Site not look beautiful? Click here

As We See It

Pimp tax: How the IRS dances with illegal income

Like Chicago gangster Al Capone, Vegas pimp Johnny Ray Taylor is answering not only for his illegal activities but also for not declaring the subsequent income on his taxes. The Las Vegas Sun reported last week that Taylor pled guilty to one count of tax evasion for “pandering and living from the earnings of a prostitute” and then hiding the cash.

Taylor has agreed to pay more than $117,500 in restitution for illegal income earned over three years, because the law treats compensation for services—whether you’re giving oral sex or a haircut—pretty much the same. The IRS site instructs that “other income” from shady activities such as drug dealing has its own line on Form 1040. Bribes, too. (On a totally random tangent, even the pittance we earn from jury duty is taxable!)

CNNMoney did an eye-opening piece on illegal income around tax time this year, indicating that crooks tend not to report crooked dollars unless they’re caught or about to be. Even when they do declare, as Taylor is now doing, it’s not like he keeps receipts. Auditors may have a hard time verifying his claims. Whatever they find, they can’t just call the cops. Without a court order the IRS can’t disclose an individual’s crimes to other agencies, though two expert sources told CNNMoney that might not be so true in practice.

Still, you gotta hand it to the IRS for trying to play fair. The story points out that in some cases, restitution paid for illegal income is tax deductible.

Tags: News, Opinion
Share
Photo of Erin Ryan

Erin Ryan

Erin got her first newspaper job in 2002 thanks to a campfire story about Bigfoot. In her award-winning work for ...

Get more Erin Ryan

Commenting Policy

Previous Discussion:

  • The much-demanded app is finally here! So now what?

  • Chatting with Mike Tyson: “I want to stay home and stay away from all the bullsh*t because I’ve been there before. I know what that ...

  • If elected, Lauren Scott will be the first openly transgender state legislator in Nevada—and the U.S.

  • Get More As We See It Stories
Top of Story