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Lesson Learned: Even Madams Pay Their Taxes

December 11, 2009 · 8 comments

For the most part, I’ve tried to avoid blogging the Tiger Woods scandal. I mean, you can pretty much turn on any channel at any time and hear all about it. And, except for the potential prenup/divorce issues, it has zippo to do with tax. And this is a tax blog. And even I have standards.

Except. Well. Er. C’mon – hookers and forms 1099? I.am.powerless.to.stop.blogging.it.

Michelle Braun, who allegedly made at least $8.5 million from her job as a madam, was eventually busted by the feds for charges related to a prostitution ring. She operated a high end call girl service which catered to Hollywood actors and royalty (if the name rings a bell, think Charlie Sheen).

Interestingly, she always paid her taxes – smart woman!

Braun has told TMZ that two of the women who have claimed to have relationships with Tiger Woods, Jamie Jungers and Holly Joy Sampson, were active in her escort service. Braun paid the women for their services out of Global Travel Network, her escort front. And she issued them forms 1099.

I know!

Tiger or no Tiger, the best part of this story is the whole “upstanding tax citizen” bit. Braun was apparently properly issuing forms 1099 for “non-employee compensation.” Remember, according to the Tax Code, even compensation received for illegal activities is subject to tax. Clearly, this woman had some pretty savvy tax pros at her side.

(And see how good I was there? Nary an off color comment!)

You can view the alleged tax forms here.

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{ 2 comments… read them below or add one }

1 Evan December 11, 2009 at 12:16 pm

Learned the lesson from Capone!

2 jake December 11, 2009 at 10:35 pm

Wow. The government sure loves their money. Did you know that buried treasure is included in gross income! lol.

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