I was just thinking about something about the whole thing when it comes to payment and how it's a great deal for the escorts.

No, it's not. Unfortunately not everything in this world can be paid with cash. I'm sure most don't claim all of their income but to keep yourself utr we make sure things are squared away tax-wise.

What's the point?

There was another recent discussion about taxes:  
http://www.theeroticreview.com/discussion-boards/ter-general-12/currency-and-foreign-transactions-report-908276?frmSearch=1#908276

Most hookers never pay a dime in taxes. They live "off the grid." They have a non interest bearing checking account that lets them have a debit card for the basics. Credit cards are easy to get. Just sign up at any school. LOL

Things are often not as simple as they seem to be from the outside.

Some women even piss their extra money away on education, car repairs and their kids. Da noive a dem! (as they used to say in Brooklyn.)
And some guys fudge their taxes and hide money from their SO's. Virtue is its own reward.

Smart ladies invest the income, pay taxes, buy real state, own cars, and have an amazing credit score!

I helped a provider setup some investments recently, but those who know, would tell you to pay your share of taxes, even though many keep some off the books.  Ironically, if you don't pay taxes you are committing a felony (they got capone that way) but even if you do and invest, you can also get piched for money laundering (also a felony).  Best advice, get a business advisor that knows the tax law.

told me she pays taxes on the $20's she receives but no other denominations. To each his/her own.

Adjusted for inflation Capone supposedly made 800 million a year. Hookers don't make the big bucks. Unless somebody turns then in it's very unlikely they will ever attract IRS attention while living off the grid.

I don't have a judgement on sex workers income tax. But, I claim my p4p expenditure under medical expenses. I stopped seeing a mental health therapist and started seeing hookers instead. I have gotten much better since that change.  
This deduction lowers my income appreciably.

I am a CPA and I play one in my office.

what is your plan if you are ever audited?,

Given that the escorting is an illegal activity, taking deductions against income from an illegal activity is not allowed.  Hotel costs, beauty shop costs, transportation, TER VIP fees, etc. cannot be deducted against the donation you get from the clients.

Her income was "zero".. in reality.. she was clearing $250,000 every year for the last 3 or 4 years... that's pretty close to $300,000 or more in my book... I have no idea what she puts on her tax return.. but she probably does not do one.
Another girl I know.. gave me a bunch of stuff.. earrings.. pocket squares.. cuff links.. I asked her what that was.. she said it was stuff she buys for her "business" a push cart... some where..

Not filing is one of the fastest ways to get the wrong kind of attention. I file on whatever I deposited into the bank that year.

I have advised several escorts on how to 'legitimize' some of their income through legitimate appearing means. This allows them to contribute to their Social Security and to have IRA's, create a credit profile and make cash purchases without drawing too much attention to themselves. It's incredibly easy to set up a business and if the tax laws change as anticipated it may be a great way to shield some income too.  
That said - several years ago one of the people I advised got busted in N.C.; for more than just escorting, and sang like a bird. Fed's rounded up all the folks she gave up on RICO charges calling the advice I gave her part of a criminal conspiracy.  She got probation, I got acquitted but that cost me almost 6 figures, and several others that assisted her, with no personal gain, actually served time. The system sucks!
Many years ago my accountant and lawyer both got busted.  Their partner in the little 'import'   business they bankrolled actually claimed 'ill gotten gains' as other income on his 1040 and paid taxes on it. They never made the trafficking charges stick but nailed my guys for tax evasion and both did time while the taxpaying partner walked.

Everyone is required to pay taxes on ALL income.  Sure some escorts may choose to not claim cash, but they could be charged with tax evasion., and the IRS seaze thier property for back taxes.