p.s. I had to laugh at how thorough Publication 525 is:

Stolen property. If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.

Apparently it can be easier to get someone on tax evasion charges than on criminal charges. I just recently (late February) had a long-distance purchase agreement that went south as soon as they received the funds. I finally threatened to report them to the IRS for potential non-reporting of the "stolen" funds. Got a phone call as soon as they got my certified letter containing a filled-out copy of the IRS reporting form.

Stinky way to have to do business, but it got the results I needed.

As another similar example, my brother, a cop, said that when they took down a methamphetamine lab they filed all the usual criminal charges and filed EPA (Environmental Protection Agency) charges. Easier to get them on something with the EPA.

Kathleen