The IRS is asking people to report income from illegal activities and urge people to report any property they have stolen on their tax return.
Last Monday, December 27, screenshots on twitter went viral showing IRS guidelines to report stolen property or illegal activities.
This is not just a Tweet, the guidelines are real under the IRS Publication 17.
The sections say –
Stolen property. 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.
Illegal activities. Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from your self-employment activity.
The guidelines require those who have stolen property must report market value as income in the same year the item was stolen. Those who have stolen can avoid having to pay taxes as long as they return the stolen property to the rightful owner.
The Twitter Post gained a lot of attention. One person responded saying, “So once you report your stolen stuff you legally get to keep it right? Asking for a friend.”
“It’s important not to break the law when breaking the law.”
“You missed where it includes bribes and kickbacks as nondeductible items.”
As crazy as this appears, the guidelines have been around for years.
It is not common for those who break the law to actually report this. However, people who are convicted of embezzlement will report the income to avoid getting prosecuted for tax evasion.
Sharing your illegal activities is supposedly not very risky since tax returns are confidential and the IRS can’t share the information unless law enforcement has a case to access the records.
This all comes as a reminder to criminals and everyday Americans that anyone who made more than $12,550 in 2021 is required to file their taxes by April 18, 2022.