Just FYI, The IRS Requires You to Report Stolen Goods as Income
You’ve probably heard it said before that you’re supposed to report any money you earn to the IRS. Well, it’s true; take it from someone whose best friends have worked in banking and tax preparation for years now. If you make money, you should be reporting it on your taxes. That doesn’t mean that everyone does do it, but you know, sometimes you roll the dice and see what happens.
But all that money you’ve been making all of your drug deals (YES STEVE I’M TALKING TO YOU), you should be reporting if you want to avoid a potential audit.
The government always wants their cut when it comes to taxes. Take New York state, for example. Did you know you have to pay tax on the purchase of a used car? Never mind that the original owner already paid tax on it when it was purchased new. But now you have to pay tax on it again when you buy it used. Is it any surprise then that if you sell drugs, steal things, or are a sex worker you must report that income?
This isn’t something new that the Biden administration cooked up, ok? According to NBC News, this has been on the records for years. It’s just gained some recent attention through social media.
It’s not the only odd thing to appear on tax statements, either. Did you know that in Pennsylvania, Alabama, Arkansas, and Mississippi, you have to declare your restitution payments from damages due to Nazis? For all the other states you can file a convenient exemption form to make sure your Nazi restitution payments aren’t taxed.
What you also may not know is that the IRS can’t actually report you to the police for reporting income from an illegal action. The IRS can come after you and get the police involved if you don’t pay your taxes or try to cheat on them, but if you report $50,000 in cocaine sales and distribution, well, the IRS can’t report that to law enforcement unless a law enforcement agency requests a court order to obtain your records. Or as the IRS puts it directly:
IRC 6103(i)(1) provides that, pursuant to court order, return information may be shared with law enforcement agencies for investigation and prosecution of non-tax criminal laws.IRS.gov
If the police don’t ask for a court order to review your taxes, then the IRS can’t report it. Essentially, when it comes to filing taxes, all the IRS cares about is that you report the money you earned and you don’t try to screw them over on it. If you do, that’s where they can get you in trouble with the law, fast. That’s why, according to the NBC News article mentioned previously, there are some people on their way to jail for embezzlement who will amend their taxes to include the embezzled income that way they avoid further criminal charges for tax evasion from the IRS.
Former Supreme Court Justice Oliver Wendell Holmes Jr. once stated in a court opinion that “Taxes are the price we pay for civilized society.” In that sense, it’s kind of ironic that illegal activities would help fund a civilized society…but the government does love its money.
So as this is written at the start of January, and W2 forms will eventually be making their way into the hands of employees, just remember to make some time for those 1099 forms so you can report all your ill-gotten gains.