[endymi0n]

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.

[toomanybeersies]

I'm pretty sure bribes specifically aren't tax deductible: https://www.irs.gov/publications/p535#en_US_2020_publink1000...

[gruez]

Is 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]

As 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

[thepangolino]

Wait 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]

Do you have a police report to go with it? If yes, then sure.

[beckman466]

Shhhh you’re stealing business from my new tax consultancy startup

[unixhero]

Wow that was fast.

[melomal]

I 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]

I 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]

By default, all expenses reduce your profits. Unless there is a specific exception, ransom is just another expense and should therefore be deductible.

[azernik]

And more importantly, the income you get from accepting bribes needs to be reported and taxed.