“Don’t do anything illegal,” says the government. “Hey, where’s my cut?” Also says the government. I’m Amy E. Feldman.
Deanna Martin was a marijuana dealer, a pretty successful one, until she wasn’t. Her company grossed more than fourteen million dollars in revenue from 2016-2018 when she was arrested. She was recently sentenced to more than four years in prison for intent to deliver marijuana and tax evasion for failing to report her earnings from it.
According to IRS regulations, you must report all income from whatever source derived—including income from illegal activities, such as money from dealing illegal drugs, according to an IRS publication. Good news, though: if you’ve reported the income from those illegal activities, you can deduct the cost of restitution you’ll have to make once you’re convicted of them. Or, and hear me out, maybe don’t make money from illegal activities. That’ll show the IRS.