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[Question was: IRS requires you report illegal income on your taxes. Does this violate your 5th Amendment right not to admit crimes?]

It wouldn't be if the reporting of it doesn't trigger any sort of police investigation. That is, if I report $35,000, and enumerated this simply as "illegal income," and the IRS held this confidential, then there would be no 5th Amendment violation because it would not constitute testimony against oneself.

If IRS comes snooping around, and their ONLY inquiry is whether you're paying the right amount of taxes, and they don't tell the Navy about your submarine-eating "tanker," or the county tax assessor about the secret underground headquarters, or the FBI about the stolen space shuttle... then in theory they haven't violated the Fifth Amendment.

"Okay, Mr. Blofeld, we're satisfied that James Bond destroyed your stolen nuclear bomb. We'd like you to know that the IRS empathizes with your loss. We can't agree with your valuation on the nuclear device, which we place at only $2.4 million. However the point is moot since we'll allow your full value for the yacht, and that with the bomb exceeds your illegal gains, and you can't deduct illegal losses in excess of illegal gains.

"Oh, and Mr. Blofeld... I've audited a lot of businesses like yours, and let me give you this advice: the next time you capture Mr. Bond, don't tell him your plans. Just kill him."

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