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Is the Shortage of Good Accountants in the Sex Industry an Opportunity?

Okay my friends, this is a serious problem in our country that needs addressed. The vast shortage of competent, professional, tax advisors and accountants for escort service businesses, brothels, and your run-of-the-mill houses of ill repute can go on no longer. If not for the business opportunity, then for the good of your fellow Americans and maybe your state’s dire fiscal situation.


Today we learned that the one of the proprietors of Companions, “a call-out escort service” in Salt Lake City that was convicted of one count of tax evasion. Jodi Hoskins and her husband Roy were both convicted of dodging taxes (he in May 2009) for the year 2002. They managed to underreport their gross receipts by $1,204,354 which resulted in evaded taxes of $485k-ish. As you can tell, this is a bit of a problem. And with all challenges/problems/giant pains in the ass, therein lies an opportunity.

Our position is that these businesses simply cannot go on without more accountants and tax professionals stepping up to help these pillars of the business community run their whorehouses better. This means you, GC readers. Your knowledge of the double-entry accounting, inventory, derivatives, and payroll will be invaluable for these entrepreneurs and their employees.

Plus! If more of these businesses are in compliance with state and federal taxes, that’s one more step to states becoming fiscally solvent AND Tim Geithner can give the cash printing machine break. Everyone wins!

Escort Service Operator Convicted of Tax Evasion [Web CPA]
Companions Website [Warning: NSFW]

Don’t Worry, the IRS isn’t Getting Too Soft

IRS_logo-thumb-150x140.jpgIn 2004, Congress wanted to lay the smackdown on individuals and entities using tax shelters. In order to scare the beejesus out those thinking about the practice, Congress enacted penalties of $100,000 for individuals and $200,000 for entities per non-disclosure to the IRS.
Problem is, Congress, who often pulls out the jump to conclusions mat, didn’t give the IRS any discretion on enforcement so Mom & Pop (who often don’t have kids) shops were getting hammered with fines they couldn’t pay:

In one case cited by the Small Business Council of America, a husband and wife followed the advice of a consultant and set up a limited liability company and Roth individual retirement accounts. When the IRS challenged the way the transactions were done and found income tax deficiencies of $6,812, it was required to impose a penalty of $1.2 million.

The IRS figured that maybe, just maybe, this wasn’t really working the way it was intended and has suspended the collection of fines in order to make the penalties more proportional. Not to worry though, the IRS hasn’t decided whether or not apply the changes retroactively and are only suspending the fines until September 30. They wouldn’t want to tarnish their image as faceless cold-blooded bureaucrats.
IRS Halts Fine Linked To Tax Shelters [WSJ]