Every morning at work, I read through different news article online. I usually find a few that catch my attention, but this particular article really has me lost for words. At first I thought it was a joke until I realized the story was on the CNN Money website.
According to the article, the IRS states that the federal government is requiring you to claim any money you've acquired illegally and for it to be taxed as if it was obtained legally.
The IRS tax instructions states: ""Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity."
I wonder if Ray Ray and dem from up the block know about this.
Surprisingly enough some have actually claimed money they've earned illegally. It's usually the criminals that were either caught or about to get caught. That way they aren't charged twice for their original crime and evading taxes. Their original crime may be a misdemeanor, but evading taxes is a felony.
Now some people would say, “well what if I claim my illegal warnings, wouldn’t I end up getting caught?” The answer to that question is no. Due to privacy laws, the IRS is not allowed to notify the police or any other agency or disclose any information to any inquiring company without a court order. The only exception to that is if the crime you might have committed involved any sort of terrorism. The IRS would still need a court order to disclose the information but they can initiate the process themselves.
This same rule goes out to people that accept jobs that pay under the table. If your employer decides to pay you under the table or off the books, you are still required to claim that money. Your employer will not suffer any punishment if you claim it, but if you do not claim it and is later brought to light, you then face tax evasion charges.
The government will make sure they get money that is owed to them, but if they owe you money…good luck getting it!
For more on this story go to CNN Money.