It’s Tax Day. And while for most people, that’s H&R Block’s problem, some of us have more difficult situations to navigate — especially those of us with “complex tax situations.” Christopher Kirk specializes in such cases, as well as preparing taxes for “pro dommes, exotic dancers, burlesque performers, kink retailers, sex-positive professionals, sex educators and polyamorous families.”
A lawyer-turned-tax-specialist, Kirk founded his San Francisco-based company, Safeword Tax, in 2014. Its name signals both his own proclivity for kink and the trusted relationship he wants to have with his clients — not to mention that he’s an expert in cash-heavy earnings; the complications of joint-filing when a committed relationship extends beyond two people; and most of all, why it behooves even those who aren’t exactly making their money legally to still report every last penny of it.
Obviously, the IRS makes sure that all of us feel at least a little pain (no matter what we do for a living) — e.g., having to scan every last business-related receipt. And so, with just a few hours left before all of the requisite tax paperwork is due to the government, I talked to Kirk about how to make the IRS your bitch — and, of course, his specialty in sex work.
What’s the origin story behind Safeword Tax?
About seven or eight years ago, I decided that after a long time spent keeping my personal interest in kink and polyamory separate from most of my professional and public life, I didn’t want to live a double life anymore. I decided I wanted to live authentically and be myself. That’s also when I decided to serve the sex worker, BDSM, kink and polyamorous communities and LGBTQ folk — basically all sorts of fringe communities that aren’t well-served by traditional tax professionals.
Tax professionals tend to be conservative. So when you have people who are in relationship styles or have sexual lifestyles that are outside of the mainstream, a lot of them get uncomfortable with that. They either don’t want to serve those communities, or at the very least, they have negative judgments about these peoples and the activities they engage in. Most of the folks I do taxes for feel more comfortable coming to somebody who’s in a certain community with them.
The business itself built via word-of-mouth: The first poly triad I ever worked with referred me to a woman who was a sex worker, and so and so forth.
Are there any unique challenges that come with preparing taxes for sex workers?
The first challenge is convincing them that they have to declare all of their income. That can be difficult. For example, I’ll be sitting across from somebody who’s describing all of their income, and the first question out of their mouth will be, “How much of this do I have to report?”
Of course, I always say, “All of it.”
Some sex workers are under the impression that when cash is earned under the table, they can hide some of it, so they want to know how much they can get away with hiding. Also, there’s a fear that if they’re engaging in activities that aren’t technically legal under state or federal law, the IRS will take away all of their money. Plus, it’s hard to manage cash payments, so I recommend people deposit it all into a bank account, or at the very least, keep logs.
So for any activity that’s not legal — i.e., sex work — you’re still mandated to claim that money — even though it wasn’t generated in a federally legal way?
What’s an example of a complex tax situation you deal with?
I have a client in a poly triad. There’s a husband and wife and then a third person in the relationship. The husband and wife own the house they live in, but the third person is sharing in the expenses. That person has a W-2 job, as well as income from books they wrote and a rental property they own in another state, meaning you’ve got to do multiple state taxes now. With this person, being part of a triad with a married couple, their expenses and deductions aren’t standard. For example, they may not own the house they live in, but they do have an equitable stake in it.
What’s one piece advice you’d give people to make next year’s tax season a little easier than this year’s?
Scan everything. That’s the easiest way to do it, because digital storage is cheap and plentiful. It takes up very little space, and you can always print out a receipt that you scanned and provide that to the IRS. They don’t need to see the original. Plus, so many receipts these days either fade over time or turn black if you leave them in the sun too long. If you scan the receipt, you’ve got it forever.
I feel like a lot of young people think printing out bank-account transaction histories and highlighting certain items counts as bookkeeping. Is this system good enough when it comes to accounting for write-offs?
The IRS prefers to see actual receipts. If you went to Home Depot and bought $5,000 worth of materials that you used to remodel your bathroom, you must scan the receipt so you have a way to show, “Here’s the sink, the tile,” etc. Just having an entry on a bank statement from Home Depot isn’t as good.
Noted. In conclusion, to use BDSM terms, would you say the IRS is a domme, a sub or a switch?
In my opinion, the IRS is a top-heavy switch.