I could be wrong, but if someone is willing to take a chance on getting caught selling drugs or looting a store, there is little chance they would not take a chance on getting nabbed for income tax evasion. But, I have to wonder if anyone ever declares the value of stolen goods on their federal income tax forms. With all of the million dollar lootings taking place in blue cities anyone who would declare fair market value could end up owing money.
From the IRS guidelines:
“Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from your self-employment activity.”
According to the 2021 IRS guidelines from their Publication 17:
“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 requirements can be found at IRS.gov within their guidelines explains how you need to go about declaring illegal income from criminal enterprises. I wonder if hookers can write off the depreciation on their assets when filing. Can they claim their pimp as a dependent? Inquiring minds want to know.
The Erie County Sheriff’s Office in Pennsylvania posted:
“Attention all car thieves, The stuff you stole from people’s vehicles in 2021 must be claimed on your income taxes.
If you need an itemized list of property call us at 716.858.2903 & a Deputy or Detective will be happy to meet you with the list, It would be our pleasure.”
The rule dates back to a Supreme Court case in 1927 that decided that the government is allowed to tax illegal income. It was famously used to pin charges to legendary mobster Al Capone, leading to his takedown after he was convicted for tax evasion under the law in 1931.
Hopefully, some really stupid criminals will end up reporting some of the stolen property and crimes to the IRS, which should allow for law enforcement to go round them up, but in today’s clown world that is unlikely to be the case.
Nevertheless, the Erie County Sheriff’s Office in Pennsylvania posted an encouraging message to Facebook for any criminals who stole something this year, urging them to file their taxes with all of the required info.