Isn't there a Fifth Amendment issue with this requirement? Self incrimination?
So this is a case where two amendments - income tax and self incrimination - can conflict.
I may be wrong, but I vaguely recall reading that criminal proceeds reported on an IRS tax form couldn't be used to prosecute the criminal. I think part of the argument is that a crook was obliged to report his criminal income but couldn't be required to be extremely specific about the
exact source of the criminal income.
Of course, if law enforcement becomes aware of any criminal income at all, they may decide to start looking for
other evidence - something they
can use.
(Hmmm . . . fair market value of stolen goods? In the case of a big jewelry or designer clothing & accessories heist, would that be retail price or what a fence would pay the crook? Or what he'd get at a flea market? I'm wondering about some of the flash mob "smash and grab" robberies we've seen recently out of California.)