is there a way to give the irs tax over money that is illegal?

Question

do they have a special form where you can pay your taxes on drug money

Answer 1

It is not a special form, but ALL persons who earn money in the US have the right and obligation to pay their taxes. There are no deductions or credits allowed on income derived from illegal activities.
On US Individual Tax Form 1040, Line 21. There is a space to put the amount. Also, you will need a Sch. C. and indicate what type of income this is.

Answer 2

I will assume this is a serious question. Many people in illegal enterprises over the years have ended up in jail not over their illegal business, but for tax evasion. Al Capone might have been the most famous of these.

You can use a schedule C to declare income from a business, legal or illegal. There is a list of business codes on pages C-8 through C-10 - you have to put one of these codes on the schedule C. Read thru the list and pick out something that sounds close.

Filing a return and paying taxes on the money doesn't make the money or how you are earning it legal, but at least it gets you off the hook for charges of tax evasion.

Answer 3

I disagree with the post above, you cannot deduct COGS for illegal drug. See IRC 280E. It is against public policy.

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Any tax advice included in this written or electronic communication was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed on the taxpayer by any governmental taxing authority or agency.

Answer 4

Drug Money?? While I applaud your honesty for wanting to pay taxes on your drug money, the process of turning illegal funds into legal funds is known as money laudering and can get you into as much trouble as the drug dealing.

Surely you have seen the movie Scarface and how he was caught laundering his money. if not watch it, it is a great film and a good morality piece.

Money laundering goes on all the time and is necessary because of the controls in place designed to catch people with large amounts of cash. My advice is not to try and launder the funds and to find a more legitimate profession.

Answer 5

YES YOU CAN!
just use 1040 schedule C
if is illegal drug business you can only deduct Cost of Good Sold
if is any other kind of illegal business you can deduct most of your business expenses

good luck lol