If a criminal has trade or business income from illegal activities, the income:

It's right there on the official IRS tax instructions: "Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity."

Explanation:

Answer Link

Lafaelis Lafaelis · Answer 2 · 2020-11-01T02:56:20+01:00

Illegal activities:

Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21, or on Schedule C or Schedule C-EZ (Form 1040) if from your self-employment activity.

Extra:

Taxation of illegal income in the United States arises from the provisions of the Internal Revenue Code (IRC), enacted by the U.S. Congress in part for the purpose of taxing net income.[1] As such, a person's taxable income will generally be subject to the same Federal income tax rules, regardless of whether the income was obtained legally or illegally.

Hope this helps!