The IRS Wants Americans to Report Their Stolen Property for Tax Purposes

by Victoria Santiago
irs-wants-americans-report-their-stolen-property-tax-purposes

There are apparently tax forms the IRS wants you to use if you have stolen any goods or made money illegally. This technically isn’t new, though, as the rule goes all the way back to 1927. In that year, there was a court case that determined that the IRS is entitled to taxes on illegal items and money. “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.” Al Capone was convicted of tax evasion under this law.

When it comes to illegal activity, it doesn’t actually matter which avenue taxpayers go. When filing taxes, they’re expected to report any kind of illegal income at all. That could come from selling illegal drugs or stealing property of any kind.

Many people on Twitter found the law to be ridiculous. Can the government really expect criminals to report all of their income? Many people doubt that. On the other hand, a lot of people also brought up Al Capone’s tax evasion conviction. Twitter user @AndreaSJames tweeted: “IRS isn’t playing around. Nothing stuck to infamous mob boss Al Capone, until he got pinned on tax evasion in 1931.”

Illegal Goods Tax Law Is Used for Social Media Jokes

When people rediscover things on social media, there’s bound to be some good jokes about it. This tax law is no different. One Twitter user, @DtJ_Rinzler, joked “Life hack: Return stolen property before doing your taxes, then steal it again, to avoid a second crime of tax evasion.”

Even police departments are getting in on the fun. The Erie County Sheriff’s Office posted on Facebook encouraging people to document any illegal money they had. These posts are always fun because they end with a gotcha moment. “Attention all car thieves. The stuff you stole from people’s vehicles in 2021 must be claimed on your income taxes,” they posted. Of course, the Sheriff’s Office followed that up by saying, “If you need an itemized list of property call us at 716.858.2903 & a Deputy or Detective will be happy to meet you with the list. It would be our pleasure.”

IRS 2020 Refund Delays

Significantly less humourous, some six million 2020 tax returns still need to be processed by the IRS. An already slow process has become downright painstaking due to COVID-19 and the number of returns left. For some people, this means that they won’t receive their tax return from 2020 until 2022. A host of issues have all caused the tedious process to slow to a halt. In addition to updated tax laws, some returns need special attention or have mistakes that need to be fixed.

For simple returns, the process usually only takes 21 days. For special cases, this can increase to 120 days. The best way to get through the process is to file as accurately as possible. If things need to be changed afterward, provide the most up-to-date information that you have. For anyone still waiting on yours, it looks like you might be waiting a little while longer.

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