Sex workers do not have a legal source of income, something that makes filing for income taxes quite difficult. However, there are strong incentives for Utah sex workers to file taxes. A person, whether in Utah or any other state, needs a credit history to get a credit card, insurance, a loan, etc . . . To build a credit history one needs to prove a viable source of income, something that would be reported on yearly income taxes. Furthermore, penalties in Utah and the USA are much more serious for tax evasion then for prostitution. The first problem a sex worker would encounter when filling out their tax forms would be the line for listing their profession. Perhaps the sex workers could file under 711510 (independent artists, writers and performers), or under the number for amusement and recreation services, or under “other personal services”. If a Utah sex worker has earned a professional license or degree they could possibly file under a profession related to their degree or certification. It could be argued that the 5th Amendment allows a prostitute to leave the profession line on tax forms blank, or to provide another answer, due to one’s privilege against self-incrimination. Perhaps of aid to Utah sex workers is the fact that the IRS cannot legally disclose tax returns to law enforcement unless the individual is already under investigation. The opposite is not true; law enforcement officials can inform the IRS when they are accusing a Utah sex worker or other criminal of violating tax laws.
(IRS Circular 230 Legend: Any advice contained herein was not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Unless otherwise specifically indicated above, you should assume that any statement in this ‘blog’ relating to any U.S. federal, state, or local tax matter was written in connection with the promotion or marketing by other parties of the transaction(s) or matter(s) addressed in this ‘blog’. Each taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.)