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What luck! You found $1M in a suitcase while hiking in the wilderness. Because you are a law abiding citizen, you diligently report all your found money to the IRS. No one, including yourself, has any way to prove that you did or did not cause this money to be where it was or that you did or did not know it would be there.

Are you within the law?

Being more serious, is unexplained money in and of itself illegal if you report all your income to the IRS? If an explanation is required, are "I found it", "anonymous gift", or "I decline to explain" a sufficient explanation?

On face, it sounds draconian and absurd to outlaw finding money. On the other hand, it's likely that someone who regularly "finds" large amounts of money is an inept money launderer and engages in other illegal activities. It wouldn't be too surprising if simply having large amounts of unexplained money in and of itself was illegal.

Does the situation change if instead you find a bag of diamonds (or any other asset) while on your hike? What if this happens on a regular basis?

I'm interested in US law.

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    IANAL but possession of stolen property is a crime. You have to suspect it could be stolen. You need to deal with the stolen property part before the IRS. You need to deal with does the rightful owner have a claim before you deal with the IRS. Just finding something does not automatically make it your property. – paparazzo Aug 6 '15 at 18:30
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    You found something that does not belong to you. You must attempt to restore it to the owner, otherwise you fulfill the major condition of Theft §242 StGB: Whosoever takes chattels belonging to another away from another with the intention of unlawfully appropriating them for himself or a third person shall... – Mark Johnson Nov 19 at 14:28
  • hiking where? there is no unowned land. if you find thing which are valuable, but which occur naturally (uncut diamonds or a gold nugget), it maybe different wrt to the law and the land owner. it maybe extraction of resources from the land. technically, even every tree you find during your hike your hike had a hefty resale value. the land owner would not see it as you finding the tree if you pulled it out and tried to resell it. – grovkin Nov 19 at 17:43
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I am unfamiliar with specifically US laws on this but under common law (which US law is derived from) there is the crime of "Theft by Finding", however, because you turned it over to the authorities who, after the required time period were unable to find the rightful owner, the money becomes yours.

However, you still have to pay your taxes on it: http://www.foxbusiness.com/personal-finance/2014/07/03/found-money-is-awesomebut-must-pay-uncle-sam/

As far as I can see, income is income whether it comes as cash, diamonds or long lost antiques.

As far as the money laundering aspect, that is something the authorities would need to prove - as opposed to you just being lucky.

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    Relevant: civil asset forfeiture. The money may not become the property of the finder in all cases. – jimsug Aug 5 '15 at 1:40
  • @jimsug My understanding is that there needs to be some related crime (but not necessarily a conviction) for civil asset forfeiture to apply. – Praxeolitic Aug 5 '15 at 2:13
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    Just saying, but if it was an extremely high amount like the $1M mentioned in the question, chances are about 0.000001% you'd ever see that money again after turning it over. It would likely get labelled as "evidence" and get locked up in a FBI facility somewhere for the rest of eternity. Because let's face it, no one just leaves a suitcase with a million dollars worth of bills, diamonds, or whatever in it just laying around somewhere. If it were a more reasonable "found it" value like, say, $500, you'd probably end up with it afterwards. – animuson Aug 5 '15 at 5:23
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    This real life event seems highly relevant jcameronlaw.com/… – DJohnM Aug 5 '15 at 5:29
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    @animuson get a receipt! – Dale M Aug 5 '15 at 5:48
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Answering under Czech Republic jurisdiction (not the United States):

No, you are not permitted to retain the money even if you pay taxes of it. The crime you commit is called Concealement (as in "you keep for yourself things that you found are not yours") and, if you keep an amount as high as $1M, the penalty is 2 to 8 years in prison, the prison sentence being mandatory.

Around here, keeping money you found starts being a crime at the value of $200.

To prevent being sentenced, you must find the owner and return the money to him, or, failing that, hand it over to the police who will attempt to locate the rightful owner, and, if it fails, the money will end up in the local safe, where it must be kept for about 10 years, I think, in case somebody comes back for it.

You do have a right to get some of the money (a finder's fee) that is 10% of the found amount.

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Short answer: No.

Long answer: Well, no, but the size of your find is going to cause some legal concerns.

As a rule, any currency is technically a bearer bond, which means it belongs to the person who is holding the physical issue of currency at the moment of transaction, so if you find an amount of cash just lying around on the ground, and pick it up, you are legally the owner. This is why cash is preferred medium of exchange for your bad guys and there is a rumor that all U.S. currency will test positive when looking for a trace amount of a drug on the bill. Cash is difficult to trace by ordinary means.

Large sums may require you to report the find to police who have a window of time (usually a 30 day) window for someone to claim it. Like many legal elements in the U.S. this is based on your jurisdiction as to if there is a statutory period, or if merely showing an attempt to find the legal owner will count as protection against later charges of theft. Either way, once that matter of seeking but not finding the return is shown, it's legally not theft and legally yours. But we must discuss the elephant in the room here, namely, losing a million dollars in cash is actually pretty difficult.

First, despite what movies would have you believe, depending on the denomination of the bills found, a million dollars can weigh as little as 22 lbs (all $100 notes) to 1.1 tons (all $1 notes) and $1 million in the most commonly circulated note in USD ($20) is 110 lbs. Suffice to say, this is a significant and noticeable weight to just drop out of your pocket, but this is just the improbable situation, not anything problomatic.

What's more important is that per US law, banks must record all exchanges of currency to the value of $10,000 or more in a single transaction to federal law enforcement agencies with jurisdiction over money crimes (and don't get clever and move $9,999.99. Banks tend to catch on to these transactions and report them too, just to be safe). It actually takes a while as your standard bank may not even have that much physical cash on hand to minimize the loss from robberies. And often banks will note the serial numbers of some bills in the stacks, just in case that cash winds up in law enforcement hands... There's a very good way to at least track down the rich idiot who can lose $1 million in pocket change. If the money is aggregate, chances are it's related to several criminal transactions and might be siezed as evidence of a crime (and likely would be returned to circulation.

As for the IRS, while I don't know the specific box on the form to tick for found money of significant size, I do know there is a specifc box to check for money earned from criminal enterprise. Contrary to the popular assumption, Al Capone wasn't arrested for tax evasion because he wasn't paying his taxes, but because he was. He however was only reporting his legitimate earnings as taxible income, but clearly was living well above his means based on his reported income. And he wasn't shy about flashing his unreported wealth.

Heck, if you want to really screw the system, check your unlawful income and then claim a Ski-Mask and new super fast sports car as non-taxable business expenses (since they would have contributed to your illegal bank robbery which you no own taxes on). Suffice to say, the government doesn't much care how you got your money so long as it gets it's cut of the take. They'll have a box for ticking for found money.

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