Bribery okay as long as you pay tax on it

The Internal Revenue Service (IRS) is an agency of the US government tasked with collecting income taxes from American citizens. It issues a 302-page tome titled Tax Guide 2011 (www.irs.gov/pub17) to provide guidance for its victims as they slink toward the slaughterhouse. On p92, under “Bribes”, we find the following terse advice: “If you receive a bribe, include it in your income.” Of course, the IRS subsequently taxes that income. 

What if we pay a bribe? Can we deduct it from our income? Alas, no. A separate volume, Publication 535, under “Bribes and kickbacks”, sternly warns us on p40 that “Engaging in the payment of bribes and kickbacks is a serious criminal matter. Such activity could result in criminal prosecution.” Payments of bribes and kickbacks “are not deductible for tax purposes and are in violation of the law”. 

Observe: The US government doesn’t mind if we accept bribes, and in fact wants to tax them; but if we pay bribes, the government does not allow us to deduct them from our taxable income, and threatens us with criminal prosecution.

I believe that there should be a taxpayer revolt on this issue, which seems to involve a double standard. If we have to pay taxes on the bribes we receive, surely the bribes we pay out ought to be tax-deductible. 

I considered writing to the US Department of Justice to demand that it prosecute the IRS for its inconsistency. But then I realised that the Department of Justice gets its funding from the IRS and is not likely to bite the hand that feeds it. Moral: Taxpayers just can’t win. 

Horace Beasley

Bangkok