Only fans IRS criminal tax investigation attorney
In 2020, OnlyFans posted a gross revenue of $2.3 Billion. Just one year later that figure increased to $4.8 Billion. When the IRS sees that a single industry is producing this level of growth and revenue, it is just a matter of time before they will begin to investigate the entity and its Officers.
In the last month, our firm has received numerous phone calls from individuals that are related to OnlyFans. Under investigation, these are the items that are being examined by the IRS:
- Bank statements
- Social media revenue
- Expenses related to OnlyFans income
Bank statements: These will show the amount of money that is being deposited into the accounts of individuals connected with OnlyFans. This is used to determine their gross income. However, there is another element that must be examined – Schedule C and transfers. Many OnlyFans contractors have 1099 income that is sent to their individual social security number. In turn, you cannot simply 1099 that income from yourself to your own S-Corporation and then take a dividend from your company. That is the equivalent of creating a shell company.
Social media revenue: Simply put, many individuals are not reporting this income. Just like a contract job at Fedex, you have to report the 1099 income that you receive from Instagram, TikTok, or Youtube.
Expenses related to OnlyFans income: Section 162 of the Internal Revenue Code clearly states that expenses must be in the ordinary and necessary course of business. For example, if you are a dog groomer, but you have expenses related the construction industry such as the purchase of heavy construction equipment, the IRS will likely undo those expenses. Similar, if you are a model at Onlyfans, deducting any expenses requires you to have a clearly defined need for the expense. It must be related to your line of work and work description.
If you have been contacted by the IRS, call our office to discuss your case.
Only fans IRS criminal tax investigation attorney
