IRS Offers Warning to Return Stolen Goods to Avoid Paying Taxes On Them
Attention all thieves, the items you stole in 2021 must be claimed on your income taxes.
Whether you stole a car this year, took a kickback, accepted a bribe, or participated in some type of other illegal activity that resulted in providing you with income, the Internal Revenue Service released information today that stolen property falls into the category of “other income” obtained throughout the year and must be reported on your taxes.
However, the IRS is giving you an out to avoid paying taxes on the illegal activity. If you happened to steal property in 2021, it must be reported as fair market value in the year you steal it unless you return it to its rightful owner in the same year, the IRS guidelines from 2021 Publication 17 describes.
The IRS requirements go on to detail that any income obtained from illegal activities, like dealing drugs, must also be claimed on a taxpayer’s 2021 filings. It is to be included in Schedule 1 (Form 1040), line 8z, or on Schedule C (Form 1040) if from a self-employment activity
The requirements also clearly details that if someone receives a bribe, side commissions, push money, kickbacks or similar payments, that income must also be reported on Schedule 1 or Schedule C.