The Internal Revenue Service requires that stolen property be claimed as income, in addition to any money made from other illegal activity.

These IRS rules are creating buzz across Twitter, causing some people to question the rules' validity.

"It's amusing some people don't know you have to report your illegal activity and things you stole," Brian Streig, a certified public accountant in Texas, tweeted in response. "Does nobody remember how Al Capone was brought down?"


The IRS 2021 federal income tax guide notes the rule. The only catch is if the property is returned.

“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,” the guide states.


The guide also states that any income earned from illegal activity, “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."

While the rule is raising some eyebrows, the Mob Museum noted that the rule has been around since 1922 when a South Carolina man, Manly Sullivan, was convicted of evading federal taxes on income earned through “running illegal whiskey."

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Sullivan appealed the rule in 1927, claiming his Fifth Amendment right not to be required to incriminate himself. The United States Supreme Court rejected his argument unanimously.