Posts tagged: illegal income
With tax day looming, career criminals should take note.
The IRS is advising that all earnings, including those obtained illegally, must be reported as income for tax purposes. Additionally, criminal enterprises are ineligible for the types of business deductions enjoyed by companies engaged in lawful activities.
Before simply dismissing this as a bunch of bureaucratic nonsense, keep in mind that uber gangster Al Capone was taken down not for extortion or murder but on tax evasion for failing to report his ill-gotten gains to the IRS.
Here's how the advisory appears on the IRS website:
Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.
Potential benefits for disclosing illegal income include the possibility of being able to deduct it from future tax returns if you're ever convicted later and ordered to pay restitution.
Remember, don't shoot the messenger.