IRS Requires Reporting of Illegal Income, Including Drug Dealing and Stolen Property

SALT LAKE CITY ( ) — As tax season unfolds in the United States, Americans are faced with the daunting task of accurately reporting their income to the Internal Revenue Service (IRS). Among the various sources of income that must be reported, the IRS explicitly requires individuals to disclose earnings from illegal activities, including drug dealing and stolen property.

According to the IRS website, income from illegal activities, such as proceeds from dealing illegal drugs, must be included in the taxpayer’s income on Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if derived from self-employment. Additionally, stolen property’s full market value should be reported as income in the year it was stolen, unless it is returned to its rightful owner. Bribes are also considered reportable income. The only exception to reporting monetary gains is when they are exempted by law.

Notably, infamous gangster Al Capone was convicted of tax evasion for failing to pay taxes on his illegally-obtained wealth. During the Prohibition Era of the 1920s, Capone’s bootlegging crime syndicate was estimated to gross around $105 million annually. However, no income tax return had ever been filed in his name. This conviction followed a U.S. Supreme Court ruling a few years earlier against Manley Sullivan, who also failed to report profits from his illegal schemes.

The Kaysville Police Department in Utah humorously commented on the IRS’s interest in taxpayers’ financial intrigue, stating, “The IRS seems to have a knack for craving the drama in your life. It’s as if they’ve set up shop with popcorn and a front-row seat, eagerly waiting for taxpayers to drop bombshells of financial intrigue.”

CrimeDoor
Author: CrimeDoor

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