Meet the Tax Pros Helping Sex Workers
WHY YOU SHOULD CARE
Because every citizen is obligated to chip in, regardless of profession.
By Jose Fermoso
Lori St. Kitts longs to give her clients the most satisfying form of release. Some of her sessions run for weeks, with vigorous back-and-forth. Her weapon of choice? Discipline, used to bring clients to the edge until they’ve met her strict goals. Kitts, 47, is the perfect person for the job — which, you guessed it, is as a tax pro. Oh, yeah: She also happens to be a webcam dominatrix and an unlikely voice in the fight against sex worker discrimination.
St. Kitts, whose firm Tax Domme helps porn stars and escorts, is part of a small yet growing group of bean counters quietly assisting sex workers in navigating America’s biggest minefield of all: the Internal Revenue Code. As the definition of who counts as a sex worker has evolved, more tax experts have started turning to these unconventional clients, and they’re now sprinkled throughout the country, including California, Washington state and Texas. A few years ago in New York, Brass Taxes began offering accounting services for “sex-positive businesses,” while last year in Arizona, Susan Ashe started doing the same for sex workers after she saw a growing need in the market. “There’s a lot of money there,” she says.
Popular porn star James Deen tells OZY he has paid taxes since he got started in the biz at age 18 — his dad taught him TurboTax.
Not everyone in the accounting field is open to helping sex workers, of course. In fact, some experts OZY spoke with didn’t feel comfortable publicly saying they work with people in the industry, much like how some are still wary of providing professional services to businesses in the marijuana sector, even where pot is now legal. Yet more pros are taking interest as the definition of a sex worker has changed. Anyone who sells a part of themselves, such as escorts, nude artists or even models, is now considered a sex worker, says Michael Fattorosi, a San Fernando Valley–based attorney. And, he notes, employment issues are actually coming up in court more often than indecency charges these days.
Indeed, sex workers seem to be courting more scrutiny these days as they gain cultural influence. While popular porn star James Deen tells OZY he has paid taxes since he got started in the biz at age 18 — his dad taught him TurboTax — he knows workers who’ve gone years without paying taxes. (Deen counsels them that “responsibly participating in the tax structure is the burden of being in a legal business.”) The loss of anonymity in the age of the Internet has also led sex workers to seek legal tax protections. For example, one nurse Fattorosi knows legally changed her name after escorting.
Many accounting experts who have clients in the sex work industry help them separate taxable income from nontaxable to ensure they aren’t mistaken for street workers. What’s considered legal versus illegal sex work is determined based on where the activity occurs and who pays for it. Mixing these incomes, though, results in a fraudulent return, and sex workers have to pay 100 percent tax on illegal income, St. Kitts warns. How clients end up submitting their returns without incurring the IRS’ ire can be tricky. One way is through euphemistic sleight of hand — by using “consultant” for legal work, for example, or “personal services” for illegal activity. (The IRS declined to comment for this story, though a representative directed OZY to a tax form while stating that all income is taxable.)
So how do buttoned-up tax pros get in contact with this group anyway? Advertising on sites like Backpage, or referrals through the grapevine. To develop trust, accountants try to focus on the numbers — and keep judgment out of it. Kitts has found it handy to share a PowerPoint presentation that puts clients at ease; the accompanying note says she’s under no obligation to tell the IRS about the nature of her clients’ work unless an audit is requested. So far, the approach has netted her more than 130 active clients.
For St. Kitts, the seemingly titillating job of a sex worker often gets reduced to boring line items — including deductibles. She once helped a client withhold income used for breast augmentation because the surgery was so important to the client’s business that she 1040-listed them as “working breasts.” St. Kitts deducts items like condoms and lube for porn and webcam actors — but not for phone sex operators, because they might not use them to achieve, um, results. One of her best little-known tips: “If you have dungeon equipment that has not been touched by genitals, you get to count it as a depreciating asset!”
Correction: An earlier version of this article misidentified the state where Susan Ashe practices.