If you tell the IRS you made $1 million from stealing money or dealing drugs, does the agency tip off the cops?...Legally, it can’t, unless a law-enforcement agency gets a court order granting it access to a specific taxpayer’s return. The IRS isn’t supposed to proactively alert other agencies about misdeeds unless terrorism is involved. In that case, it still needs a court order to disclose anything, but the IRS can initiate the legal process on its own....In practice, Moskowitz says he thinks information about illegal activities gets shared.
“Do they report you to other agencies?” he asks. “Absolutely.”
Other experts agree.
“The IRS would most certainly immediately report it to law enforcement,” says Joseph Henchman, vice president of legal and state projects at the Tax Foundation, a think tank.
The IRS’ spokesman declined to comment on the issue.
Seriously, Would you actually report your illegal income if you had it? Apparently some do in order to avoid more charges but isn't this just setting yourself up for investigation? I don't condone illegal activity* and I guess I don't know enough to be sure, but to me this seems like a hidden form of entrapment and a violation of the 5th Amendment.
*any form of dissent or acting against the Government is considered illegal however there does come a time.Not that I am in any way perusing illegal action.
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