You are correct that tax evasion is more serious an issue than a 1st offense for prostitution. It is doubtful LE would ever care or think about reporting you to the IRS because LE would not know whether you delared such income or not and you don't have to tell them either. LE has thus neither grounds nor jurisdiction. Frankly, my dear, they don't give a damn. And, if you simply declared the income to the IRS and your state, neither would they care. How to describe it? Well, the NV whore house 1099s list the pros as entertainers as I recall. Go thou and do likewise.
Many providers have the problem of living better than their declared income. If they are ever audited - a very unlikely but possible event - they have no way other than to dig deeper holes by saying my boyfriend(s) pay/paid for all this. Then,, of course, you can't produce the boyfriend. Some listen to good advice; most don't. But it is true that not declaring income is a deadly serious issue with the tax people. One can be aggressive as to deductions and pay a cash penalty if audited. Failure to report is federal penitentiary time.
I started as a provider almost a year ago and have a question about how to taxes without admitting to illegal activity. I have a day job and my provider income could probably be hidden but my worry is that I'd get arrested for prostitution, a misdemeanor, but then face much more serious charges, tax evasion, if le reported me to the IRS. Is that something to worry about? Any advice?
Make sure to stash the cash generated from providing. If you put it in the bank, you can get caught by the IRS very easily. If you are audited, the IRS has a very basic approach. What was your balance in the beginning of the year, plus: how much did you make(net), less: your justifyable expenses for the year. If your balance in the bank is higher than what they calculate, you have some explaining to do.
Use cash to pay for everything you can (groceries, TV's, trips....) and pay for big ticket items without using cash.
If you have a mortgage, take cash and get a cashier's check to pay down your mortgage. If you have a car payment, every now and then get a cashier's check to make the payment (don't make every payment that way though).
I would consider getting a safe deposit box and stuffing away the cash. When you stop providing, you can use that cash for future expenses. The key is, don't try and use all the cash at one time. Be patient.
If you get arrested for some reason, the IRS can't do anything to you if they can find where you used to cash or where you keep it. Most likely if you are caught you will pay penalties and interest.
You are correct that tax evasion is more serious an issue than a 1st offense for prostitution. It is doubtful LE would ever care or think about reporting you to the IRS because LE would not know whether you delared such income or not and you don't have to tell them either. LE has thus neither grounds nor jurisdiction. Frankly, my dear, they don't give a damn. And, if you simply declared the income to the IRS and your state, neither would they care. How to describe it? Well, the NV whore house 1099s list the pros as entertainers as I recall. Go thou and do likewise.
Many providers have the problem of living better than their declared income. If they are ever audited - a very unlikely but possible event - they have no way other than to dig deeper holes by saying my boyfriend(s) pay/paid for all this. Then,, of course, you can't produce the boyfriend. Some listen to good advice; most don't. But it is true that not declaring income is a deadly serious issue with the tax people. One can be aggressive as to deductions and pay a cash penalty if audited. Failure to report is federal penitentiary time.
LE would not report you; there is no such crime as "income tax evasion" under 18 USC (US criminal code). There isonly "tax evasion" which is failing to perform a known legal duty to pay a certain tax. There isno legal duty to pay income tax. Very very seldom does anyone serve time for not reporting "income" or paying the bogus tax thereon. What happens is attorneys will get their clients, who may be arrested on other charges (in this case prostitution perhaps) to plead guilty also to tax evasion as part of a plea bargain. They plead guilty to a crime that does not exist. The whole income tax thing is collosal scam and fraud. Get it out of your head that income taxes pay to "run the government" or provide for anything. They pay the interest on the national debt; the interest mind you, not the debt itself.
This debt can never be paid off and the interest in mounting ever higher to the point where eventually one year's interest will exceed all the money in circulation. The interest is growing faster than the money supply. So economic catastrophe is in the offing, and of course people will blame the president,be it Bush or Kerry as if they had anything to do with it.
But getting back to taxes, the IRS wrote the book on fraud. The shit they get away with....they only seem to follow their code when it is in their favor. When it favors the taxpayer, they ignore it. They are, as Irwin Schiff correctly labels them, the "federal mafia".
Finally, if you want an education on why things are the way they are today, check out teamlaw.org and click on "history of this nation" link....stuff you'll never learn in school, and certainly not government schools.
Jen
Do NOT listen to poonhntr or whatever he calls himself.
Let's see: he suggests you stuff cash in a safe deposit box. To get a box, you must giveee the bank your social security number. Bank accounts (and brokerage money market accounts) are scanned by the tax people looking for selected social security numbers.
Take cash, get a cashier's check and pay your mortgage with it he says. Really? The IRS guy looks at your mortgage payment record and asks where did the money come from. Do you think the bank doesn't record a cashier's check payment as a payment?
That poster is not only wrong, he's dangerous. Do not try to hide income. Wanat to save on income etaxes? Move to Nevada or Florida. No state income tax tax. Of course, rates are lower than in, say, California. Be glad you have high income and pay the tax. You then only need fear LE. That's 45 to 90 days at most. Not the federal or state penitentiary.
I report; you decide.
Banks issue cashier's checks from your personal accounts. This means that to get a cashier's check you must have a savings or checking account at the bank in an amount greater than the amount of the check. Because of drug money laundering during the go-go 80s, the amount that you can cashier without getting asked a lot of questions is also limited.
If you want, you can always set up a small cash business and show your extra cash as income from there, pay taxes on it, and then the money is essentially "clean" in that you can justify having and spending it.
When the IRS looks into a suspected tax evasion case, there are two ways to tell if the person is being a cheat:
1) The person did not report all income on their returns - this is generally more cut and dry - the IRS needs to show where the $$ came from that you didn't report.
2) The person is living beyond their means. As alluded to above. I have a friend who's in his early 40s, has a 750k house (probably 80% equity), and I doubt has reported more than 50k/year in earnings in his life. Quite simply, the question will be where did the $$ come from to pay for it?
Just be careful in making large purchases, or living too ostentatiously if you're reporting a low income.
The IRS does not care what you DO for money. They DO care that you claim it. Under the privacy act they are mandated to keep all information on your tax returns private without a court order. File your income on a sch. C. Under type of business list it as undefined, and choose the undefined business code. That is truth, not fraud. Income from work as an SP is undefined under the IRC.
Oh really?? Then why, in the Privacy Act statement, buried near the end of your 1040 instruction booklet, are we told that the IRS can disclose your tax information to just about anyone they damn well choose to? Including "certain foreign governments"?? The privacy act is buried near the end of the booklet so no one will read it and realize how they are being scammed and defrauded.