- The IRS would like to remind you to report any and all money you acquired from illegal activities.
- This includes money from drug dealing, stolen property and more.
- Famously, Prohibition-era gangster Al Capone was popped for tax evasion by federal Treasury agents.
Nice try, IRS.
This year, the folks at the IRS would like to remind you to report any and all money you acquired from illegal activities. That’s right —it’s considered income, so don’t forget to write down how much you made from your hitman-for-hire business and your drug dealing side hustle.
Sounds crazy, but they really, really want you to do it.
In IRS Publication 17, the IRS says, “income from illegal activities, such as money from dealing illegal drugs” must be included on a taxpayer’s 2021 filings. It is to be included in Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from a self-employment activity.
A trap worthy of Wile E. Coyote.
“All income, from whatever source, is taxable income, unless excluded by an act of Congress,” Gary Schroeder, a Maryland-based tax preparer, told NBC News. “If you receive $500 to kill your neighbor’s annoying rooster, or find $1 on the street, or embezzle from your employer, that’s all taxable income, as well as your paycheck from flipping burgers at McDonald’s.”
And here’s some filing advice for all you thieves out there, free of charge: “If you steal property, you must report its fair market value in your income in the year you steal it unless you return it to its rightful owner in the same year,” the IRS says.
We know how important good bookkeeping and tidy taxes are for thieves.
“In practice, it’s rare for those who break the law to then turn around and dutifully log their ill-gotten gains for the government to review. But there are exceptions,” NBC News reports. “People who are convicted or expected to be convicted of embezzlement will report the income to avoid getting prosecuted for tax evasion on the proceeds.”
Famously, Prohibition-era gangster Al Capone was popped for tax evasion by federal Treasury agents after law enforcement failed to get him on bootlegging, murder, robbery and more.
If only he had written down income he received from all his illegal activities and then sent it off to the government.