Profits from an Illegal Business
Many people are aware that the famous American gangster Al Capone was sent to jail, not for his illegal activities involving alleged robbery and murder, but rather this failure to pay taxes on the resulting profits. As illegal revenues must be included into business income, related expenses are generally deductible. This can lead to interesting conclusions as evidenced by a 1999 publication of the New Zealand Inland Revenue Department. This publication provided a detailed list of items that could be deducted by what was referred to as "sex workers". Without going into detail, we would note that see-through garments and whips were on the list, provided they were used in delivering services to a client.