It may sound like a strange way to lower your tax bill, but if you’ve stolen any property, you still have time to give it back.
Under the IRS guidelines from 2021 Publication 17, “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.”
It may seem strange, but the U.S. Supreme Court ruled in a 1927 case that the government is entitled to taxes on illegal income, WIAT reported. Criminals like Al Capone have been convicted for tax evasion using that ruling.
Regardless of whether the property is stolen or the money is otherwise obtained illegally, the IRS says, “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.”
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