I think people are confusing money laundering with tax evasion. Tax evasion is not reporting income, derived from legal or illegal means. Money laundering is, as described earlier, disguising the source of your income, to hide an illegal activity.
The easiest way for the IRS to bust someone for tax evasion is to find assets that the person cannot justify based on their reported income - i.e. living beyond your reported means. Living in a 250k house on 30k reported income (excluding other reasons for having funds like inheritance) would be a good example. They don't even need to prove what you didn't report - you have to prove were you got the money to afford your possessions.
My business is a perfectly legal cash business, with very low barriers to entry. We see many people purchase large amounts of inventory for cash, and later turn around and sell it for the same price or a nominal loss, and be paid by check. In this fashion, they can show the transaction, underreport their cost basis, and pay income taxes on the "profit" reported, enabling them to justify their lifestyle.
I understand that money laundering, as it applies to prostitution, is basically the process of concealing the existence, illegal source (prostitution) or application of income derived from criminal activity (prostitution) and the subsequent disguising of the source of that income to make it appear legitimate.
The heart of laundering money is the deception of the authorities by making assets such as a new car, a home, furniture, etc. appear to have been obtained through legal means with legally earned income. Or making such assets appear to be owned by third parties who have no true relationship to the true owner.
If the above is correct, isn't every escort by definition guilty of money laundering? Has this charge been levied againt your average escort as a matter of course or is it reserved for the high profile Madams?
Just wondering.
"The heart of laundering money is the deception of the authorities by making assets such as a new car, a home, furniture, etc. appear to have been obtained through legal means with legally earned income."
Money laundering is taking money that was made from illegal activities and making it appear as if it came from legal means. This can be done by investing in a cash based business such as a strip club for example and your profit would be legal income. Say you gave the owners 50 grand in cash that you earned illegally and received 40 grand in profits that could legally be reported to the IRS. The owners kept 10 grand as their payment. There still would need to be some kind of paper trail that showed you invested a small amount of cash that you could legally account for - say 10 grand. With your so called legal profits you could now buy a car or a home safely and be able to account to the IRS where you got the money. This probably isn't something that most providers would be involved with but it wouldn't surprise me that some are. So, to answer your question: No. Most escorts are not by definition guilty of money laundering.
By placing money in a interest earning account or any account..it can open a can of worms. It is far better to keep money..in a safe haven..whereby no info is given.
Off shore accounts..Nevada Corportation. This is sometimes far too complex for the provider.
report you to other government agencies? Back in the 60's, the Post Offices had signs telling bookies to pay their taxes and insinuated that they would NOT be reported to other agencies. Escort/personal attendants should have the same privilege if that situation still goes. Is that still the situation?
I think people are confusing money laundering with tax evasion. Tax evasion is not reporting income, derived from legal or illegal means. Money laundering is, as described earlier, disguising the source of your income, to hide an illegal activity.
The easiest way for the IRS to bust someone for tax evasion is to find assets that the person cannot justify based on their reported income - i.e. living beyond your reported means. Living in a 250k house on 30k reported income (excluding other reasons for having funds like inheritance) would be a good example. They don't even need to prove what you didn't report - you have to prove were you got the money to afford your possessions.
My business is a perfectly legal cash business, with very low barriers to entry. We see many people purchase large amounts of inventory for cash, and later turn around and sell it for the same price or a nominal loss, and be paid by check. In this fashion, they can show the transaction, underreport their cost basis, and pay income taxes on the "profit" reported, enabling them to justify their lifestyle.
Generally I agree with The Law Doctor but not here. Investing money in any corporation, Nevada or other state, or an LLC or a partnership, limited or general, is absolutely the wrong thing to do in this case. It affords no protection and, in fact, provides multiple layers of scrutiny.
While a Nevada Corporation is exempt from state INCOME taxes, it is not exempt from other state fees nor is it exempt from federal taxes and must file its annual return just as any other corporation. File falsely and watch out!!
I put some money in the bank but it is just a little....3-400 a week..I report myself on tax reports as a web designer and actually have a domain up on such a business. I also run errands for people w/ no car or do grocery shopping but I am not putting thousands in the bank...
if I could figure out how to do that...I would take more clients but right now I still with a few a week to keep profits and legal hassles down.
Money laundering is not simply laying low. It means
putting money through a process to hide its illegal
origins. Putting money under your mattress is not
money-laundering. Saying that you are a web designer
is not money laundering. Money laundering is channeling
the money through some process to make it look like it
is coming out of a legitimate business. Simply saying
you are a consultant and you earned $X is not money
laundering. I would hazard a guess that you can never
be laundering money through your own personal business,
which is your own. Money laundering involves sending
money through several steps, so that it looks like another
business is paying you income for some other reason.
Simply putting money into your own business is not
money laundering because it does not involve another
business paying you legitimate-looking income on false
pretenses.
Similarly, money laundering involves the corruption of
that other business because the accounting of that
other business will be FALSE as a result of the money
laundering.
However simply putting money into your own bank account
and claiming that you got it doing something legitimate
is NOT money laundering.
get a retail liscense and keep records of customers you sell to at flea markets and then report your income
at minimum the more successful providers...the ones doing more then 25k in revenue should be construct a business - like web consulting or relationship consulting.
report all the money that goes into the bank...of course not all goes into the bank...but enough to cover rent, car, insurance, basic living expenses...
then deduct the car, meals, computer retirement sep...up to 40k for those that net more then 200k. paying minimal taxes and able to invest money for their future...
any providers can contact me if they need help...i am a professional here in so cal 