As you wind down the year, cleaning out drawers and emptying wallets of receipts, don’t forget to report to the IRS any income you brought in from drug deals, bribes, stolen goods, prostitution or other illegal activity.
According to IRS publication 17, the Internal Revenue Service wants taxpayers to include on their forms “income from illegal activities, such as money from dealing illegal drugs.” Make sure you put that on “Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from your self-employment activity,” the IRS wrote.
The agency also requests that “if you steal property, you must report its fair market value,” but only if you don’t “return it to its rightful owner in the same year.”
The somewhat obscure provisions went viral this week after a popular finance-meme social media account and daily newsletter author pointed them out.
The IRS didn’t immediately return an NBC News request for comment.
Humorous as they appear on their face, the statutes are law and have been on the books for years. Prohibition-era gangster Al Capone was indicted on tax evasion after prosecutors alleged that his stated income didn’t match his lavish lifestyle.
“All income, from whatever source, is taxable income, unless excluded by an act of Congress,” Gary Schroeder, a Maryland-based tax preparer, said. “If you receive $500 to kill your neighbor’s annoying rooster, or find $1 on the street, or embezzle from your employer, that’s all taxable income,…
