I was in the tax preparation mode and while looking for deductions I came across an old prescription which reminded me how I got into this hobby. I was a hyperactive wreck (very type A) and needed to calm down. My doctor prescribed “relaxation therapy”. At the time I had no idea what he was suggesting and left his office. I was traveling in Florida; this was in the early 80’s, when I passed a billboard in the Daytona Beach area that advertised “relaxation therapy”. I jotted down the number and gave them a call, got directions. I figured what the heck, just what the doctor ordered. The place was in a strip mall next to a 7-11 and a beauty parlor. Several chairs setup outside and several attractive young ladies in the typical Florida attire were sitting outside to greet arrivals. God was I naïve. This was the days before massage parlors actually were a class of business I guess. I went inside and was asked to choose a “therapist”. I did so and followed her to a room MP style where she asked the question “is this your first time here?” I answered yes and she actually explained the session activities and the pricing structure. I choose the relaxation therapy session I felt comfortable with and we proceeded to the therapy room. What a great time I had. Felt like I was on the mend immediately.
After that I began noticing other “relaxation therapy” billboards and continued receiving my therapy. Next visit to the doctor he advised I was a much calmer person, blood pressure better under control etc. and I advised I was really enjoying the therapy. That is where we left it.
I realized that since this was a prescription it falls under medical expense deductions when preparing my federal income taxes. Since I was on the road I could have classified it as a business expense but either way it became a deduction.
How about anyone else? Where do you claim the expense?

Filing a joint return, I would have more than the IRS to come up with explanations for the "expense".

I don't know if i am fortunate or stupid but i have a small business i started last year in addition to my reg job i file under maintenance and repairs.
Which is not really lying because i am maintaining my sex life lol, and repairing my broken marriage by staying out of the way.

Don't publish, and take it as a loss.

wouldn't you need receipts?  
itemized deductions.... details  
1)BBBJ
2)RCG
3)CIM
that would be hilarious for the IRS to see.

I was just talking with a vendor today, and he brought up a lady that a buddy of his knows (provider).  I know her too, although the vendor doesn't fully understand the details.  I'm thinking that there may be a way for us to "entertain" each other in the traditional business sense, by paying for providers for each other.

Now, if only his buddy was my vendor, this could be so much easier.

Tricking the tax man is always a dicey proposition. Some of the biggest criminals of all time have been zapped not by getting caught engaging in criminal activity but for tax evasion.

Not sure if hobbying would be a deduction that would stand up under close scrutiny. And after a few years of less stringent scrutiny, the IRS is getting tougher on tax evaders.

without receipts it will not fly.  

At best you can claim hotel stays & car/travelling/restaurant expenses -- but under scrutiny you'll have to explain your trips as legit business travel ie which companies you visited, type of business conducted, etc.

Keep it simple... it's only a hobby...

can provide receipts ....under an S corp.

By the way, I am in chicago alot.

xo xo Lisa

-- Modified on 1/31/2008 4:53:10 PM

You might even get Wesley Snipes as a cell mate!

to a young lady's college fund?  Tuition is a legal deduction.  As others have said, NOT wise to claim a deduction without a receipt.

Great ideas on creating "travel" and repairs and maintenance deductions.

Since paying for an escort, is a legal activity as long as you had a valid business reason you can justify the expense.

But remember you can NEVER deduct expenses under any circumstances for any illegal activity no matter if you have receipts or a note from your Doctor.

And someone suggested writing a book on the hobby and call it research.  Well, believe it or not, there is a court case on this.

A former IRS employee who moonlighted as an author decided to pen a book on brothel girls.  So he spent two years doing his "research" by visiting as many girls as he can and after the interview, since he was there already he ummm engaged the services.

The IRS was victorious in court as they contended the payment for services was more "personal in nature" than business related, denied the deduction and the court agreed.

And remember this..any payment(s) to a person who provides services to you in excess of $600 must be evidenced not by a receipt but with you issuing a 1099 to the provider.  

So, go ahead and slip that W-9 form in the white envelope and see how far that gets ya....

Alex-

to accommodate the wishes of some hobbyists with provision of "receipts," the net effect of such conduct is that the lady in question runs the risk, however low it may be, of being charged with criminal conspiracy to commit tax fraud, which is a felony and carries significant jail time as a possible sentence.  The IRS is too big a dog to pick a fight with and only a moron would try.

While contribution to a qualified Section 529 plan may result in some tax benefit, payment of tuition for a stranger certainly does not qualify and will only prompt an audit with possible adverse consequences.  How would you like to explain to the auditor the basis for your deduction?

Tax evasion is the intentional not reporting of income.  Hence there is a greater likelyhood of many SPs seeing a judge than hobbyists.  I have a SP client who wants to be clean with the gov't and is going throught the registration process.  Happily in Canada it is a legal trade. She's still nervous about it though, especially knowing from now on she will be required to issue receipts showing the GST (a Federal level sales tax).  For the US, remember you need the receipt and proof of payment in an audit to sustain a deduction. Imagine sitting with your spouse adding up receipts at the end of the year.  Or worse, having an audit on your joint return and in front of you spouse having an IRS agent tell you the deduction is disallowed b/c it is not an allowable deduction. The wife probably would have a basis to file for the IRS innocent spouse exemption .

People should research the tax laws regarding gift taxes, paid by the giver, not the receiver.

As Tennessee Ernie Ford used to sing:

"If the right one don't get you then the left one will."

Are you and I the only ones old enough to remember him?

Only a moron would make a post like this.

You make big sweeping conclusions based on a little information.

The risks from a provider doing a special favor for select clients is minimal.

You are upset that someone would never offer to do that favor for you or you are upset that you arent self-employed so you couldnt pull that off even if you wanted to .........

-- Modified on 2/1/2008 4:00:31 PM

The providing of of a receipt for services rendered in no way makes the provider part of a "criminal conspiracy to commit tax fraud".  However if the deduction is challenged it may expose her to audit. The IRS may deem it appropriate to contact her. This is especially true if the dollar amount is large compared to that taxpayers income.

This is really a legal board discussion. Also the provider should consult a CPA. The hobbyist in some circumstances also may need to file a 1099 with the provider id #.

Not simple I know. Don't do anything like this without checking with a Pro!

Well I'll be dogged gone!

click link

isn't that what he was doing by seeing the lady in the first place?? Oh wait, you mean a tax PRO-- oh-h-h-h-h, ok I get it-- my bad...