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Thread: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ's )

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    Default New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ's )

    (snip)"Small Business Jobs Act enacts new provision: 1099s will be required for 2011 payments

    The recently enacted Small Business Jobs Act includes a provision related to reporting requirements of 'small business' expense payments. After Dec. 31, 2010, the new law requires small business operators ( i.e. independent contractor dancers ) to file 1099s with the IRS for service providers such as [sic] DJ's, bouncers, waitstaff, clubs, etc. [sic] who receive more than $600 in ( total ) payments ( from the 'independent contractor' dancer ) over the course of the year.

    Even though the 1099 forms will not need to be issued until early in 2012, it will be necessary to begin keeping track of payment information on Jan. 1, 2011, and to collect completed w-9 forms from service providers ( i.e. DJ's, bouncers, waitstaff, clubs etc. ) to obtain their names, addresses and taxpayer identification numbers.(snip)

    (snip)Included in the provision is an increase in penalties ( leveed against the 'small business' i.e. 'independent contractor' dancers ) for failure to file 1099s with the IRS.(snip).


    With the US congress leaving town without amendments to the Small Business Jobs Act, on the first of January under the new law, 'independent contractor' dancers will be required to start individually accounting for 'tipouts' paid to specific DJ's, bouncers, waitstaff, house moms, house fees paid to the club etc. as 'business to business' expense payments.

    In order to be able to deduct these payments as legitimate business expense tax deductions on the 2011 end of year tax return, the 'independent contractor' dancers will be required to collect filled-out w-9 forms from said DJ's, bouncers, waitstaff, house moms, clubs etc. immediately, and to fill out and send out 1099-misc forms to said DJ's, bouncers, waitstaff, house moms, clubs etc. in early 2012 listing the total amount of money paid to them in 2011. Failure to do so could not only disallow a tax deduction for these tipout payments, but may also result in an additional IRS penalty fee being leveed on the 'independent contractor' dancer.

    It is HIGHLY recommended that 'independent contractor' dancers print out blank w-9 forms and take several of them to the club on the first night you work in 2011 ... requiring that the DJ, bouncers, waitstaff, house moms, and club manager fill out the w-9 forms BEFORE the dancer pays out any money for tipouts or house fees !!!

    blank W-9 form at

    ~
    Last edited by Melonie; 12-23-2010 at 11:18 AM.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    Quote Originally Posted by Melonie View Post
    it will be necessary to begin keeping track of payment information on Jan. 1, 2011, and to collect completed w-9 forms from service providers ( i.e. DJ's, bouncers, waitstaff, clubs etc. ) to obtain their names, addresses and taxpayer identification numbers.
    What a joke!

    At any rate, I'm guessing the DJs & other staff will kick up a fit over not wanting to release personal info to dancers. Clubs will have to find a way to circumvent this like increasing the house fee & then pay the staff their "tip outs" out of that so the only ones getting the staff info will be club management.

    Alternatively, clubs & dancers will either miss this or ignore it totally... & the IRS will have a mess on their hands to sort through.
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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    ^^^ actually, if they think they can get away with it, clubs, DJ's, bouncers etc. will probably try to ignore the provisions of this new law entirely ... expecting 'independent contractor' dancers to continue forking over cash tipouts and cash house fees with no w-9 info released and no 1099's being generated by the 'independent contractor' dancer at the end of the year. Essentially, it is the 'independent contractor' dancer who has everything to lose, and the clubs, DJ's, bouncers etc. who have everything to gain by trying to maintain the status quo.

    However, if this were to happen, and if this were to be caught during a 2012 audit of the 'independent contractor' dancer, not only would she be required to pay income tax and SSI tax on the money she paid out to DJ's, bouncers, the club etc. as if she had never been required to make such payments ( in the absence of a w-9 and 1099-misc report, the IRS will now consider these payments to be 'voluntary gratuities' like tipping waitstaff at a restaurant ), but the 'independent contractor' dancer also would very likely get slapped with an additional IRS penalty fee for failure to comply with the Small Business Jobs Act's 1099 reporting requirements.

    In 'real world' terms, the only leverage that 'independent contractor' dancers will have in covering their own butts re the w-9's and 1099's is to play hardball with the DJ's, bouncers, and club manager on the very first night they work in 2011. Either the DJ, bouncers, club manager etc. fill out the w-9's or they don't get paid their tipouts and house fees by the dancer !!!

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    I will do whatever it takes to stay out trouble with the IRS.

    But I know a lot of DJs, bouncers, etc., who won't do shit, and will probably laugh at any dancers coming up to them with paperwork to fill out. I also know a lot of dancers who probably won't bother with this shit, especially in the rougher clubs.
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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    ^^^ you're very probably correct on this assessment. However, for better or worse, under the new law it is the dancers who will be legally 'at fault' for not collecting w-9's, for not keeping required business records of payments to clubs, DJ's and bouncers, for not issuing 1099's etc. It will also be the dancers and not the clubs, DJ's and bouncers, whom the IRS will 'rake over the coals' if a future audit uncovers this.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    This is going to kill small business of all types. The govt screwed the pooch on this one and needs to repeal this requirement ASAP.

    Everyone will need to be an accountant just to be able to figure out the new reporting requirements.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    ^^^ well, for better or worse, the potential impact on 'independent contractor' dancers who work at the same club throughout the year isn't as tremendously burdensome as it could be for some small businesses.

    During the first night in 2011 that a dancer works with a different DJ, bouncer, house mom etc. or works at a different club, she needs to have each DJ, bouncer, house mom, club manager etc. fill out a blank w-9 form, which the dancer must retain on file in her 'business records'.

    After working each night, the dancer needs to make a 'business record' in her journal / spreadsheet / quickbooks of how much money she paid out to the specific DJ, the specific bouncer(s), the specific house mom, to the club etc.

    Then a year from now, the dancer needs to total up all of the payments made to each specific DJ, to each specific bouncer, to each specific house mom, to each specific club etc. throughout 2011. If the amount is greater than $600, the dancer then needs to fill out a blank 1099-misc form in the name of each of the above, along with the full year total of payments made to each - sending one copy of each 1099 form to the person / club named on the form, and sending another copy of each 1099 form to the IRS.

    Granted that this is going to be much MORE burdensome for dancers who travel and/or routinely work in multiple clubs ... with each different club, and the different DJ's, bouncers, house moms in those different clubs, all requiring a separate w-9 during the first night worked and a separate 1099 at the end of the year. Personally, I'm glad that I have retired.

    The penalties for late filing / not filing 1099's were increased as part of the Small Business Act as well

    (snip)The penalties for not filing a 1099 will be increased under the Small Business Jobs Act. The following penalties for not filing a required 1099 document will be in effect for the year 2011:

    •$30 penalty for filing a 1099 not more than 30 days late (was $15);
    •$60 penalty for filing a 1099 more than 30 days late and before August 1 (was $30);
    •$100 penalty for filing a 1099 on or after August 1 (was $50);
    •$250 penalty for intentional failure to file (was $100).

    These penalties apply per 1099 that is required to be issued. The maximum penalty that can be imposed per year have also increased.(snip)


    So in a typical scenario where a particular dancer works at say two different clubs througout 2011, we're talking about two 1099's in the name of the clubs, perhaps six more 1099's in the names of various DJ's, perhaps twelve more 1099's in the names of various bouncers, perhaps four more 1900's in the name of various waitstaff, and maybe two more 1099's in the name of the house moms - for a total of 26 dancer generated 1099's.

    Failing to file these 1099's ( which also means failing to collect the w-9's and keep the nightly business records necessary to have the personal and financial info necessary to fill out the 1099's at the end of 2011 ) could therefore result in the dancer having to pay IRS penalty charges totalling $250 * 26 = $6,250 ... on top of the extra dancer income taxes that will be due because the IRS will disallow the tax deduction for dancer payments to clubs, DJ's etc. made in the absence of 1099's ( thus raising the dancer's total taxable income even though she actually paid tipouts to all of the above ), on top of the regular dancer income taxes due on the money the dancer earned and was actually able to 'keep'.

    Obviously where travelling dancers are concerned, the number of required w-9's and 1099's could easily exceed 100, and the potential IRS penalties for not following the Small Business Act mandate of collecting the w-9's, keeping the nighty business records, and completing 1099's at the end of the year, could easily result in IRS penalties of $25,000+ for a travelling dancer .


    I would also add that the IRS computers will almost certainly be programmed to do an automatic cross-check for any 'small business' that receives 1099's in 2011 for payments TO that business ( i.e. clubs issuing 1099's to dancers for money paid out by the club from customer credit card charges etc. ) having also filed 1099's to reflect payouts FROM that business to other 'small businesses' ( i.e. DJ's, bouncers, house moms, clubs etc. ). From an IRS viewpoint, where dancers working at corporate clubs that routinely issue 1099's to dancers are concerned, this will be like 'shooting fish in a barrel' re auditing and penalizing dancers who do receive 1099's from clubs for 2011, but who don't collect the filled out w-9's, who don't keep the nightly 'business records', and who don't generate the 1099's at the end of the year !!!


    It looks like I picked the right time to retire from live dancing !!!

    ~
    Last edited by Melonie; 12-23-2010 at 11:21 AM.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    So every small business accountant should know about this by Jan.15?

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    Oh please. For the 10% of strippers that actually even file a semblance of realistic taxes, at this point its easier just to deduct the payouts from your gross earnings, and report the net as gross.

    I seriously doubt too many SCDJ's and bouncers are also reporting realistic earnings.

    Quit scaring everyone.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    Quote Originally Posted by Melonie View Post
    In 'real world' terms, the only leverage that 'independent contractor' dancers will have in covering their own butts re the w-9's and 1099's is to play hardball with the DJ's, bouncers, and club manager on the very first night they work in 2011. Either the DJ, bouncers, club manager etc. fill out the w-9's or they don't get paid their tipouts and house fees by the dancer !!!
    LOL You know as well as I do that this goes back to the issue that many of the clubs will think dancers are being drama queens (regardless of laws), & many who try this will be "released" of their independent status contract at the clubs (aka fired).

    If the IRS is going to be strict about this I would bet many dancers will find themselves in a legal court battle just to fulfill the necessary requirements to work legally! This is just such a shame...
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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    1099s have always been required for any business contracting for more than $600 in services over a tax year. What is new and is expected to create the "avalanche" of paperwork is the addition of requiring 1099s for the purchases of goods, and corporations are no longer exempt from receiving 1099s (my small business is a corp). However if you make purchases with a debit or credit card, the credit card company will submit the 1099 for you automatically, relieving you of having to collect the FEIN of any the vendors you buy from.
    Last edited by Dirty Ernie; 12-23-2010 at 06:19 PM. Reason: unwarranted and questionable advice. lol

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    What is new and is expected to create the "avalanche" of paperwork is the addition of requiring 1099s for the purchases of goods, and corporations are no longer exempt from receiving 1099s (my small business is a corp).
    What's new is a congressional authorization ( under the National Health Care Law ) for the IRS to add 16,000 new IRS agents !!! And most strip clubs are corporations as well, with the new law removing the previous exemption of dancers having to issue 1099's to the club for house fees ! What's also new are much higher IRS penalties for failure to issue 1099's !


    Quit scaring everyone
    Please don't 'shoot the messenger'. Dancers need to be aware of these new laws passed by Washington, their potential relevance to the dancers, and the potential negative consequences if the new laws are not followed.

    As to the 'real world' issues of clubs, DJ's, bouncers etc. balking at providing the legally required w-9's, that's a different story. However, the fact remains that under the new laws it will be the dancers who are 'legally' at fault if w-9's are not collected, and if payments to clubs, DJ's, bouncers etc. are made but not reported via 1099.

    As to the 'real world' IRS enforcement / auditing practices that may actually apply re dancers in the future versus the past, I have no idea. But the fact remains that the IRS will have 16,000 additional agents available, as well as new methodology available for running automatic computerized cross-checks on small businesses.

    ~
    Last edited by Melonie; 12-24-2010 at 02:22 AM.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    It seems this would be especially important for dancers working in clubs where the dances and VIPs are counted. Some of those girls don't ever see a stage or get tips for dancing (or minimally anyways). If all their money comes from dances (which is counted by the club, funny money system, etc..), then they would need to have proof for deductions. Or else they'll have to pay the tax on that additional amount themselves.
    Quote Originally Posted by markx View Post
    I'd have to have a "4 simease twin strippers gave me head and then lite themselves on fire" story to blow anybody's mind here.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    So every small business accountant should know about this by Jan.15?
    Arguably, they already know about it ... since the Small Business Jobs Act was passed last September, and the new provisions have been the subject of discussion in official trade journals, legal and accounting websites and blogs etc. ever since. It has also been the topic of discussion on all sorts of 'small business' websites and blogs, from 'landlords' to 'restaurants' to people who have made a business of selling stuff on EBay. The snips in my earlier posts were actually taken from a commercial real estate website, where impacts of the new law on 'landlords' was being discussed in detail ( i.e. landlords now need to collect w-9's, to track payments throughout the year, and to issue 1099's at the end of the year to plumbers, roofers, pest controllers etc. )

    What changed this week is that the 'lame duck' US congress adjourned without taking any action to rescind particular provisions of the SBA ... and in particular the new 'business to business' payment 1099 reporting requirements and the higher IRS penalties for failure to file those 1099's. As PornLaw pointed out earlier, ALL 'small businesses' have been complaining about this particular provision ... and there was some momentum building in Washington to have this provision rescinded. But with congress leaving town without taking action, it is an absolute certainty that this provision will now become law on the first of January.


    If all their money comes from dances (which is counted by the club, funny money system, etc..), then they would need to have proof for deductions. Or else they'll have to pay the tax on that additional amount themselves.
    The scenario you're discussing involves corporate clubs that will definitely issue 1099's to dancers at the end of the year for money the club paid to the dancer. In this scenario, under the new law not only is the deductibility of house fees paid by the dancer an issue, but there could also be an issue of IRS 'failure to file' penalties being charged to the dancer if an automatic computerized IRS cross-check against the club issued 1099 to the dancer doesn't turn up a similar dancer issued 1099 to the club !


    Oh please. For the 10% of strippers that actually even file a semblance of realistic taxes, at this point its easier just to deduct the payouts from your gross earnings, and report the net as gross.
    Yes it is, with 'at this point' meaning 2010. However, in 2011, the strong possibility exists that with the existing 'corporate' 1099 reporting exception for dancer payouts to the club now being explicitly removed under the SBA, that automatic computerized IRS cross-checks are going to be used to try and match 1099's issued by the corporation ( club ) to a small business ( dancer ) with 1099's issued by the small business ( dancer ) to the corporation ( club ).

    I hate to be completely blunt, but one of the stated goals by Washington politicians when passing the new laws creating these 1099 reporting requirements and authorizing the hiring of 16,000 additional IRS agents earlier this year was to 'improve small business tax compliance'. In government terms, this means collecting far more money in additional tax revenues from small businesses next year than it will cost the gov't to pay the 16,000 additional IRS agents and purchase / operate the new computers ! If you do a little math, if the additional IRS agents are working around 240 days per year, and are only averaging one 'informational' audit / investigation each per day, this potentially means that 3,840,000 additional 'informational' audits / investigations may occur in 2011. If each additional IRS agent averages a full week per 'full blown' audit, this potentially means that 768,000 additional 'full blown' audits may occur in 2011.

    In proportional terms, the IRS website shows that just over 21,000 agents and officers were involved in audits during 2009. Thus the addition of 16,000 new IRS agents is going to SIGNIFICANTLY increase the total number of audits that the IRS can perform in the future ! And one specifically stated focus of those additional IRS audits is to be small 'cash' businesses.

    Everyone is of course totally free to think that nothing is really going to change re the IRS and dancer taxes, thus my posts in this thread will have comprised nothing more than unwarranted fear mongering. And indeed that may actually turn out to be the case. Actually, I hope it does !!! But the 'problem' is that the actual IRS changes won't really be known until 2011 end of the year tax returns are filed by April of 2012 and audits begin ... whereas the new IRS compliance requirements go into effect within less than 2 weeks !!!


    ~
    Last edited by Melonie; 12-24-2010 at 03:37 AM.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    Melonie - while you have started a good discussion here, I wonder about your dates of enactment. From my research there appear to be 3 elements.

    1. ObamaCare expanded 1099 requirements to cover goods and expanding for payments to corporations starting in 2012.

    2. Jobs Act you referenced expanded rental expenses to start in 2011.

    3. Quite frankly existing law would require issuing 1099 to individual freelancers/contractors for service payments totaling over $600 in a year which covers much of the discussion in this thread.

    The element about increased enforcement personnel and increased penalties is significant.
    Last edited by racejeff; 12-25-2010 at 08:00 PM. Reason: correct typo

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    ObamaCare expanded 1099 requirements to cover goods and expanding for payments to corporations starting in 2012
    #1 - This is technically true. But in order for a 'small business' operator ( i.e. independent contractor dancer ) to be in a position to issue a 1099-misc report for payments to a corporation ( i.e. club ) in 2012, she must have collected the corporation's filing information via w-9 and must have kept track of total payments made to that corporation throughout 2011. This interpretation is showing up on lawyer's websites, small business group websites, etc.


    Jobs Act you referenced expanded rental expenses to start in 2011.
    #2 - house fees are arguably a nightly 'rent payment', thus clubs are arguably 'landlords' - who are now required to issue 1099's for all payments received in excess of $600 total in 2011. If the club issues a 1099 in the name of a dancer for payments made to the dancer ( i.e customer credit card charges processed on behalf of the dancer - which is also required in 2011 under the Jobs Act), and if the dancer doesn't also issue a 1099 back to the club for payments she made to the club, the discrepancy will stick out like a sore thumb when IRS computers run a cross-check. The same situation also now arguably applies to other non-conventional 'commercial landlords' as well i.e. hair salons, flea markets, fairs and trade shows etc. where the 'commercial landlord' is receiving 'rent' payments from small businesses for the temporary use of their 'facilities' to conduct business.


    existing law would require issuing 1099 to individual freelancers/contractors for service payments totaling over $600 in a year
    #3 - Technically this is also true - a point which more or less renders any arguments about dancers not being required to issue 1099's to DJ's etc moot. The disappearance of the 'corporate' 1099 exception in 2011 renders the same argument about dancers not being required to issue 1099's to clubs moot as well. But despite the fact that existing law technically requires that dancers issue 1099's for payments to unincorporated businesses, IRS enforcement to date has been extremely lax on this point. This is understandable since the penalties under current law for failure to file required 1099's for payments to non-incorporated 'small businesses' like DJ's etc. are limited at $100 each. At the same time, under current budgets, the IRS only has 21,000 agents. Thus from a 'real world' standpoint the IRS had had little reason / justification to 'go looking' for these 1099 violations, and particularly when doing so would have required diverting IRS agent attentions away from more 'lucrative' alternate targets - like 'rich' Americans failing to report and pay US taxes on incomes from foreign bank / investment accounts.

    But next year under the new law, the failure to file penalty increases to $250 each, and the number of IRS agents increases to 37,000. Also, for what it's worth, next year foreign banks / investment houses will now be required to generate 1099's to the IRS on the foreign earnings of their American account holders as the result of yet another new law ... thus freeing up the IRS agents previously dedicated to such investigations to now pursue other targets ! Thus I have a hard time believing that the IRS won't significantly alter their 'real world' enforcement priorities when, for example, examining a single corporate club's copies of 1099's issued to dancers will now hold the possibility of turning up perhaps 100 dancers * $250 failure to file penalty * at least 25 different DJ's, bouncers, waitstaff, house moms etc. who should have been the 'targets' of dancer 1099 filings = $625.000 in potential dancer 'failure to file' penalties. And this is on top of god knows how many additional tax dollars also potentially being collected from the dancers due to the IRS disallowing house fee tax deductions and/or 're-estimating' actual dancer income levels. Remember that if the IRS can assert that dancers have wilfully 'failed to file' required 1099's, that this official 'non-compliance' then provides probable cause for the IRS to also assert that other tax info provided by the dancers is of suspect accuracy and completeness. This opens the door, for example, for the IRS to then 're-estimate' that the $50k in taxable income that the dancer reported on her past three years tax returns might actually be $100k, resulting in the IRS issuing the dancer a 'deficiency notice' for three years worth of additional income taxes on the IRS 'estimated' but unreported additional $50k - PLUS penalties and interest - i.e a total additional tax bill of perhaps 3 * $15k + $6k in current year failure to file penalties = $50,000 ! That's a nasty potential surprise for an individual dancer !

    Legally speaking, if this were to happen ( and it HAS happened to dancers I know ... but precipitated by other causes ) the burden of proof will then fall to the dancer ... who will have just been nailed red handed wilfully failing to file required 1099's ... to then produce indisputable financial records proving that her actual income was NOT the $100k the IRS claims but the $50,000 that she reported on her tax return, and to convince an IRS tax court judge that the dancer should be believed over the IRS agent ! The fact that 'independent contractor' dancers do NOT receive authoritative 3rd party generated W-2 or 1099 official reports of their total incomes, i.e. that dancer's reports of their total income to the IRS are mostly 'self-generated' and thus very easy to 'fictionalize', makes credibility and business professionalism important factors if the IRS were to ever scrutinize a dancer's business records.

    When 'non-compliance' can be demonstrated by the IRS on one level i.e. the 1099 non-filings, and where business professionalism is also generally lacking in regard to the dancer's 'business bookkeeping' i.e. a lack of itemized nightly accounting of dancer earnings and payouts / a lack of separation between personal and business bank accounts / a lack of business expense receipts etc., this essentially leaves the IRS agent free to dismiss whatever self-generated dancer 'business records' that might exist as a non-credible work of fiction, and to then 'estimate' anything that seems remotely plausible to an IRS tax court judge ! This in turn leaves the dancer with zero credibility and zero 3rd party documentation with which to dispute such IRS 'estimates'.

    The situation of course gets even more tenuous if the dancer's personal financial records actually show more than $50k worth of bank deposits + investment transfers + college tuition payments + large purchases ( i.e. the IRS will absolutely check state motor vehicle registrations, property titles, utility bill payments, credit card payments etc. straight off the dancer's credit report ) + typical cost of living expense levels in the dancer's zip code area ( for which the IRS maintains a dedicated database ) in a year where she only reported earning $50k total. And the situation gets downright dicey when, for example, the IRS successfully 'estimates' higher dancing earnings levels for a dancer who also happens to be a college student ... who was claimed as a dependent on her parents' tax return based on her previously (under)reported income level ... but who now, based on IRS 'estimates' earned too much money to qualify as a dependent - resulting in an audit and additional tax bill for the dancers' parents as well as for the dancer herself. In fact, the same principle also potentially applies to student grants and subsidized loans, potentially requiring the payback of already received previous years' student grant money which the higher IRS dancer income 'estimates' retroactively render her ineligible to have received ! Indeed, from a gov't / IRS standpoint, these new laws are 'a gift that keeps on giving' in terms of potential increased gov't revenues !

    Basically, I have no idea how the IRS is going to refocus / expand their enforcement efforts towards strip clubs and dancers in 2011 and 2012, if at all ! But with federal and state budget deficits driving a need for maximizing tax revenue collection, with the new law's requirements to use as new enforcement criterion, and with 16,000 additional IRS agents to do said new enforcement, and with a stated congressional / IRS goal of increasing tax enforcement re small 'cash' businesses, it defies common sense to believe that nothing is going to change. Again, it is not my intention to unnecessarily 'scare' anyone. However, there is no disputing that where strip clubs and dancers versus the IRS is concerned, the situation has just changed signiificantly in favor of the IRS.

    ~
    Last edited by Melonie; 12-26-2010 at 07:51 AM.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    Quote Originally Posted by Christany View Post
    It seems this would be especially important for dancers working in clubs where the dances and VIPs are counted. Some of those girls don't ever see a stage or get tips for dancing (or minimally anyways). If all their money comes from dances (which is counted by the club, funny money system, etc..), then they would need to have proof for deductions. Or else they'll have to pay the tax on that additional amount themselves.
    This is possible in the case where the dancers entire income comes from traceable credit card receipts. But in my dancer experience, most of my earnings came from cash. Even on big credit card ticket / funny money nights of $1K plus, there has been enough $600 in cash nights to make up any earnings deficit in lieu of having to present my DJ 60 1099's.

    Many clubs already give dancers a receipt for house fee payments, those aren't tips and can be tracked with the receipts. Would a 1099 be needed here too?

    Aside from that, the easiest workaround it just to use cash earnings to tip the people and not declare the income. Honestly Mel, despite the laws, can you think of more than 10 strippers you've known who will be organized enough to do this? Also, what about the behavior of the DJ's and bouncers that will now have to deal with paperwork and traceable earnings. Now dancer is on stage to the Macarena and getting no help when a customer is assaulting her.

    There are IRS regulations and there is reality.

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    Banned Melonie's Avatar
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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    Many clubs already give dancers a receipt for house fee payments, those aren't tips and can be tracked with the receipts. Would a 1099 be needed here too?
    Under the new law the DANCER would need to issue a 1099 to the club for those house fee payments if they total more than $ 600 over the course of a year.


    the easiest workaround it just to use cash earnings to tip the people and not declare the income. Honestly Mel, despite the laws, can you think of more than 10 strippers you've known who will be organized enough to do this? Also, what about the behavior of the DJ's and bouncers that will now have to deal with paperwork and traceable earnings
    These are real world issues to be sure. However, the IRS is obviously aware that dancers earn 'cash' income in addition to 1099 income, and that dancers pay DJ's, bouncers etc. in 'cash'. And the new law says that it is the dancer's 'fault' when the new w-9 and 1099 regulations are not followed. As to the number of dancers ( or for that matter other small businesses from farm stands to small time landlords to landscapers etc. ) that are organized enough to meet the new w-9 and 1099 regulations, in the eyes of the IRS I'm sure that dis-organization and un-professionalism are beside the point.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    A lot of the dancers I've known over the years have troubles in setting up their own budgets (or in worst cases not being able to keep track of how much they owe their 'suppliers'). And the clubs most likely will not help enforce the W-9 demands the most responsible of them will make on staff. Seems that they would need help with both of those duties. This could become a disaster for some dancers who are much less than formal about their business.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    Quote Originally Posted by threlayer View Post
    A lot of the dancers I've known over the years have troubles in setting up their own budgets (or in worst cases not being able to keep track of how much they owe their 'suppliers'). And the clubs most likely will not help enforce the W-9 demands the most responsible of them will make on staff. Seems that they would need help with both of those duties. This could become a disaster for some dancers who are much less than formal about their business.
    Which is 98% of all strippers!

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    Melonie, thanx so much for the info. All were things that I didn't know. I sat down last nite, contemplating my tax rate, and was looking over my earnings since I started dancing again last year and was just like "oh, where do I start?" But after working at a club that takes a significant share of my earnings I started writing down exactly how much I tip to whom. It was just a way for me to figure out, personally, where so much of my $ was going and thank goodness I did. Thanks again.
    Thank Goodness I smartened up! The old me is dead and gone.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    Well, I'm glad you found my comments helpful in some way.

    I certainly didn't write this new law. I'm certainly not in favor of the new 1099 issuance requirement on small businesses. Nor am I in favor of spending tax money to nearly DOUBLE the number of active IRS auditors / investigators. There's still a chance that some or all of the provisions of this new law could still be repealed ... with a House vote due later this week.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    ^^ The govm't decided that a LOT of money is hidden and what they expect to recover is a lot more than the cost of these additional agents. They are probably right. I could see this extending to some state govm'ts too.

    But if they do collect a lot more tax, it will probably be used, not to pay off debts, but to 'justify' even more deficit spending, either the blue or red versions of spending.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    ^^^ be that as it may ( what the gov't does with additional tax collections ) one thing is certain. There is a MAJOR effort underway to try and collect additional taxes from segments of the US economy that have traditionally been allowed to 'fly under the radar'. And exotic dancing falls squarely into two acknowledged IRS categories of high interest ... 'adult' businesses and 'cash' businesses. With a near doubling in the number of active IRS auditors / investigators already approved under the ObamaCare law, and with similar increases in tax enforcement staffing at state and local income tax agencies, the future odds of an exotic dancer being able to continue 'flying below the radar' in regard to her cash dancing income has never been lower !!!

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    Default Re: New 'Small Business Jobs Act' : 1099's will be required for 2011 payments ( to DJ

    If the business wants a legit attitude from people, it needs to become in fact legit.

    But we all know that a lot of sketchy people choose that business, so good luck with that.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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