Ask ZiVA 728x90 Ads

 

IRS Asks Americans To Pay Tax On Illicit Income

United states' Internal Revenue Service (IRS)
THEWILL APP ADS 2

December 31, (THEWILL) – Have you received any bribes lately? Embezzled from your company? Got any stolen goods? The IRS would like to know if you are an American.

Shocked at those questions? Don’t, because the United states’ Internal Revenue Service (IRS) has asked Americans to pay tax on illicit income as stated in the US Tax Code.

According to the IRS, individuals who profited from illicit acts such as drug dealing or bribes, must include it in their 2021 tax returns. If it comes from a self-employment activity, it should be reported on Schedule 1 (Form 1040), line 8z, or Schedule C (Form 1040). This includes sales from dealing drugs, embezzling, etc.

Taxation of illegal income in the United States arises from the provisions of the Internal Revenue Code (IRC), enacted by the U.S. Congress in part for the purpose of taxing net income. As such, a person’s taxable income will generally be subject to the same Federal income tax rules, regardless of whether the income was obtained legally or illegally.

The Internal Revenue Service’s Publication 17, contains a section on stolen property.

According to the IRS, income from stolen goods or other illegal activities must be reported when Americans file their taxes.

“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 guideline states.

“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”, the Tax Code stated.

The IRS also noted that thieves must report the value of the goods they stole, unless the goods are returned to the “owner in the same year.”

“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 Code added.

The requirements also made clear that if you receive a bribe, you must “include it in your income” and said that taxpayers must also “include kickbacks, side commissions, push money, or similar payments”.

On Tuesday, the Erie County Sheriff’s Office in Buffalo, New York, offered support for “all car thieves” who need an itemised list of the property they stole, so it can be reported on their income taxes.

“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 itemised 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 sheriff’s office wrote.

The issue of reporting illicit income to the government has raised questions even in the United States’ highest court.

A case at hand was in 1927 (United States v. Sullivan), where the US Supreme Court considered whether prosecuting criminals for evading taxes on illegal income violated the Fifth Amendment, the provision of the Bill of Rights that protects against self-incrimination.

In that case, a South Carolina bootlegger challenged his conviction on federal charges on the grounds that he could not be required to incriminate himself by declaring illegal income.

However, in a unanimous opinion, Justice Oliver Wendell Holmes Jr. rejected that argument.

Nearly a century later, that court opinion still stands. Since then, many criminals have been convicted of tax evasion in a similar manner, including Al Capone in 1931.

According to the Internal Revenue Service (IRS), income earned from criminal behavior must be declared on your taxes.