One of the questions that comes up from time to time is whether you have to pay tax on illegal income. After all, do thieves really report their thefts to the IRS? I usually remind those questioning this that Al Capone went to prison for tax evasion, not for the murders he committed.
What brought this up is a story from Rogers, Arkansas. Douglas Haase was an employee of Kraft/Nabisco. He thought up an almost perfect plan. He would submit fake expense reports to two conspirators in Florida, and they in turn would send checks through a sports management firm so that he could pay off his personal credit cards. And this wasn’t a small amount of money—Mr. Haase apparently received $1.5 million from this scheme. Mr. Haase will have three years to think about this while at ClubFed. He also has to pay a $150,000 fine.
So if you decide to go into a life of crime, just remember to set aside some of your ill-gotten gains to pay your taxes.