Warning to escorts who accept credit cards and Paypal

[adannyboy]

Just to be clear, my understanding is that the IRS doesn't care how one makes his money, beyond categorizing it correctly as earned versus unearned income, claiming appropriate deductions (or rather, not claiming disallowed deductions) and the like. Whether you make it selling widgets or your ass isn't really their concern, beyond the nuance that selling a physical product has different tax implications than selling a pure service.

 

Kevin Slater

 

Truth. I put "escort" into the turbotax software out of curiosity and and it spit out a job code of "all other personal services".

 

PAY YO TAXES.

[davidsp]

This is such an important subject matter!!! I date a gentleman who actually teaches and instructs escorts (male & female) on how to report and handle their cash to satisfy IRS requirements. He has fascinating stories!! He works at a law firm. Unfortunately, this always occurs AFTER the escort was arrested on some petty issue. The big problem is always the tax evasion.

 

I always file and pay taxes. It's the right thing to do (makes me feel good and gowd knows I LOVE feelin' good) and enables me to qualify for auto loans, home loans, credit cards, etc. Yay for "all other personal services" and TurboTax!

 

Nate - LA

[whipped guy]

This is such an important subject matter!!! I date a gentleman who actually teaches and instructs escorts (male & female) on how to report and handle their cash to satisfy IRS requirements. He has fascinating stories!! He works at a law firm. Unfortunately, this always occurs AFTER the escort was arrested on some petty issue. The big problem is always the tax evasion.

 

I always file and pay taxes. It's the right thing to do (makes me feel good and gowd knows I LOVE feelin' good) and enables me to qualify for auto loans, home loans, credit cards, etc. Yay for "all other personal services" and TurboTax!

 

Nate - LA

Just checked out your Men4Rent ad... and it was honest and upfront! I think that you have a great perspective regarding paying taxes... It's strange as someone who is also self employed I really do enjoy and take pride in doing my own taxes... and being honest about it. As you say it makes one feel good and who doesn't like feeling good.

 

I once took a course on the subject for self employed individuals. The advice was to be totally honest with all of your income. If you want to get a bit creative do so with deductions... but be reasonable about it... If the IRS accepts the deduction then you filed your taxes correctly... and if you are reasonable they indeed accept most deductions. Now if you deduct a scuba diving trip that would be another story... But the rule of thumb is if you can give a reasonable argument for the deduction if it is questioned the IRS will most likely accept it... Interestingly, the lecturer noted that one if his clients did incredibly successfully deduct a scuba diving trip... He gave a reason... He was a surgeon who wanted to get a feeling regarding what it would be like to be under anesthesia... and diving underwater with a mask was the closest experience to replicate the activity... and the IRS agent bought it... Incredible!!! So I guess anything is possible!

[bigvalboy]

Well I'm impressed as well... and that's a great additude to have too boot. More should have such a mindset.

 

Also, regarding the eight year plan, I might be in need of a personal nurse by that point in time... However, in the meantime I may just have to check you out to make sure that you are capable of providing the required services.

 

Sorry, for continuing the detour from the main topic... but who would blame me...

 

Spot on WG.

 

Yes yes yes and yes....

Yes to his future plans

Yes to his great attitude

Yes to needing a nurse in 8 years or so...

AND....Yes to having a nurse and an tax advisor all in one package that looks like Killian.

[whipped guy]

Spot on WG.

 

Yes yes yes and yes....

Yes to his future plans

Yes to his great attitude

Yes to needing a nurse in 8 years or so...

AND....Yes to having a nurse and an tax advisor all in one package that looks like Killian.

Damn I'm doing my best to keep this thread on topic , but you are making it difficult...

 

Also, to clarify things, the phrase "needing a nurse" is code for... Shhhh.. and just between the two of us.... "Sugar Daddy"...

 

However, Killian seems like such a fine and dedicated young man that I would not deign to trivialize his academic pursuits with such a suggestion.

[+ dutchmuch]

Please take a look at this :

 

http://www.forbes.com/sites/robertwood/2015/04/10/10-notorious-tax-cheats-wesley-snipes-hired-tax-professionals-but-still-was-jailed/

 

 

Don't worry, the man with numerous private jets and Rolex watches will be there to bail out their favorite escort.

[whipped guy]

Don't worry, the man with numerous private jets and Rolex watches will be there to bail out their favorite escort.

Not to mention that many working guys are hired by some of the greatest legal minds in the country... some of whom post here from what I gather. Accordingly, they are assured of great legal representation after bail has been posted...

[jimboivyo]

Don't worry, the man with numerous private jets and Rolex watches will be there to bail out their favorite escort.

 

working class envy?

[+ dutchmuch]

Most of us Hoi Polloi can afford can afford to blow baby batter on the faces of the disgraced escort duo.

[Mocha]

I started a college tax course back in 2009, the book is still in mint condition because I dropped the class. It was too much like math, and nonsense...which I'm not keen on. And after awhile, I decided accounting and tax preparation wasn't for me...even though I interned at those kinds of places. But I took it long enough to get a jist and understand the technicalities of it.

 

I will say, there's ways around it. Think about it, does an escort charge tax? Is the rate $250 plus 7% sales tax? You're not collecting tax, so is it really owed? If it is owed, then clients should be charged sales tax. Otherwise you're going to be paying tax out of your own money. And like someone said, is it business or gifts? What about the money paid to the advertising sites? Surely they pay taxes on the funds received. An escort is essentially paying to work. And of course the client's income is likely taxed. So, you have tax coming out of 3 entities from 1 transaction. How is that fair?

 

I recently had a brief tax scare myself. But it was more fraud based, not something on my behalf. Needless to say, I straightened it out fairly quickly and had them off my back with no money owed. I had proof, they didn't.

 

That said, PayPal is okay...but I wouldn't do credit cards beyond that. So many things can go wrong. There's a reason why legal marijuana dispensaries won't accept credit cards, nor do they use banks. It has nothing to do with tax reasons.

[Scorpio]

I started a college tax course back in 2009, the book is still in mint condition because I dropped the class. It was too much like math, and nonsense...which I'm not keen on. And after awhile, I decided accounting and tax preparation wasn't for me...even though I interned at those kinds of places. But I took it long enough to get a jist and understand the technicalities of it.

 

I will say, there's ways around it. Think about it, does an escort charge tax? Is the rate $250 plus 7% sales tax? You're not collecting tax, so is it really owed? If it is owed, then clients should be charged sales tax. Otherwise you're going to be paying tax out of your own money. And like someone said, is it business or gifts? What about the money paid to the advertising sites? Surely they pay taxes on the funds received. An escort is essentially paying to work. And of course the client's income is likely taxed. So, you have tax coming out of 3 entities from 1 transaction. How is that fair?

 

I recently had a brief tax scare myself. But it was more fraud based, not something on my behalf. Needless to say, I straightened it out fairly quickly and had them off my back with no money owed. I had proof, they didn't.

 

That said, PayPal is okay...but I wouldn't do credit cards beyond that. So many things can go wrong. There's a reason why legal marijuana dispensaries won't accept credit cards, nor do they use banks. It has nothing to do with tax reasons.

 

You really should not have dropped that class. Then you would at least know that you have no idea what you're talking about.

 

Income tax and sales tax are two separate, unrelated issues. Everyone that pays income tax, pays income tax out of their own money. Whether it's the minimum wage worker at McDonald's or A Wall Street lawyer. Just because your business or profession is in the cash economy does not releave you of the responsibility to pay income taxes on your earnings.

[+ honcho]

In California, the sales tax laws are a bit arcane and definitely complicated.

 

Generally speaking, services are not subject to sales tax, but tangible goods are.

 

If I have yearly maintenance done on my oboe, the repair guys will charge me

something like $30 for replacement pads and $300 for labor. Only the $30

is subject to sales tax.

 

But it can get complicated.

 

If I go into a store and buy a CD for $15, I pay sales tax on it.

 

If I record somebody's concert and prepare a CD, master of it for them

to use for further processing (mastering, duplication), then only the

cost of the recordable CD is subject to tax. However, if they intend

no further processing, the entire amount (including the labor of

recording and editing the concert) becomes taxable.

 

If I go to MacDonald's and eat a hamburger there, it is subject to sales tax.

If I go to Safeway and get a refrigerated, microwavable hamburger to take home, it is not.

 

One could imagine the implications of this back in the bad old (pre HIV) days for

ingestible body fluids, delivered on an in-call . . .

 

Oh, yeah, and then there is *use* tax. If I buy a new oboe I pay sales tax on it.

 

If I sell that oboe to a friend, *he* should pay use tax on the fair market value of

the instrument, *even though it has had sales tax paid on it once before*.

[LouieD]

You really should not have dropped that class. Then you would at least know that you have no idea what you're talking about.

 

Income tax and sales tax are two separate, unrelated issues. Everyone that pays income tax, pays income tax out of their own money. Whether it's the minimum wage worker at McDonald's or A Wall Street lawyer. Just because your business or profession is in the cash economy does not releave you of the responsibility to pay income taxes on your earnings.

Thank you for your excellent clarification, Scorpio; and, yes, he really should not have dropped that class! I shudder to think how many citizens might think that because they are in a cash business, they don't have to pay income tax, just like everyone else.

[bigvalboy]

Most of us Hoi Polloi can afford can afford to blow baby batter on the faces of the disgraced escort duo.

 

LOL....

[jimboivyo]

Most of us Hoi Polloi can afford can afford to blow baby batter on the faces of the disgraced escort duo.

 

can afford can afford?

[+ dutchmuch]

can afford can afford each one of that charming duo.

[Guest Starbuck]

You really should not have dropped that class. Then you would at least know that you have no idea what you're talking about.

 

Oh, now, Scorpio ... didn't you hear? ... it's all math and nonsense ... and there's ways around it! Yippee!

[Mocha]

Thank you for your excellent clarification, Scorpio; and, yes, he really should not have dropped that class! I shudder to think how many citizens might think that because they are in a cash business, they don't have to pay income tax, just like everyone else.

 

If it's a sale, it should have sales tax. However, I was speaking all hypothetically and relatively. But I think honcho clarified that a bit.

 

That said, I'm not saying don't pay income tax. Don't twist words around. On top of that, whether I should have, or shouldn't have completed a class is not your prerogative, if it is...give me $400 not including out of state tuition (the book itself sits in my cabinet still today, was around $150-200) to retake it and I'll gladly. Then fly me to Miami because that's where my Alma Mater will be. But since you and so and so won't pony up the money, and like Dr. Phil likes to say it: sit your ass down. And no, Im not asking for it either because that class was an elective and something I wanted to take during the summer at one point, but had no relation to my major. I wanted it to be something I could go by, but the class got to be so in depth by mid-term, and I just wasn't interested in becoming a tax preparer. A relative already knows how to do all that stuff anyway.

 

And book smarts isn't enough if you don't have common sense and street smarts. I have a friend who didn't finish college, but he's been working under the table for years...and never got a tax bill. So surely someone making 60,000 probably has Some book smarts under their belt.

[MiamiLooker]

Criminal penalties are possible in cases such as these, but I've never seen it happen in my practice.

 

http://www.irs.gov/uac/Related-Statutes-and-Penalties---General-Fraud

 

 

I asked a friend of mine who’d had a similar problem. He was investigated for a range of years where income was not reported. The amount was a lot more than $60,000, however, most of the money was not a direct benefit to him. The money went into his business bank account but then immediately went to pay his various legal expenses (attorney fees, bonds, etc). Because most of his issues were in foreign countries, this was the most expeditious way to get the money where it needed to go. I believe the US authorities main concern was whether or not the money was being laundered. My friend was able to account for about 85% of the money, where it came from and where it went. He was given an option of paying ~$1,800 (I believe it was considered a fine, not repayment of tax) or about 20 days in “the pen”.

[+ tristanbaldwin]

I'm glad I keep my money in a coffee can. I upgraded from steel Folgers can to a plastic one in 2014...so happy I did!

[TruHart1]

I'm glad I keep my money in a coffee can. I upgraded from steel Folgers can to a plastic one in 2014...so happy I did!

 

There's that wonderful sense of humor Mr. B. has. That's just one of his many fine qualities! If I remember correctly though, he actually keeps his money between his mattress and box springs! :p:p

 

TruHart1

[Frequentflier]

And book smarts isn't enough if you don't have common sense and street smarts. I have a friend who didn't finish college, but he's been working under the table for years...and never got a tax bill. So surely someone making 60,000 probably has Some book smarts under their belt.

 

I hope your friend is caught, has to pay 100% of back taxes/penalties/interest and goes to prison for tax evasion. I have zero respect for people who evade like he/she does. To cap it off, I hope its his/her best friend that turns them in.

[AdamSmith]

To cap it off, I hope its his/her best friend that turns them in.

 

An accountant friend says it's not just an urban legend that reporting a tax evader is very likely to also bring an audit on yourself.

[Frequentflier]

An accountant friend says it's not just an urban legend that reporting a tax evader is very likely to also bring an audit on yourself.

 

That's funny. Did that accountant tell you that right after confessing to evading taxes?

[Frequentflier]

Share this couples views about the United States with your tax evading friends

 

http://www.seattletimes.com/seattle-news/couple-bequeaths-it-all-847215-to-uncle-sam/