Do prostitutes get in trouble for not paying income tax? (possibly NSFW)

No.

They can get in trouble, for the same reason Al Capone got in trouble.

Income earned from illegal activity is still taxable.

But the tax authorities don’t go after low level criminals for tax evasion because the proof of income is too laborious for the small amount of unpaid taxes.

Yes, they owe income tax on all money received, just like anyone else.

The question was do they get in trouble. Since prostitution is illegal it’s underground and not worth pursuing.
Another argument for legalizing prostitution. Easier to track the revenue.

Income? I thought they usually spit it out.

What makes you think that they don’t pay income tax?

Some who don’t want to take the risk of being charged with tax evasion, do file a tax return as a self employed individual and they pay their taxes. Some pay quarterly so they are covered when they files their taxes at the end of the year. They also pay into Social Security. Just because their profession is illegal, it doesn’t mean that they are crooks

If they work for cash, it’s very easy to avoid paying taxes on cash.

If they take credit cards, they’d have to pay taxes on it but probably wouldn’t write “prostitute” on their tax form. They’d have to use another term for their title, like “escort” or “massage therapist.”

If they’re smart, they’ll declare the income as “professional services” or something similar. The IRS doesn’t necessarily care that the person is a prostitute – they want their money.

Yes, they owe income tax just like anyone else. But it’s hard to track and document how much they make it all of their transactions are in cash.

Prostitutes on their own would not be investigated. A brothel, however, would be, except brothel owners are business savvy, and pay taxes. In Nevada there is an entertainment tax, so their taxes would be impressive. They would call themselves a resort, or private club, so that entertainment tax would apply.
That satisfies authorities well enough for them to stay in operation, and maintain a liquor license. If something else comes into play, however, such as child porn, sex slaves, extortion, then tax evasion could be an added charge used to bring it down.

@SEKA. If they are working illegally, which 99% are, they work on a cash basis. The government has no way of tracking the income. The girls/pimps don’t file income taxes, and certainly not as an independent contractor. It’s ludicrous to think they would.

@Dutchess_lll They do work on a cash basis; however, some do choose to pay taxes on what they earn just in case they ever get prosecuted. They have proof that they have paid their taxes and can’t be charged with tax evasion. It’s their personal choice and I doubt that the pimp pays a dime on the income earned from his girls.

It would be interesting to see the receipt from a prostitute, or brothel, or other, and see how their name is printed thereon. The stub of receipt, and/or ledger, would/might be required in case of an audit.

@SEKA…..you have to provide proof to the IRS where your income came from. Prostitutes are no more likely to pay taxes than drug dealers are.

The IRS doesn’t givafck where the your income comes from. You file a return and pay the taxes on it, they will take it with no questions asked. Now, if you tried to claim a refund,you might have some splaining to do.

Before getting married, I worked for an accountnt and he had several hookers who came in every year to file their tax return. Just because you wouldn’t file a tax return if you were a prostitute, it doesn’t mean that all prostitutes wouldn’t file theirs