Legitimate Question

[Kevin Slater]

You really should report it and pay taxes, because then you are building Social Security credits, which isn't just for old age, but also provides disability insurance. How many times have we seen Gofundmes for escorts/bodybuilders who got sick or injured and had zero coverage because they never reported anything?

 

I agree with your conclusion, but not your argument. I suspect I would have a very hard time collecting a dime from Social Security were I to become disabled.

 

Kevin Slater

[+ sniper]

SS disability means unable to perform ANY work, so it wouldn't be tied to your specific occupation so I think you are mistaken - though I suppose a nosy investigator could make the claim filing a hassle(which is the norm anyway - my sister with crippling MS needed to hire a lawyer after they initially turned her down, but the lawyer got it backdated. This happens all the time because the caseworkers follow a "deny and make them appeal" practice).

There are plenty of things an escort could say their job was regardless - "dating coach," "travel guide" etc. that are close enough to what they do and are perfectly legal.

[BigK]

If he's coming to see you and he's a regular why don't you just have him bring cash? You really should be reporting at least some of your income. Set up a checking account for your "Personal Training" business. You can just use your name or set up a dba (doing business as). Deposit enough to cover your rent and then some. If you set it up as a business you can deduct some of your rent (assuming you host sometimes this is totally legitimate) and any other reasonable expenses to facilitate the conducting of your business. Report at least some profit. If you deposit receipts into your checking account and pay only business related expenses out of that account accounting will be a breeze. Just spend an hour or 2 at the end of the year with your checkbook and fill out an incredibly simple Schedule C. If you keep your profit under a certain amount you will pay no income taxes and only have to pay self employment tax which will make you a legitimate worker and begin contributing to your Social Security. Keep all personal expenses you don't want to report in cash.

 

Side note to Kevin Slater...With your demonstrated business acumen I'm very surprised you're not doing this already. Paying some taxes should really be considered a cost of doing business...and I'm no big fan of the IRS.

[Kevin Slater]

If you set it up as a business you can deduct some of your rent (assuming you host sometimes this is totally legitimate)

 

Unfortunately, if you're thinking the home office deduction, the allotted space must be exclusively used for business. If you had a spare bedroom or basement dungeon used solely for escorting that would qualify, but most escort situations of seeing the client in a room in which you also sleep would not.

 

Side note to Kevin Slater...With your demonstrated business acumen I'm very surprised you're not doing this already. Paying some taxes should really be considered a cost of doing business...and I'm no big fan of the IRS.

 

What gave you the impression that I'm not?

 

Kevin Slater

[Kevin Slater]

SS disability means unable to perform ANY work, so it wouldn't be tied to your specific occupation so I think you are mistaken - though I suppose a nosy investigator could make the claim filing a hassle(which is the norm anyway - my sister with crippling MS needed to hire a lawyer after they initially turned her down, but the lawyer got it backdated. This happens all the time because the caseworkers follow a "deny and make them appeal" practice).

There are plenty of things an escort could say their job was regardless - "dating coach," "travel guide" etc. that are close enough to what they do and are perfectly legal.

 

We're out of my league here, but one requirement of SS disability benefits is that you cannot do work that you did before. That suggests to me an examination of your former employment and likely a doctor's involvement. I assume filing as an escort would eventually get dismissed, and anything else suggests to me the words insurance fraud. I think you're right that a nosy investigator could make this a very awkward and perhaps fruitless pursuit.

 

You may be right, and perhaps some escort has availed her/himself of SS disability. As far as paying taxes goes, I'm more swayed by other more compelling reasons for doing so.

 

Kevin Slater

[+ sniper]

There are "escort services" that advertise in the phone book, so strictly speaking "escorting" isn't illegal. I'd think a decent lawyer could get you through that issue. But I am not a lawyer nor am I a disability specialist, I just worked in insurance for years and have family on disability.

At any rate there are a host of reasons for the OP to file income, including the ability to avail oneself of self-funded pension plans and defer taxes on a substantial portion of income and investment earnings.

[Kevin Slater]

At any rate there are a host of reasons for the OP to file income, including the ability to avail oneself of self-funded pension plans and defer taxes on a substantial portion of income and investment earnings.

 

+1

 

Kevin Slater

[down_to_business]

Of course reporting everything is best. It will allow you to sleep at night, without worry. At the very minimum, however, I would at least show reportable income equal to the western union transfer totals... just in case. Especially if you had to provide official identification to collect and/or the transfers are traceable to you.

[+ Phactor]

A SAR-MSB must be filed for suspicious transactions of at least $2,000 in funds or other assets conducted or attempted by, at, or through the money services business (31 CFR 103.20(a)(2)).

 

Wonder how suspicious is defined. Let's not forget Denny Hastert investigation started with these regs.

[LivingnLA]

There are "escort services" that advertise in the phone book, so strictly speaking "escorting" isn't illegal. I'd think a decent lawyer could get you through that issue. But I am not a lawyer nor am I a disability specialist, I just worked in insurance for years and have family on disability.

At any rate there are a host of reasons for the OP to file income, including the ability to avail oneself of self-funded pension plans and defer taxes on a substantial portion of income and investment earnings.

 

Point of clarification, those services tend to be for "companionship." That can be anything from massage, talk, dating advice, etc. etc. etc. Something like a personal coaching service would seem like a decent fit for an escort if it's structured around massage, physical training, or relationship coaching type services. Massage is the only one of those that often requires licensing in most parts of the country, though there are exceptions. Think about something legitimate that makes sense for you and your hobbies, and structure a self-employed scenario that "passes the sniff test" so you can legally report income and pay taxes, which you REALLY should do if you have any significant income at all.

 

NOTE: None of this is legal advice. I'm purely speculating based on a fun conversation.

 

Wonder how suspicious is defined. Let's not forget Denny Hastert investigation started with these regs.

 

Read 31 CFR 103.20 at https://www.law.cornell.edu/cfr/text/31/103.20 to learn the details. But, here are the directly relevant paragraphs to your question:

 

(2) A transaction requires reporting under the terms of this section if it is conducted or attempted by, at, or through a money services business, involves or aggregates funds or other assets of at least $2,000 (except as provided in paragraph (a)(3) of this section), and the money services business knows, suspects, or has reason to suspect that the transaction (or a pattern of transactions of which the transaction is a part):

and

 

(4) The obligation to identify and properly and timely to report a suspicious transaction rests with each money services business involved in the transaction, provided that no more than one report is required to be filed by the money services businesses involved in a particular transaction (so long as the report filed contains all relevant facts). Whether, in addition to any liability on its own for failure to report, a money services business that issues the instrument or provides the funds transfer service involved in the transaction may be liable for the failure of another money services business involved in the transaction to report that transaction depends upon the nature of the contractual or other relationship between the businesses, and the legal effect of the facts and circumstances of the relationship and transaction involved, under general principles of the law of agency.

The lay answer: Suspicious is publicly the responsibility of the organization handling the transaction. In this case, Western Union. Given how lax they generally are in many of their business practices, I imagine so long as it isn't blatently obvious that they are being used to facilitate illegal activity, they won't care and won't file a SAR-MSB. Note that my suggestive speculation above would be a perfect way to handle this because if you had a legitimate coaching business or whatever, that could readily justify the transactions and ally suspicions.

 

Hastert was indeed investigated under these laws but he violated 31 CFR 103.20(2) and specifically subparagraph (ii) because he tried to structure his payments to avoid the reporting requirements and his bank filed a SAR-MSB and it all fell apart for him. Here's subparagraph (ii):

 

(ii) Is designed, whether through structuring or other means, to evade any requirements of this part or of any other regulations promulgated under the Bank Secrecy Act, Public Law 91-508, as amended, codified at

12 U.S.C. 1829b

,

12

U.S.C. 1951-1959, and

31 U.S.C. 5311-533

0; or

[RM]

Agreed, there's no tax problem unless you are planning on not paying tax on your income. Be sure to keep records of your business expenses. Deductions aren't allowed if you throw away the records.

[gezellig4u]

.

[+ jc808]

In terms of the service provided companionship seems like a good fit. There are actually companions who get paid for exactly that. Long ago, when my grandmother was in her 70s she worked a few days a week for a well-heeled elderly lady in her 80s as exactly that, a companion. My grandmother would spend part of the day keeping her employer/client company, made her lunch, talked about whatever elderly ladies talk about (like why her grandson wasn't married yet, for instance), watched soaps, & etc. All perfectly legit, and reportable income. My grandmother loved it.

[Frequentflier]

If he's coming to see you and he's a regular why don't you just have him bring cash? You really should be reporting at least some of your income. Set up a checking account for your "Personal Training" business. You can just use your name or set up a dba (doing business as). Deposit enough to cover your rent and then some. If you set it up as a business you can deduct some of your rent (assuming you host sometimes this is totally legitimate) and any other reasonable expenses to facilitate the conducting of your business. Report at least some profit. If you deposit receipts into your checking account and pay only business related expenses out of that account accounting will be a breeze. Just spend an hour or 2 at the end of the year with your checkbook and fill out an incredibly simple Schedule C. If you keep your profit under a certain amount you will pay no income taxes and only have to pay self employment tax which will make you a legitimate worker and begin contributing to your Social Security. Keep all personal expenses you don't want to report in cash.

 

Side note to Kevin Slater...With your demonstrated business acumen I'm very surprised you're not doing this already. Paying some taxes should really be considered a cost of doing business...and I'm no big fan of the IRS.

 

Don't follow this advice which is to commit one or more Federal felonies. Reporting "some" of your income and "some" profit still means you're guilty and you haven't avoided what you're trying to - penalties/interest/possibly prison/toxic background checks. The better advice you've read is to report the income you've received and pay income, social security and Medicare (you will want social security and Medicare when you're old) taxes. You'll be an honest and reputable citizen plus you won't have to worry that the 6 am knock on your door is an arrest for tax evasion and/or lying to Federal agents.