Any CPAs out there....?

[Guest leandream1]

Presuming an escort has taken care of the necessities that go with the business-classifieds, phone, apartment, car-and is on top of the essentials-health insurance, utilities, regular payments to school loans-does anyone out there have any suggestions of how they (ok we) can successfully and safely manage our cash-business beyond the methods I list below? Any help would be most appreciated.

 

1. overpay credit cards such that you will always have plastic money, but no debt. but of course dont SEVERLY overpay them.

 

2. if you have a taxable, and legal, day job, give a reasonable amount of money to a good broker, 5-15K+/year (depending on what you make at the day job). if questioned you can say that you saved it from your pay checks, and most likely much or some of it did come from your legit job. the burden of proof will be on you of course, so be careful.

 

3. get some sort of job that can legitimize you, even if it's just part time, or write a book or magazine articles, like aaron, or become a belly dancer, or teach piano lessons or...just do something that you can point to and say "this is where i make my income" in case anyone asks.

 

4. what did i forget...?

 

again, this is sounding very paranoid. chances are that nobody is going to hassle you. with some easy precautions you can cover your ass if they do AND it's better to use escorting money wisely than to piss it away.

[Guest RO]

Shouldn't this thread have been started in "The Lounge"? I hardly think the section devoted to escort chatter is the appropriate place to discuss an escort's tax evasion problems. The rest of us frequently pay HIGH fees for advice from tax lawyers, etc ...

 

Typical escort ... let's discuss everything EXCEPT getting down to business ...

[SoCal]

Rod,

 

Just be careful of what the IRS calls a "lifestyle" audit. If they audit all your credit card statements, laundry bill, and whatever else you may be paying cash for, they'll compare that to your reported income from the day job, and start asking you how and why you're living so well. This audits can be very drawn out and painful...but I also understand that the IRS is doing fewer of them nowadays. You probably don't have too many flags to set off one of these.

[Guest leandream1]

LAST EDITED ON Feb-09-00 AT 01:08PM (CST)[p]P

[Guest leandream1]

LAST EDITED ON Feb-09-00 AT 01:47PM (CST)[p]Thanks for the advice socal. i totally agree. 3 rolex watches (or in my case 3 monthly ski trips to Banff) on your fully paid visa would be hard to explain to the IRS as falling out of your real career if that job is an $8/hour starbucks barrista position :-) one thing that may offset suspiscion would be to spread the spending and investments out over longer time periods. agree?

anyone else have any thoughts? other escorts, how do you handle your wad--of cash?

 

Since RO didn't figure it out, i need to stress that this subject header "Any CPAs out there" is simply a catchy intro into a general, and RELEVANT and most importantly fun, string. it is not an attempt to cojule free information from highly educated professionals; unless the want to. If none of the respondees are CPAs, no problem.

 

following ROs logic if a client or escort posts a pertinent (and mine is a pertinent post) health question, nobody with a background in medicine should respond if they feel so inclined because normally they are paid to counsel?! that doesnt sound very rational. if within a posts someone references that they arent up on the latest Gay Gene XQ28 Studies, and are curious to learn more and does anyone here know anything, being an engineer should i respond "I get paid to answer science questions and I am not about to do it here for free. and i resent your query, I resent it so much that I am taking time out of my day to type a response to let you know how innapropriate it is to ask such questions here!"? RO is either too touchy, too literal, or hasn't had his morning coffee. RO, pick up the phone and I would be happy to 'get down to business (sex)':9

"typical escort"? yeah, right.

[Boston Guy]

LAST EDITED ON Feb-09-00 AT 02:59PM (CST)[p]Hi RO:

 

You stated:

 

"Shouldn't this thread have been started in "The Lounge"? I hardly think the section devoted to escort chatter is the appropriate place to discuss an escort's tax evasion problems. The rest of us frequently pay HIGH fees for advice from tax lawyers, etc ... "

 

The posted decription for "The Lounge" says:

 

"Topics of general interest or discussion about things that are on your mind."

 

while the descripton of "The Deli" is:

 

"Escort chatter."

 

Now, I don't know how you define "Escort chatter," but it would seem to me to include any and all topics related to escorting -- from both the client and the escort point-of-view. In fact, threads such as this really don't seem to fall into the description of the Lounge in any particular way at all except, I guess, as any thread on any subject might.

 

But your comments lead me to wonder if you are viewing the Board -- or at least this forum -- as limited specifically to escort reviews and questions about the escorts from clients. That isn't how I've seen it and I hope it's not how others see it as well: a constant stream of uninterrupted "do you know this escort, what does he do" questions gets to be very boring after a while.

 

I've found the various comments from the escorts to be fascinating -- it's a side of the business I've often wondered about but know virtually nothing about. And not only do I find these subjects interesting, I think they help me to be a better, more educated client -- and that helps me have more fun when I do hire an escort.

 

I write this, too, as someone who has had a thread moved on him (the "Open Letter to Hed" was moved to the Lounge by HooBoy and then subsequently lost when the Lounge itself was lost). When I wrote that note, I put it in this forum specifically, because it had to do with Hed's comments about Billy and other escorts and because it also was about escorting and clients and interaction here and elsewhere. So I thought this forum was appropriate.

 

Evidently, others did not and HooBoy was persuaded to move it. That's certainly his right and it was no great loss when the Open Letter was lost. In some ways, it might even be good under the concept of letting bygones be bygones.

 

But I was a little disappointed that the idea of moving threads from forum to forum had been raised because it's been my experience on Atkol that moving a thread from one forum to another generally kills it immediately.

 

And, really, if someone posts a thread in a forum that might reasonably be placed in another forum, who is it hurting? The forums are very easy to scan and no single thread takes up much space at all. So who is hurt if someone chooses to make their comment or post their question in that might not be where someone else would have posted it? I'd suggest that we all sit back and relax a little and concentrate perhaps on more important issues. In the overused saying "don't sweat the little things," this really IS a little thing.

 

Finally, you close by saying:

 

Typical escort ... let's discuss everything

EXCEPT getting down to business ...

 

Gosh, that hasn't been my experience. In fact, I've found that some escorts really want to talk only about business so they can move to the next client as quickly as possible. For me, I find I have a better time and like the person better when there is more communication between us. It can be on virtually any subject, but it comes under the heading of getting to know one another.

 

Perhaps my perspective is shaped by the fact that I try to hire a few regular escorts in the various locations I travel to and, when seeking a new escort, I try to find someone I'll enjoy seeing many times. I know that's not everyone's perspective and other methods work well for other people; it's just what works for me.

[Guest brianrj]

LAST EDITED ON Feb-09-00 AT 03:52PM (CST)[p]Well put BostonGuy. I might just add that if the subject line is clear - which I thought it was here - anyone not interested in the accounting aspects of escorting could have skipped this thread. (Unless CPA was thought to stand for Certified Professional Asseater - which could have certainly led to misunderstandings!)

 

It also, at least at this point, isn't too tough to get through the postings quickly - assuming you are logging in and taking advantage of the "Mark" function. I kinda like having most of the posting s in one area - less hassle than moving between forums.

 

Just my 2 cents - as devalued as they are.

[Guest leandream1]

RO's reactionary responses are becoming old hat. thanks brian and boston guy, you make good points.

 

Bringing this 'round to the original message: Any other escorts want to share how they handle their cash? any one have any more advice?

[Guest javad]

Leandream -

 

I offer this advice with all good intention and I pray that you (or any other escort) do not get hurt feelings from my comments.

 

Having dated an ex-escort, I make this statement (the same I made to him): If your choice for this type of work is good to you and you have done what you need to do to come to terms with things associated with this type of work, then go ahead and be honest in all aspects of your life. I know there may be legal ramifications to your open honesty, but I am sure you already take specific precautions to protect yourself from the sometimes intrusive long arm of the law.

 

It is also best that you report all your income and here are a couple of reasons: 1. You receive greater retirement benefits for it later and 2. It is the right thing to do.

 

Although I am only a bookkeeper and not a CPA, I would still imagine that it would be acceptable for you to create your own 1099 form to report this income. I could be wrong on that so please check it out. You would take a big bite at the end of the year taxwise with the 1099, but if you allow your expenses beforehand it should not be that bad....

 

You should keep in mind that a majority of your clients must report all or a majority of their income and I think it is fair for you to play by the same rules. (This of course does not implicate escorts alone. It really points a finger at all "under-the-table" workers.)

 

Please take what I said as a friendly suggestion and not meant to cause anger or embarrassment.

 

Thanks!

J

[Guest leandream1]

Thanks J.

For me it's not about tax evasion, but about avoiding that "long arm of the law". However, I know not to expect the cops to knock on my door simply because I declared that my 2nd form of reported income comes from "escorting", which by itself is not illegal. Thanks J, food for thought.

[Guest DickHo]

LAST EDITED ON Feb-09-00 AT 06:54PM (CST)[p]How about a Schedule C for Consulting Services? You could show your income and you can make lots of deductions and show a paper loss. The IRS can get you for not reporting income. They can't get you for taking too many deductions.

[RM]

Of course Schedule C is the proper way to report your income, with all related deductions.

 

That's hogwash that the IRS can't get you for reporting too many deductions. If you have too many deductions, you are likely to be audited. My Schedule C was audited because some of my expenses were large, but legitimate and documented.

 

If your deductions are disallowed in audit (and they will be if you have no documentation) there will be all kinds of penalties attached to any tax increase. The auditor will print you a proposed tax increase on the spot (with proposed penalties) if he doesn't like your documentation and asks you to send in more.

 

All deductions on your tax return should be backed with records, receipts, cancelled checks, etc.

 

The CPAs aren't replying to this thread because it is against their ethics to counsel people on how to NOT report income.

 

The IRS is very unlikely to audit someone because they are living a life style that is way beyond their supposed income. How would they know? Only if someone told. If IRS does an audit on that basis, they can get all your bank records from your bank, check any property that you may have purchased, and make the assumption (and a tax assessment) that any spending that you did was based on taxable income that you received from some source.

 

Note: informants may get 10% of any additional tax that is actually collected, but they are not given any information on the results of their information (unless they get a reward).

 

 

So don't get anyone so pissed that they'd report you.

[Guest youngblood]

I feel that I am in good company with you leandream, since in the past RO has criticized my writings as well. People's own lives are often their worst punishment.

[Guest Monopolizer]

Rod,

 

With a lot of spare cash, I would report income on Schedule C and contribute to Keogh Profit Sharing and Money Purchase retirement plans, which allow you to contribute and deduct up to 30k per year. Maximize your retirement contributions and invest aggressively. And if your rolling in a ton of cash, check with a cpa for setting up defined benefit retirement programs where you can contribute a lot more than 30k.

[Guest DickHo]

I meant to say, the IRS can put in jail for income evasion. They can't jail you for taking too many deductions.

[Guest Reed Parker]

I'm proud to say that I report all of my income. It is the responsible and ethical thing to do. Besides, the IRS doesn't care how you've made your income. They DO care that you pay your share of taxes. The tax code includes rules for income obtained illegally. I call myself an "entertainer" which is a good title because it encompasses escorting, porn work, performances at the Nob Hill, etc.

 

If you keep good records, there's no reason why you can't take LOTS of deductions, as long as they are related to your business. I paid estimated taxes for '99, and I'm expecting a refund of about $800 on my federal return.

 

Pay your taxes, Rod! Look at it this way: you've got a job you love, you're in control of your time, and you're making very good money. Think of all of the people who don't have those perks, and whose taxes are automatically deducted from their paychecks. You've got it made, man!

 

Oh! And I just thought of another thing. If you want to buy a house, lease a car, rent an apartment, etc....there's a good chance you'll need to prove your income. I probably wouldn't be driving a new car if I hadn't been able to prove what I make.

[RM]

I'm proud of you!

[Guest JayMI]

Reed Parker,

 

You've got class! You are doing the right thing. I suspect you must be a terrific escort because you are such an ethical person.

[Guest Blade of Houston]

First off, I wish I had had my head together last Wednesday. I had just finished reading the relevant parts of leandream's book the night before but I was busy in my mind building my costume for my Krewe's Mardi Gras Ball (which makes money for charity, of course), and I said yes to someone with danger flags all over him. Now I am forcibly retired.

I wish that I had been reporting all of my income to the IRS for the reasons others have already given you. I am in the process of going up on what I report to them around 10% every year until I get up to where I actually make. Trying to do it gradually so as not to raise suspicions. Is that wise or should I just jump it up suddenly? This still applies to me what with my regular massage career, unless this court case takes that away from me.

Two more ideas as to schedule c projects you could bury your money in.:

Do you have an AKC registered male dog? Or would you like having one? Their stud fees are legal whereas ours are not.

I used to know an escort who made t-shirts and insisted on giving one to each of his clients. And I have seen Donnie Russo's website offering canvases which he evidently made by covering his bod with paint and rolling around on them. "Create and sell high art."

[Guest JayMI]

Dear Blade,

 

When you say "forcibly retired," I assume you mean you were busted. You have my sympathy. Good luck. I hope the experience turns out not to be quite as horrible as it sounds. Despite the stupid laws and unfair enforcement, keep in mind that providing a stud service is nothing to be ashamed of. You will be in our thoughts.

[Guest Gerald]

I'm a CPA and Tax Specialist: I know the tax code very well. Reed Parker is absolutely correct. I prepare taxes for many escorts and as long as a Schedule C Sole Proprietor business makes a profit 2 out of any consecutive 5 years, Rule 2513 prohibits IRS from questioning any business deductions. But if you don't deduct office-at-home, cell phone, trans, advertising, computer etc, you are paying too much. I humbly suggest that this is a pretty good country and around 10% of your gross is a fair amount to pay. IRS doesn't care how you make your money. Escorting, particularly non-street guys is not a law-enforcement priority in the sense of drug dealers. File a return, keep records, and pay a modest fair tax, don't make-up stuff (like a car) out of whole cloth: Use Turbo Tax and buy audit insurance for $25. If you end up owing a large amount of tax, email me cause you've missed something. Advice is free of charge.

[Guest Jerry]

Blade, can you start a new thread and elaborate on your experience for us in as much detail as possible? I think everyone who follows these discussions would be interested in hearing those details. Don't post any admissions of guilt. Just post the facts that you and your lawyer do not intend to dispute in any criminal proceeding. You might want to ask your lawyer before posting, or you might want to wait until the criminal proceeding is over.

 

How serious is the possible punishment for prostitution in your state (Texas, I presume)? In some states, same-gender prostitution is a felony punishable by up to 10 years imprisonment and public registration as a sex offender (applicable to escort or client), but I doubt that actual prison sentences, if any, for a first offense are so lengthy. How common is it for escorts to be arrested in your state?

[RM]

What do you mean by 'prohibits IRS from questioning any business deduction?'

 

I thought all items deducted must be for a legitimate business purpose, and must be expenses that were actually and verifiably incurred. Of course, few items of deductions are ever questioned.

[Guest REGINA]

GERALD-you've made some excellent points! I think your letter is exactly what this website is for: offering information useful to everyone invovled.

 

Since I hate doing taxes, keeping receipts for this magazine and that audition I just lose my mind and don't file. This is the first time I've read this thread. Reading no-nonsense, grounded information like yours, Gerald, is very helpful. It's too bad that RO doesn't understand this.

 

And I've just read about Blade of Houston. Are you OK? Having been through the fires of law enforcement, what are your thoughts on this website. Is it dangerous to the safety of escorts?

 

Rod, hope all your taxes have worked out!

[Bilbo]

Dearest Regina,

I don't think just anyone will be looking at this old thread much anymore, so I feel I can safely let you know that this is my new name on this forum.

I always enjoy your postings and would love to know more about you. If you ever want to e-mail me direct, my address is

BillMORK@aol.com

Life is a series of calculated risks. The only reason that I think this site might at all be involved in my arrest is that the complainant, whoever he/she was, mentioned the internet in the complaint. And this was my only net presence. The arresting officer only mentioned a local newspaper. So, there is a chance that this site played a part in the happening, but it doesn't upset me. Except to worry, and that worry is over, that HooBoy might be in danger of looking like an escort agency to some stupid redneck bluenose, even though he disclaims it on the title page. Face it, any advertising venue which can find clients can also find reactionaries. I remember a case, indeed, where a nude beach near Galveston was almost closed from a complaint from a person who had only heard about it and had never been near the place to see it for him/her self! Everyone must choose his own acceptible level of risk or risk dying without having lived.

My case is still ongoing, so I don't feel like I can say very much about it. I will say that I am amazed at the fact that the police are allowed to lie at will, to perform the ungentlemanly act of prevarication to try to enforce morals. And since this was a misdemeanor, not a felony, there is no question of entrapment allowed. Nor, at this level, was it considered odd that I was never read my Miranda rights.

Anyway, I am now on to concentrating on my Reiki treatments professionally. And Lessez les Bon Temps Roulez in my presence here.

Love, the artist formerly known as Blade of Houston