As almost every American adult knows and fears, Monday, April 15th is Tax Day. Every year, taxpayers comb through each income statement required by the government, along with random receipts that may result in some deductions from the amount they expect to pay.
The IRS wants to remind taxpayers that if you made money last year through illegal activities, such as stealing, selling illegal drugs, or taking bribes, you are also taxable.
Last year, Americans spent 6.5 billion hours paying taxes, which translates to about $260 billion in lost productivity. This is in addition to the $104 billion actually spent on direct costs of filing and preparing taxes.
Much of this complexity comes from the amount of deductions and installments allowed by tax law and the types of earnings that must be treated as taxable income.
IRS Publication 17 “covers the general rules for filing federal income tax returns.” In its latest edition, the IRS states, “Income from illegal activities, such as money from illegal drug transactions, must be included in income on Schedule 1 (Form 1040), Line 8z, or Schedule C (Form 1040) if: Your self-employment activities From.”
What this means is that even if you engage in activities the federal government is completely against, such as selling heroin on a street corner, Uncle Sam still expects you to get a percentage.
The IRS advisory also includes a section on “stolen property.” “If you steal property, you must report the fair market value of the property as income unless you return it to its rightful owner in the year it was stolen.” year.”
Returning stolen items doesn't prevent you from being charged with theft, so it's good to know that the IRS will at least give you a pass on the tax stuff.
Ultimately, the IRS guidance perfectly summarizes how absurd much of the tax code is. In a separate notice, the agency advises reporters to “keep records indefinitely if you do not submit a report” or “if you submit a false report.” This is because there is no statute of limitations on failure to file or filing a false return and the IRS can come after you at any time in the future.
This rule dates back to the Prohibition era. When authorities were unable to link gangster Al Capone to his illegal dealings (trafficking, gambling, and murder), they charged him with tax evasion and convicted him for failing to report his income.
Let this be a lesson to you. If Capone had reported his racketeering income and kept his tax returns forever, he might have gotten away with it all.