Started by steve58, December 29, 2021, 04:32:17 PM
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QuoteStolen property. If you steal property, youmust report its fair market value in your incomein the year you steal it unless you return it to itsrightful owner in the same year.https://www.irs.gov/pub/irs-pdf/p17.pdf
Quote from: Senex on February 11, 2022, 05:57:41 PMYep, as a former IRS auditor, I can confirm that illegal income is still taxable income. We didn't judge (usually). In fact, part of my job was to look in the paper for people who had committed profitable crimes. Embezzled half a million from your company? Fine with us, as long as you declared it as income. (If you disguised it as something else on your 1040, we understood.) If you didn't disguise it and put on your return that you made $80,000 as a hooker or a burglar, then we have no problem with you and won't report you to the cops. In fact we can't tell the cops. Tax privacy laws made it illegal for us to do so. (There were two exceptions : income from illegal drug sales or child pornography.)I only did it for a year, but I came away with a lifetime of amazing stories. One guy was being pursued in a county-wide manhunt for child molesting. On the run or not, he still showed up right on time for his tax audit. The police were waiting for him in the lobby as he came out of my office. (I'm pretty sure that his ex-wife - who was being audited for the same return - had dropped a dime on him.)