Ah, those revenue-raising schemes… They just keep getting better and better.
The Senate Finance Committee will vote today on what’s being touted the “pimp tax” proposed by Iowa Republican Charles Grassley. The bill will authorize the expenditure of more than $2 million to establish an office in the IRS Criminal Investigation unit to prosecute unlawful sex workers for not paying income tax.
The current regulations require that all income, legally gained or not, be reported to the IRS and included in income on Form 1040, line 21, or on Schedule C or Schedule C-EZ if from your self-employment activity (one of my personal favorite tax provisions). Under these regulations, the IRS has to prove a prostitute’s or pimp’s actual income to pursue a tax law violation. However, under Senator Grassley’s proposal, a pimp could get up to 10 years in prison for each prostitute for whom the pimp hasn’t filed a federal form W-2.
Will this bill encourage unlawful sex workers to comply with existing tax laws? Or will it simply be an excuse to create another bureaucratic office? We’ll see.
