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Yes, the IRS wants you to report stolen items – unless you return them
BY ADDY BINK - 03/24/23
(NEXSTAR) – If you haven’t filed your taxes yet this year – you have less than a month until the April 18 deadline – which means you still have time to report your income. While doing so, don’t forget to report income you collected from illegal activity or profits from items you stole.
Yes, you read that right. IRS guidelines say you must include in your income money made from illegal activities, like dealing illegal drugs or thievery.
According to the IRS’s Publication 17, “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.”
When will I get my tax refund?
When it comes to reporting stolen property, you’ll need to report the item’s (or items’) fair market value – unless you return the item in the same year.
The guideline is sometimes referred to as “the Al Capone rule,” Mark Steber, Chief Tax Information Officer at Jackson Hewitt, tells Nexstar.
“He made it famous a long time ago,” Steber explains. “Al Capone, and many others since then, many drug dealers, went to jail because all income is taxable unless it is specifically excluded under the law.”
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https://thehill.com/homenews/nexstar_media_wire/3909450-yes-the-irs-wants-you-to-report-stolen-items-unless-you-return-them/#:~:text=According%20to%20the%20IRS's%20Publication,your%20self%2Demployment%20activity.%E2%80%9D
