The old adage is crime doesn't pay, but one certainly can wonder sometimes about the accuracy of it given the number of politicians that look as if be baddies! Regardless, the fact you are making money from an offence doesn't mean you don't have to pay taxes. Correct. The IRS wants its unfair share of the ill gotten gains! What it is as your 'income' tax has male tax brackets each with its own tax rate from 10% to 35% (2009). These rates are used to your taxable income which is income for upw...