I am reading the IRS regulation on business expenses deduction.  I am thinking to use escort service to entertain my clients. Can I get tax write off for hiring escorts to entertain my clients? Has anyone done this before?
I read about gifts can be deducted at $25.  Can I give escort service as a gift to my client and deduct $25 from my income tax?

I am thinking about opening a country club that serve the rich and powerful.  I am thinking of hiring escorts to give country club members BJ on the golf course.  Can I deduct it from my business expense?

a legitamate business use or need.

So, if you attend a convention at some fancy place, and you want to deduct your costs, the IRS could investigate whether there were educational or other business aspects of the stay that justify the deduction of hotel and meals, etc.

I've noticed that my business association is now covering their asses by assigning nametags with bar codes on them, and scanning same as you enter the auditorium for the meetings and lectures you were expected to attend rather than run off to the golf course (or local cat house, in my case. 8o)

Maybe if you get the escort to display or discuss your business' product or service with your customer first, and somehow document that, you could do this, but I bet if there is any hint that illict sex took place, that could put the kibosh on the whole thing and leave a nasty paper trail also.  The whole idea sounds risky to start with.

In any case, you are best advised to discuss it with your accountant if not your lawyer.  It's one of the more sticky areas of the Tax Code.

(still not a CPA)

Maybe if I am a billionaire I can play this game. For some middle class guy taking big tax deduction, it could raise red flags.

So you will have to keep very careful records of everything.  The trick will be to see if the IRS buys the expenses as being necessary for business.

I believe the IRS cross checked the CC receipts against the clients tax returns to determine if they were writing off payments to hookers as business expenses.

AAR please don't encourage this kid, every single post he has ever made was just another stupid idea on how to "beat the system" we should only hope he gets audited and has no time left over after dealing with the IRS to ask anymore stupid questions.

He really brings dumb to a new level.

Great news pal, I forwarded your post to Doug Shulman (IRS Commissioner) and he loved the idea.

If you wouldn't mind, Doug asked if you could supply the IRS with your current social security number and FEIN (if you're also a Corporation or LLC or Partnership) so he can personally follow up on this brilliant idea.

He also commented that he can't believe that more folks aren't taking advantage of the Code as you have so brilliantly pointed out the interpretations of the Code.

As an aside, he also loved the concept of the country club.  Be sure to take advantage of all the business expenses with that as well.  If you need some help, just drop Doug an email.  And one further note, if you are interested in a job with the IRS, they're looking for folks just like you who always think outside the box.  

END OF MESSAGE

I have not gotten my business started. I am writing in the hypothetical situation.  I will let Doug know when I start my business. I never took any deduction for escort services.
I am thinking about opening a business that involves Porn Stars. Escort Service will be a business expense for me to make porn videos.
Yes, there were CEOs and corporate directors that charge against corporate account in the New York Madam case.  The NY madam billed the escort service using a name that misleads the public into thinking the escort agency was an investment firm.
I do not plan to be deceiving with the IRS. Before I do it, I will consult with tax professionals.
I plan to be truthful about using escort services as a business deduction. You thought you got me on a crime. Sorry, claiming escort service as a deduction is not a crime when the service is justified as a legitimate business expense.

Why bother asking on this board about the deductibility of escort services if you already know the answer?  Of course it's an "ordinary and necessary" business expense.  I'm totally agreeing with your spot on analysis of the tax code...as well as all tax court rulings to date.  Honestly, I've passed this entire thread on to my many CPA's and CPA JD's as well as the EA friends I have who clearly know nothing of how to interpret or implement the IRC.  Your insights are refreshing, and much appreciated.

BTW...do you know Greg as well?  He posted this shit a while back.  I'm hoping he didn't try and really pull it off...but maybe that's why he's no longer a poster.  I hear that internet is not readily available in Federal prison  LOL




-- Modified on 8/12/2012 3:13:38 PM

A salesman begins a career with a new company and for a new guy he is able to quickly establish new sales records.  He submits his first expense report and listed on the items for reimbursement is "$500 for girls".  Well his boss reads this and calls him into the office.  "Look I know you are doing a great sales business and we expect you to entertain clients, but you just can't say 'girls' on an expense report.  From now on say 'hunting trip'."

Well $500 hunting trips became a fairly regular expense item for our young salesman, until about 8 month later when the expense item come in...

"$1,500 for cleaning rifle"

I am here all week.

A couple of problems. It might fly in parts of Nevada where it was legal.
I'm pretty sure an illegal activity would not be accepted.
Try claiming the cost of cocaine you bought a client.

Secondly if audited you would need a receipt. Good luck with that.

Maybe if you scheduled a threesome and discussed business with your client while seeing the escort.

The IRS generally wants to see that the expense is directly related to business.

You could treat it as a gift but then you would be limited to $25 and they will probably still want a receipt

A few years ago, a lawyer tried to write off call girl girl services as medical expenses because they provided stress relief for his job. Needless to say, he was audited and the deduction was disallowed.