Jack Strauss

There are two times in a man's life when he shouldn't gamble. When he can't afford it and when he can. In the case of Big Julie, the only thing he couldn't resist was temptation. Consequently, when Nicely Nice slithered up to him in a bar and confidentially told him in a low whisper -- with his hand partially over his mouth so no one could hear -- that a horse race had been fixed, Big Julie slipped him $250 to be on the horse that Nicely had assured him was fixed to win the race. Actually, the only fix Nicely Nice knew about was the financial fix he was in and he vanished completely from sight with Big Julie's 250 smackers.

While Big Julie was willing to take his loss philosophically, the Internal Revenue Service was not when Big Julie deducted the $250 from his income tax return as a loss due to theft.

"I was parted from my money," Big Julie told a revenue agent, "as if Nicely had picked my pocket!"

"It was your own fault," responded the agent. "You were a victim of your own dishonesty. You were ready to participate in fraud, a fixed race."

When the deduction was disallowed, Big Julie took the matter to court.

If you were the judge, would you allow the deduction?

This is how the judge ruled: Yes! The judge held that Big Julie never became party to defraud others since the purported scheme -- the alleged fixed horse race -- never existed. It was only a pretense to deprive Big Julie of his money. Therefore, concluded the judge, Big Julie was the victim of a theft and entitled to make the deduction.

-- based upon a 1956 United States Court of Appeals decision

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