I’ve been asked about illegal income several times. Yes, you must report your illegal income on your tax return. If you don’t, you’re guilty of tax evasion.
Todd Olynciw seemed to be a model employee of the Hartford, the big insurance and financial services concern. He earned a company award after helping the company reestablish its New York office after the September 11th terrorist attacks. Mr. Olynciw was responsible for ordering and installing furniture and flooring for the Hartford.
Mr. Olynciw had a sideline business: he and other conspirators defrauded the Hartford. Given that the fraud amounted to $876,437, we’re talking a lot of furniture. Court documents show that some of the purloined furniture was sent to his brother-in-law for free. Some contracts were awarded to firms who performed work at Mr. Olynciw’s home according to this story in the Hartford Courant. And I should mention that Mr. Olynciw also received $395,720 in kickbacks.
Mr. Olynciw pleaded guilty to one charge each of mail fraud and tax evasion; he neglected to report the kickbacks on his tax return. He’s looking at up to 25 years at ClubFed plus restitution to the Hartford and the IRS.