If you’re doing any year-end accounting in preparation for filing your 2021 taxes, here’s a tip to keep in mind: Don’t forget to report the money you made while felony.
This has been a trending topic on social media for the last few days. Looks like it all started with the post Twitter And instagram From accounts related to Litquidity Capital, the unnamed financial observer who has been described as “Wall Street Maillord.” The posts simply declared: “Remember to report your income from illegal activities and stolen property to the IRS.”
Litquidity Capital is accurate, at least given the IRS rules it’s designed for. Publication 17, As the IRS notes, “income from illegal activities, such as income from the business of illegal drugs, must be included in your income” declarations. Similarly, it says, “If you steal property, you must report its fair market value in your income in that year, unless you return it to its rightful owner in the same year.”
IRS officials did not respond to a Businesshala request for additional comment.
The world has paid much attention to the ideas of Litquidity Capital on this strangeness of our tax code. The Twitter post has been shared over 6,700 times, while Instagram has nearly 40,000 likes.
Here are the gems in the reactions on Twitter:
This all entertains the person behind Litecoin Capital, who spoke to Businesshala on an anonymous basis. The social media maven said the posts were inspired by a comment she’d recently heard about this strange tax rule — and she doubted it was true. “I thought, ‘There’s no way,'” he said.
But when he dug into the IRS code, he confirmed it was genuine. And it was something very unbelievable that didn’t have to be shared with the world, he thought. “You can’t make it,” said the person.
At the same time, the Litquidity Capital commentator-in-chief noted that the rule essentially kept infamous gangster Al Capone. In prison in 1931, In fact, a 1927 Supreme Court case, United States v. Sullivan, paved the way for the government’s case against Capone—the 1927 case essentially declared that Criminals had to pay their fair share of taxes For them, ahem, earnings.
Still, tax professionals who contacted Businesshala say they’re hard-pressed to remember the time a potential customer came to them, wondering whether they needed to declare their earnings from a bank robbing. Is.
“It’s ridiculous to think that someone in this situation is going to say, ‘I want to pay taxes because it’s my patriotic duty,'” says Richard Rampel, a retired Palm Beach, Fla., accountant who worked in the industry. done, say. About 50 years.
However, Rampel points to a number of nontraditional benefits that must be reported to the IRS, ranging from the value of goods earned through barter to money earned from gambling. Technically, even coins found on the street count for something, notes Rampel. “That’s income,” he says.