This system is a mess. In my game the npcs keep finding stolen items in my gear and I have checked it three times and there are no stolen items in there. I am currently in a reload cycle trying to figure this stuff out and systematically remove everything from all three characters that are being searched to find out what causes this. If they had to make the npcs omniscient and discover everything about your items in a glance they should at least make it easy to figure out which items they discover. And what is up with the "stolen" tag, anyway? I know that I have stolen gold before yet I only have one big giant cache of gold in my inventory without the tag. My guess is that the stolen tag items somehow stacked with the untagged items removing the visual tag but still being detected by the npcs. I can't explain this any other way.
Check it again. Steal and let one character at a time be searched.
I had the same problem and checked my bags many times, to no avail, then later by chance I recognized a damn needle with the stolen tag I had overlooked in any check.
