The “Appearance & Image” Issue Demystified

March 4, 2013 at 11:16 am (Adult Industry, Business, Uncategorized)

Since I announced the IRS’ new, specific wording last Summer about “Appearance & Image”, I have been inundated with questions and pleas about the issue. I understand your frustration and anger as I know how much those of you in both the Vanilla and Adult entertainment invest in your businesses. Even though we both know that these are, in IRS terms, “ordinary and necessary” business expenses, the IRS has put specific limits in specific wording on what can be taken as a deduction.

Firstly, please let me say that we tax professionals can only interpret the tax laws and follow them as we interpret them. However, when wording is specific, there is no magic power that we hold that can change it. We are not trying to be mean, but instead taking our clients’ best interest into consideration. Knowingly taking non-allowed deductions is considered fraud, therefore a tax professional who cares for their client at all will not lead them into these shark-infested waters.

I am going to share with you a few exerpts (below) from the IRS MSSP (Market Segment Specialization Program) – 1040 Tax Issues – Entertainment.

This guide is what the IRS auditors are given to assess the entertainers who they are auditing. The guide is “designed to provide assistance in auditing individuals in various aspects of the entertainment industry.”

Make-up
Make-up for performances is usually provided by the studio. Stage make-up that the
taxpayer buys for an audition or a live theatrical performance may be deductible, if it is
not a general over-the-counter product.

Wardrobe
To deduct clothes as a business expense, two requirements must be met. First, the
clothes must be required by the employer. Second, clothes must not be adaptable to
street or general use.

Expenses for costumes and “period” clothing are generally deductible. However, most
union contracts provide for compensation to be given performers who require special
wear. The taxpayer must prove that his or her contract did not include such
reimbursement for the expense to be allowable.

Physical Fitness
Deductions for general physical fitness are not allowable. Usually, if physical fitness is
required of a specific job, the studio will provide the cost. If the taxpayer was
employed in a capacity that required physical conditioning, allow expenses for the
duration of employment if no reimbursement or compensation was available.

What are solutions to this dilemma you can take right now? Well, buy stage makeup from a theatrical supply store and make certain that your costumes are indeed clothing that would not be worn in public, regardless if you would personally wear them or not.

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2 Comments

  1. 2rodgee said,

    What about strippers or burlesque type entertainers… they wear normal clothing for most shows until you get to the undies part and beyond.
    Then all the makeup is normal makeup but there’s a huge volume of it that’s not stage makeup’ by brand. Theres also a fairly new industry of webcam girls. They do have costumes sometimes but its normally regular clothing thats typically removed or worn for shows, Is there no allowance for that?

  2. taxdomme said,

    Sorry, but the IRS is very specific. Everyday clothing and makeup are not allowed as business expenses, regardless of how they are used and by whom. Camming is not a new industry and the same rules hold true for these performers. I am very knowledgeable about the many areas of the Adult Industry as I was a performer myself, so I know exactly of what you are speaking. I really feel for the entertainers, but these are the rules.

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