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I always wondered how you do paperwork for something like this. It must be a nightmare from an accountant perspective. What is the bill code for "blackmail" when you file the income tax and you write a 6 figure expense. In the end your cash has to balance out, you cannot not declare it. Anybody with experience in something like this?


At least for the IRS, you can deduct money paid out for ransom, blackmail, or other forms of theft.

http://www.irs.gov/publications/p17/ch25.html#en_US_2011_pub...


isn't there something fringe like 'theft' or miscellaneous losses?


Having a code for theft is definitely a thing. For many businesses, having a small amount of theft is just an unavoidable cost of doing business.




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