As tax season approaches, once again, there are a few things we must remember when filing this year and that includes illegal activity, bribes, and stolen property.

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You just read that correctly. The IRS wants a cut of all the action, not just the legal stuff.

Twitter user Litquidity Capital recently posted an excerpt from the IRS website that has been making the rounds. Guess what? The following is all true and verified by the IRS.


If you'd like to verify this info, it's easy to find in the Federal Income Tax Guide. Just scroll down to page 75 and that's where you'll see the feds wanting in on the action you've illegally maintained throughout the year.

So, if the government can tax illegal activities, then does that make those activities legal or is the government just benefitting from illegal activities? Obviously, that's a question the government will never answer. However, you're still required to report said financial gains.

What I find extremely funny is that the IRS states we must report illegal activity, such as bribes, but they also state that "illegal bribes" are part of their list of "nondeductible expenses".

So, there you have it in black and white. Even though bribes are illegal, you must still report your income from said source. However, said illegal activity is nondeductible.

I can't make this stuff up...only the government can, which leads us into really sticky territory. Let's say I stole a TV from Target, but that TV is stolen from me, do I report that stolen TV as a loss?

While much of this article is a tongue-in-cheek response to the latest tomfoolery from the IRS, it still doesn't negate the fact that you must report illegal activity, bribes, gains from drug deals, and stolen property on your tax return.

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