gift for purposes of Internal Revenue Code Section 102. As the IRS explains at its website discussing the gift tax for which the concept of a gift is defined consistently with the income tax concept of a gift: The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether or not the donor intends the transfer to be a gift. The gift tax applies to the transfer by gift of any type of property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift. Donations which are not income are gifts and there is a tax on gifts given (paid by the donor rather than the person receiving the gift). But, there is a $15,000 per donor per donee exception per year from gift taxation for gifts under the Internal Revenue Code, in addition to more than $12 million per lifetime per person exemption from gift and estate taxation for gifts in excess of this $15,000 amount (called the annual exclusion) and inheritances left at death. So, usually, if a transfer is treated as a gift rather than as income, no tax will be due. But this part of this answer's short summary of the law is the top level conceptual framework for all of those other subordinate tax law authorities. Also, this income is also subject to self-employment taxation, which is imposed in lieu of FICA on income which is not a wage, salary or employment-related tip. Often self-employment taxes are due on self-employment income even when no federal income tax is owed upon it. if there is a clear answer, do states with personal income taxes do the same regarding website donations? Most states and localities with a personal income tax start from the federal definition of income and modify that definition in ways that the taxing jurisdiction deems fit either to make sense (limiting the tax to income related to the state, for example, at least for non-residents), or to fit local policy preferences (e.g. exempting from income taxation, capital gains made in an investment in the state favored by state lawmakers). Almost no states or localities have chosen to deviate from the federal definition of income for income tax purposes with respect to donations made to websites that are not non-profit entities.
Article 1 Section 8 appears to answer your question - only the Federal Government has the power to regulate the value of currency. Unilaterally forbidding the use of pennies as currency would be a regulation of their value (from 1 cent to 0 cents). A state government might be allowed to refuse pennies for the purpose of paying for a service in advance like a private business can, but like a private business are required to accept them as legal tender for the purpose of repaying debts, judgements, etc. Responding to the edited post, I'm inclined to say that the proposed plan is still "regulating" currency, in the same way that only the Federal government is the only entity authorized to destroy worn out currency (which it obtains by fair exchange). As Nate Eldredge points out, this may also violate the Commerce Clause of the same section, both in terms of interstate transactions and in terms of the exchange of currency between persons of different states and the implementing state. However, if it was implemented as suggested in comments, where businesses were required to exchange whatever pennies they receive with the state government for an equal amount of other currency, it might not run afoul of either of these clauses. This is probably a question the Supreme Court would have to decide, since a lot of hypothetical factors could come into play. At first glance, there doesn't appear to be any factual difference between a state holding pennies in storage indefinitely and the state holding any other currency in storage indefinitely, which they are allowed to do so long as they don't violate any part of USC Title 18, Chapter 17 (e.g., melt the pennies for the copper). On the other hand, the Federal Government could argue that the storage of pennies for the purpose of removing them from circulation is a form of currency regulation even if the action would otherwise be legal, or that the state's actions are impactful enough to affect interstate commerce even though they only directly impact commerce in the state and therefore Congress could pass a law outlawing the practice.
Would any offence be committed for: Having this on your person? Buying or selling this? Leaving it around for people to plug in to a computer? In the abstract, I don't think that this conduct would violate either Section 36 of the U.K. law or U.S. law, although, obviously, purposefully destroying a computer itself (i.e. actually using the device without the consent of the owner of the computer) would violate many U.K. laws and would also violate many U.S. laws at both the state and federal level. I also don't think that possession or buying or selling this product would be a crime absent some intent that it be used illegally, in which case there might be an "attempt" to commit a crime offense, or an offense that would make one part of a conspiracy to commit a crime. In the "leaving it around" example, there is arguably an intent to use it to harm another improperly, although the phrasing is ambivalent. While many statutes in the U.S. criminalize possession of burglary tools, or drug paraphernalia, sometimes with an associated intent element (although even these crimes often have an express or judicially implied intent to use element), I'm not aware of any statute that criminalize possession of tools for malicious destruction of property. So, if the tools aren't possessed or used in a manner intended as a step in the facilitation of a crime, I don't think that any law is violated. So far as I know, the U.S. does not have a counterpart to Section 37 of the British statute cited above (it isn't a terribly easy thing to search for to definitively rule out the existence of such a law because federal law has many uncodified crimes in unexpected statutes and there are many sets of state criminal statutes, not all of which are codified either). The example giving in the comments by @gnasher729 of possession of a hammer which could be used to do the same things that this object could be used to do is instructive. Arguably, this USB-like tool is more specifically targeted at malicious conduct. But, for example, when I used to work as a radio news reporter, we had a machine that was basically a high powered magnet that was specifically designed to destroy all information on magnetic media. This was, in part, so that it could be reused, but it was also so that confidential interviews wouldn't fall into the wrong hands once they were no longer needed, in much the way that one might shred paper documents. It isn't so implausible to think that a device like this one might be necessary for individuals or firms with national defense secrets embedded in their hardware and software to have on hand in order to destroy a sensitive computer in order to prevent a security breach, if necessary. In a case like that, leaving one of these devices around the office unlabeled might be negligent, but wouldn't have the intent necessary to be an intended crime. And, it is hard to imagine that the device itself, which seems pretty simple, would itself involve any technology that is a national security secret, so it probably wouldn't violate export control laws. Of course, possession, purchase or sale of such a specialized device, or leaving it around unlabeled would certainly be powerful evidence of an intent to use the device in a wrongful manner, and hence, of an attempt to commit a crime. Indeed, possession of such a device or purchase of one might very well be sufficient to establish probable cause to seize the device and arrest the person holding it on charges of an attempt to destroy a computer. But, this device would be merely powerful evidence of an intent to commit a crime, rather than something that is a crime to commit in and of itself. There are no international laws that govern this kind of thing. The only international laws applicable to individuals pertain to war crimes and nuclear and chemical weapons. Even then, most international laws direct member nations to adopt domestic laws on the subject rather than being self-executing.
My recollection is there's a big difference between money and property. I found a 1929 law journal article that supports my recollection. The owner of stolen property is entitled to have it returned. If the person who obtained it from the thief didn't know it was stolen, the person didn't commit a crime, but must give up the property and is not entitled to any compensation (unless the person can get compensation from the thief). A person who innocently receives money is the holder in due course, and gets to keep it. The victim's only recourse is to get compensation from the thief.