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It‘s always funny and surprising to non-insiders, but tax law and criminal law don‘t have that many touchpoints. If you pay extortion money or bribes as a comp
by endymi0n 5y ago
It‘s always funny and surprising to non-insiders, but tax law and criminal law don‘t have that many touchpoints.
If you pay extortion money or bribes as a company, it‘s not just that they‘re deductible, you‘re actually obligated to account for them.
Being illegal and being deductible don‘t have to do anything with each other.
Don‘t forget Al Capone was actually convicted for tax evasion in the end, as even illegal businesses have to pay taxes.
- thepangolino 5y agoWait wait wait. So if I want to pay bribes, I can just say that I have been extorted that money and all will be legit?
- gambiting 5y agoDo you have a police report to go with it? If yes, then sure.
- beckman466 5y agoShhhh you’re stealing business from my new tax consultancy startup
- deleted 5y ago[deleted]
- unixhero 5y agoWow that was fast.
- throw737858 5y agoYeah, right. And criminals will give you an invoice with their tax ID.
- melomal 5y agoI remember seeing that there is an actual section dedicated to income from illicit income in the tax forms. Which is honestly amazing to see, and confusing too.
- kwhitefoot 5y agoI suspect that it being tax deductible is probably only true in the US. Perhaps there is a UK, European, or other jurisdiction accountant on HN who could comment?
- Hermel 5y agoBy default, all expenses reduce your profits. Unless there is a specific exception, ransom is just another expense and should therefore be deductible.
- toomanybeersies 5y agoI'm pretty sure bribes specifically aren't tax deductible: https://www.irs.gov/publications/p535#en_US_2020_publink1000209180 https://www.irs.gov/publications/p535#en_US_2020_publink1000...
- gruez 5y agoIs a ransomware payment a bribe? The linked page doesn't really say what constitutes a "bribe". The next paragraph says that it only covers illegal activities, which AFAIK isn't the case for ransomware groups unless they're a designated terrorist organization or something.
- toomanybeersies 5y agoAs far as I'm aware, ransomware payments wouldn't be considered a bribe. They're more similar to an expense incurred due to `kidnapping for ransom`, which is deductible. So in summary: - Kidnapping for ransom expenses are deductible - Bribes are not deductible - Ransomware payments may be deductible
- azernik 5y agoAnd more importantly, the income you get from accepting bribes needs to be reported and taxed.