This is Bruce Friedman of Adult Site Broker and welcome to Adult Site Broker Talk, where each week we interview one of the movers and shakers of the adult industry and we give you a tip on buying and selling websites. This week we'll be speaking with Mia Lee and Nate Mallory of FloorPlay Financial. I'll be in Cali, Columbia for the LAL Expo April 27th through the 29th. I hope to see many of you there. If you'd like to sit down and discuss business, contact me at adultsitebroker.com. We're proud to announce our latest project, thewaronporn.com. You'll find articles on age verification laws and other attacks on our industry. It's to raise awareness of our industry's plight in the war on porn. You'll find all that and more at thewaronporn.com. Now time for our properties of the week for sale at AdultSite Broker. We have a premium AI companion platform focused on emotional realism and deep memory. Users interact with lifelike companions that remember every detail and respond with real emotion. We have a network of BDSM subreddits. It has over 1.49 million users, over 3.8 million posts, and almost 45,000 comments. There's a porn picture site with both a Web3 and a Web2 domain. The keyword of the domains is one of the most globally recognized in search terms in the world, porn. We have a buyer who's looking for dating and lifestyle sites in Europe. They would also consider other geos. We're offering a strip chat white label. The average user spends 24 minutes on the site. We have a network of interracial reality hardcore sites. The main site has reality hardcore porn with amateur girls as well as some porn stars. We're offering a growing free porn gaming site with adult sex games. The site is owned by one of the top entrepreneurs in our industry. And there's a highly active, organically grown Reddit community centered around the stocking and foot fetish niches. For more information, go to our listings page at adultsitebroker.com. If you have any questions, please contact us on our website. Now time for this week's interview. My guests today, that is plural, on Adult Site Broker Talk, our old friends Mia Lee and Nate Mallory of their new company, Floor Play Financial. Mia and Nate, thanks for being back with us on Adult Site Broker Talk. Thanks for having us again, Bruce. It's a pleasure. So, Mia is the co-founder and CEO of Mia Lee Financial, a registered investment advisory firm that caters to adult. A licensed CPA and Series 65 registered investment advisor, she spent 12 years as a forensic accountant, that sounds exciting, before transitioning into sex work in 2018. Mia's first-hand understanding of the industry's unique challenges drives her mission to empower her clients. Specializing in asset management for adult entertainers, the firm combines deep financial expertise with real-world experience in the adult industry. Nate Mallory is a tax attorney and wealth manager and owns Only Tax Deductions Law Firm. Easy for me to say. Nate has advanced degrees in taxation, business law, and wealth management. He also has certifications as an accredited financial counselor, a certified financial therapist, and a credentialed mediator. Only Tax Deductions Law Firm is the adult industry's only tax law firm, representing businesses in the industry and content creators. Nate and Mia, you each had thriving businesses. So why complicate your lives by merging? Yeah, Bruce. Actually, I think Mia is probably a better person to answer this since you kind of came up with the idea originally. Mia, you want to take it? Oh, now it's my fault. Cool. All right. Well, so Nate is an attorney by training, And he noticed that a lot of his clients were really stuck on their simple tax filings, right? Not even matters of tax controversy. So I suppose Nate found himself running a tax prep company and he really wanted to focus on his law practice. And not to say that the tax filing is not a crucial part of what we do. It is, in fact, the bulk of what we do. But I think Nate realized that he could benefit from somebody with some corporate accounting experience to come in and take over the systems behind that tax practice. I conversely found after a year in the industry that a lot of my potential clients were not ready to think about retirement planning and wealth management because they were stuck on taxes and back taxes. So I really found a choke point at the tax filing stage where if I could not help my clients with their tax problems, they would never get to the point where they are able to build wealth. So Nate and I met at Exvis Miami in 2025 and decided to merge her companies. I think that's like the boring long answer. So you guys didn't meet at the Exvis LA in 2025? Because I met both of you there. You know, it's funny, we figured out that we actually did briefly meet in Los Angeles. And by briefly, I think we exchanged words for 20 seconds at one of the conferences on, I think it a tax conference at Exviz LA. And we just happened to be seeing either next to each other or one row over. But yeah, we did really actually meet until we got to Miami. Okay. Very good. So why don't you tell me what this new company is all about? So in any event, having my seven years plus of lived experience in the adult industry, I was actually naively surprised to learn what a deficit there was in provision of licensed professional and ethical financial and legal services to my colleagues and my community. And I say that generously, because I've heard so many horror stories, and Nate has as well, from our current clients of people who either were not appropriately licensed or were licensed and potentially shouldn't be, who provided professionally negligent or literal scam services to my colleagues. Scam services in our industry, I can't imagine. I know, right? I'm totally shocked that anybody would take advantage of a marginalized community with a lot of money. Yeah, I have no idea. So I came into this industry with a decent amount of privilege. Not that I grew up wealthy. I actually grew up incredibly poor. But I subsequently went on to have a very happy and healthy, lucrative career in finance, which allowed me to come into this industry with a wealth of financial literacy, which most of my colleagues do not have for a litany of reasons, starting with stigma. So I think that Nate and I saw the importance, and we also focus group this with some of my sex worker colleagues and friends, of having a firm where our clients didn't necessarily have to have the financial literacy to know the difference between entity formation as a legal service, tax filing as an accounting service, and investment management as a financial service. And we found that a lot of our clients found it really frustrating and confusing to source all of these services from different companies. And that's if they could even find properly licensed, decently credentialed with the adequate experience and ethical services to serve people in our industry. So Nate and I decided to put our licenses and experiences and companies together so that our clients would not have to essentially go to business school halfway to just intelligently identify these services. So if you can imagine a sex worker in the industry either entering or has been in the industry for a while, they might have needs ranging from LLC formation, LLC structure changes to filing current year or prior year taxes, and then they might also have money that they need to invest. And so now they don't really have to know the difference between all of those different things. We really just do all of it. Nice. Nice. So, Nate, what's the most common question you get from adult industry professionals, clients, and potential clients? There's definitely a couple that we get asked quite a bit. One really common one is, do I have to pay taxes on cash or do I have to pay taxes on electronic cash payments like Zelle Cash App or also having to pay taxes on gifts, things like cars. That was a little bit less common, but things as simple as paying for trips or using a third-party company for tips like you pay or the benefits program through some of those organizations. And that's a common one we get asked. And generally, the answer is always going to be yes, it's taxable income as far as the IRS is concerned. Yeah, you have to tax on cash, but of course, a lot of people don't because nobody knows about it. Right. You're only going to have on your tax filing the income that you report and the income that you provide information for. So if you don't provide all the accurate information, your return is going to be inaccurate on how much taxes you owe. That's true. Spoken like a true tax accountant attorney. Worded carefully, you mean. Exactly. What are other questions you get, Mia? So in addition to the myth that cash income does not have to be declared, I think the most common question I get, maybe because I am very public about my cosmetic procedures, I get a lot of people coming to me either assuming or asking if they can write off their plastic surgery. And unfortunately, the answer is almost always no. And I didn't write the tax code. I'm just giving you the reality check, right? So Business Insider did a feature on me maybe a year or two ago where they tallied up all of the cosmetic procedures that I had done. And it was a number somewhere between $60,000 and $90,000. So I don't know if that makes anyone feel better or worse, but I have been able to deduct $0 of the $87,000 that I spent on cosmetic surgeries. None of it was deductible. Well, if I were you, that would make me feel real good. I mean, look, we all as entertainment professionals in general, right? We feel that we should be able to deduct cosmetic procedures because we got them for work. And I'm not saying we didn't get them for work, but the IRS's position is that your business expenses have to be reasonable and not extravagant, and you have to only derive work benefit from them. And it's really difficult to prove that you only derive work benefit from things like breast implants or highlights for your hair. And everyone likes to talk about this 1994 case that Nate hates. I think she was a dancer in California, and this case went to tax court. And she won because the tax court ruled in her favor against the IRS, insofar as her breast implants in particular were so large and cumbersome that they were considered a fetish costume item. And therefore, her breast implants in particular were an honorable deduction. Do you have any idea how big we're talking about here? Nate might know this. I actually was just reading the case that has to be commissioner the other day for client explain why they couldn't write off theirs. The first breast augmentation was a double F. And then the performer got affected, had a new implant. And I believe the final number was a N cup, like November. It was so large. The direct quote from the judge was he described them as freakish. And that's the standard that's set to be able to write off a boob job as a tax write-off. Well, there you go, everybody. I might get this even more than Mia does because I get people that want to argue with me about it. And they always say to this one case and they talk about how they got 800 cc's or maybe 1,000 cc's. No, we're talking about each breast was 10 pounds. And this is from the court case. This is from the judge's opinion of the facts. I mean, that was entered into the reading. So it's a very high standard. And I personally don't know anyone beyond that case that has gone in and approved. Now, people might get away with it because if you don't get your return audited or looked at, there's all sorts of things you can get away with. But that doesn't mean that it was allowed or approved. And it doesn't mean that it's going to work if you try it, but someone else is going to get in trouble for trying it. Oh, my God. Well, and here's the other thing. I, as much as I care about my community and my clients, I'm not risking my license for you. Like, that's just not happening. Like, I worked pretty hard to pass those exams and get my degree. And, like, our company would cease to exist if Nate and I lost our licenses. So I'm just not willing to risk it. And I always tell, especially the ladies, I'm like, look, if it makes you feel any better, my normal size breast implants were also not allowable. Yeah, that's the most common one that I get at least. Really? That's the most common one? Well, I think after the cash income one, yeah, for me, I think maybe people just feel comfortable talking to me about it because I'm so public about my own cosmetic surgeries as an adult entertainer. Sure. Yeah, that's a good one. What's the most common and important legal tax and financial issue for new businesses in our industry that founders often overlook? I'll start with the legal side of it. Unless you got something burning, Mia, you want to go with one of the others? I was going to talk about the dangers of thinking that your LLC is anonymous when it's in fact not, but you probably have a better one. Nope, that's literally what I was just about to start talking about. Okay, well, I don't want to steal your thunder on that, but it's all started and you can give your legal elaboration. But I think from the perspective of especially individual adult entertainers, most of whom are women or gay men, they will form their own LLCs and they think that they're anonymous. And unfortunately, that's actually quite dangerous for people in our industry because people out there in the world are always trying to find our legal information and that can be dangerous for a litany of reasons. And so I explained to one of our clients recently, that the LLC that she formed to quote-unquote anonymously accept payments from clients was in fact so not anonymous that I found her legal name and address on the state website for the Secretary of State in the state that she registered her LLC in, and she wasn't aware of that. I mean, that's common, right? I mean, anyone can Google an LLC, and that's what will come up. It varies by state. Yeah, I'll actually do it while I'm on the phone with clients to show them just how quick it can be done. I'll do it in about 15 seconds. And ask them, oh, is this by chance your address? Yeah. Well, it's probably it took me 15 seconds to find it on Google. Yeah, and that's a really good reason not to put your home address on there. Well, so here's the thing. People are unaware that there is absolutely a way to anonymously form LLCs. It's a service offering that Nate has. And the reason it's $2,000 is because you actually have to form two LLCs and know the states where they don't require beneficial ownership disclosure. And then you have to form another LLC in the state where you actually operate your business and you have to have operating agreements. It's this whole process. And so we're not trying to rip anyone off, but I priced Nate's anonymous LLC formation at $2,000 because it actually takes a decent amount of time to do this correctly. So what I tell most of our clients is, is it really worth $2,000 to you for you to be able accept anonymous Zelle and PayPal payments from your clients? And for most individual entertainers, the answer is generally no, right? So someone who, like myself, I was operating as an escort and a dancer for the majority of my career. And even though I made seven figures some years, it still wasn't worth it for me. I was like, look, industry standard is that I don't take Zelle payments, or if I do, those are the clients that I'm comfortable giving my name to. And from my perspective personally, as someone in the industry who also has a license as a CPA and knows how to look up an LLC, I decided that I would rather give my legal name to five guys than the entire internet or pay thousands of dollars for somebody to form an anonymous LLC, which then we have to maintain for that client year over year. And there are penalties for not doing that maintenance correctly. Nate, did you want to go to the legal side? Yeah. So the anonymous LLC is definitely one of the most common services that comes across my desk, that along with contract reviews and non-disclosure agreements. But the anonymous LLC, there's plenty of services online that talk about this. And there's plenty of services that offer making an LLC where they'll say it's anonymous. And some do it correctly. Some fudge it up pretty bad, especially the lower-end price services. LegalZoom is a common one, right? I get a lot of contracts from LegalZoom or waivers of liability. And I read it, I can instantly tell. Usually, it's very easy to tell between LegalZoom contracts and just a GPT one. But sometimes those get it right. Usually, what happens is when you use those cheaper services, they get, I'll be gracious and say 90% of it right. Because often, most of it is quite solid. It's a lot of boilerplate language, a lot of LLC filings, really straightforward. Anyone can do it themselves. But it's that 10%, if you get it wrong, and you're a public image, or you have a large following online, that that privacy has a certain value to you that might be greater than a traditional worker. And then that's where having a firm like ours do it for you correctly is worth the value. And we'll also tell clients sometimes that it's just not worth doing it at all, right? Because for something like forming an anonymous LLC, if you can't do it right, just don't do it at all. And I will be the first person and Nate as well. So we'll be the first people to tell our clients, we don't think relative to your earnings, this is really a worthwhile expense for you. So we actually had a client come to us where her client wanted her to have an LLC for him to pay her. And this was one of her whales. And so I told her, look, like, given how much money you're making, I don't think it's worth it for you to absorb this cost. You're better off just giving your legal name to four dudes or whatever it is than potentially giving your name to the entire internet by doing yourself and doing it wrong or paying us $2,000 to do it. Alternatively, tell your whale to pay us to do it and we will do it for you correctly. So she went back to him and I think he's actually just paying our bill. But if it wasn't for that, I would not have advised for her to move forward with this because it just wasn't worth $2,000 to her in my opinion. Mia, I got a question as a performer, sex worker. What is your advice to others in that field who are trying to keep from being exposed in terms of their real name and their real address and for the safety that goes along with that? That's a tough one. I actually worked for this global risk mitigation firm for a while. And I I could tell you that if someone really wants to find your legal name and address, they'll find it, right? And it's always a cost benefit, like a lot of business expenses. So how much is it worth to you to be fully anonymous? And is that worth you being face out or face in? Is that worth you scrubbing yourself from everywhere on the internet, right? And I sort of went one very extreme direction where my legal name is on our required public disclosures for my investment advisory license and also for my CPA license. And Nate as well, right? Nate Mallory is Nate's legal name, right? Well, Nathaniel, but yeah. And because that's his law license and that's a name on his law license. So Mia Lee is not my legal name, but my legal name is not exactly a secret. So I'm probably not the best person to ask because for me personally, I decided to just not worry about that. And I think for other people in the adult industry who have potentially more vulnerabilities than I do, I would say there is a sweet spot that is a your mileage will vary situation, right? So like for some performers, it's worth a lot for them to be fully anonymous, and they're going to pay through the nose for that. And for other performers, they can't afford that. So they're just going to have fewer payment options and have less public exposure, right, through social media and other avenues. So it's really almost impossible to give everyone like a one size fits all answer. I think it's just a matter of like having to educate yourself as a business proprietor with respect to what it takes to actually maintain anonymity as a public facing figure and whether or not that's worth it to you and whether or not you want to be in an industry where it requires you to have your likeness out on the internet, right, and risk that public exposure and then have to pay those extra costs. So when you think about it on a large scale, right, there are celebrities who are able to maintain certain levels of privacy and they pay their attorneys and accountants and security advisors, a lot of money to do that for them. So do you make a million plus dollars a year? And is it worth that much to you? And for me personally, even when I was making over a million dollars a year, it wasn't worth it to me. I was like, fuck it. Like, if they want to stalk me, good luck. I have a gun license. I was just going to say, make sure you're armed or make sure you live in a secure building and you kind of watch your back because they are out there. There's no two ways about it. And I think it's worse than ever, especially with social media. Now Mia has her own personal guard dog. Yes. Who's also a company executive. Yeah, I hear that your dog is very vicious. So I think Nate is secretly or not so secretly itching to take this deduction to tax court. So we usually have to explain to the majority of our clients with very few exceptions that their pets are not dependents and are not tax write-offs. However, my dog in particular is actually an advertising expense to our company because Nate is a licensed financial therapist, and I provide financial advice, and we work with a heavily financially traumatized population. So my puppy Frick actually attends all of our conferences with me, and he is in training to be a therapy dog, and he has all of his proper documentation as a service dog. Nate actually also wrote him as an attorney and my co-founder a work letter. So Frick is the company therapy dog. This is the dog that's in your lap, right? Yeah. Well, he's on the floor chewing something that he shouldn't be right now. But yes, he was previously on my lap. What did you find? So Frick is actually our company therapy dog, and he does provide therapeutic services to our clients. It's fully legitimate. And we looked at the treasury and IRS guidance, and we were like, yes, this dog qualifies as an advertising expense because we absolutely, he gets us additional clients and our clients utilize his services. So we write off all of Rick's expenses, but that's a very specific situation, right? So if you are not providing licensed financial counseling and therapy to your clients, you cannot write off your therapy dog. Plus he's an attack dog, so there you go. So that's actually, Nate, Nate loves joking about that. Technically, if he was a guard dog and we could prove that up in court, that actually is tax deductible as well. Nate have you ever tried to write off your very large dogs as guard dogs uh i have not tried to write them off as guard dogs no they unfortunately would more likely help someone carry the furniture out to the band than stop them exactly kind of sounds like mine they'd bark and then they'd lick them to death so there you go well mine doesn't even bark so it's actually his his name was very strategically chosen. So Frick, F-R-I-C, is French slang for cash money. And he's a little French bulldog. And French bulldogs actually have, as their ancestry and history, a reputation. They became famous because they were companions to the working girls in the Paris Red Light District in, I think, like the 18 or 1900s. And so French bulldogs, if you Google history of French bulldogs, it's like salacious to civilians, not really salacious to our colleagues, but they're known for being companions to the working gals of Paris. And I have an Instagram video explaining this. So because of the clients that we serve, I really wanted to give him a name that was a throwback to his ancestry and my identity as a sex worker. So Frick is very well documented as a legitimate tax deduction, but that's kind of like the stripper's breast implants that were an end cup, right? Like this is very specific to our business, the clients that we serve, the credentials that we have and the services that we provide. And if all of those circumstances were not aligned, we would never be able to write off a therapy dog as an advertising expense. That's funny. Based on your experience and expertise, and Nate, I'll throw this one to you. What are the top three tax, legal, and financial issues established businesses in the adult industry and beyond don't think about but should? I'll answer on the legal side. I think the first would be the entity formation. There's a lot of people that don't understand what having a business entity does, what the difference entity structures are doing that are an advantage and what's a disadvantage, or whether they even need to have one or not. That'll probably be the first. Number two would probably be contracts. Most people think that you're not in a business that's executing contracts. You're not under many. But anytime you've agreed to any sort of terms of service, whether that's with OnlyFans or Cliffs for Sale, whether that's with a third-party vendor or having a management agency, very few people in the industry aren't involved in some contract relationship or another. And so there's a lot of not misinformation, but I think just lack of information on what's valid in a contract and what's not and what makes it enforceable and what's your actual legal requirements and what's the outcome if you were to breach that contract. Because we get quite a few clients that are trying to get accounts reinstated with OnlyFans for breach of service or reinstatement with payment providers for breach of service. And it all comes down to when you hire a service from a private company, you're agreeing to whatever terms they've said their policy. Yeah. Any exciting plans for floor play coming up? We actually have a big week next week. That's formalizing some of the documents for the merger. And I get to finally meet Frick as his puppy uncle. We're going to be attending Exotica in Edison, New Jersey. We'll be having a booth for Floor Play Financial. And me and I will be co-presenting on Saturday and Sunday. I realize now that this recording is coming out. I think much after the X-Men event is going to happen. By the time this gets posted, I'm sure the event went fantastic and we had a great time. But that's coming up next week. So we're excited for that. And by the time you release this podcast, I think Frick will become quite a known entity at the conferences because he'll also be attending. The plan is for him to attend every conference with me. So he'll be at XFIS, he'll be at ABN, and any panel that I'm speaking on, he will be sitting probably right next to me. Fantastic. As 2025 is coming to an end, and again, we will air this in 2026, what should adult industry professionals be aware of regarding taxes and upcoming deadlines? Let's say from January. Bruce, I'm so happy you asked. I'm so happy you're happy. That was a loaded statement because Nate knows that I was actually up until 10 p.m. on October 15th filing our last client returns. So the deadlines that clients should be aware of for non-disregarded entities at the federal level, which is a fancy way of saying if you have an LLC or any kind of business entity that has more than one owner, or if you have a single member LLC that elected S-Corp tax treatment, you have to file either a 1065 or an 1120S. And Nate, correct me if I'm wrong, certain business filings are due September 15, not April 15, right? So there's business filings due in March 15th and then April 15th. March is for S corporations, I believe, and possibly 1065s. I'd have to look. We just finished tax extension deadline. So it's been a long week and a lot of numbers are blending at this point. Yeah. And I felt bad for the clients that come to us. We had clients that gave me their documents in October for an October 15th filing deadline. So I was actually, we were both shocked and happy that I got all of our client returns out on time. But one of them literally went out at 9.58pm on Wednesday night on the day of the deadline. What was the deadline? 10 o'clock? The deadline was midnight in the jurisdiction where the client resides and operates. But Nate was like, please do not stay up until 2am your time getting this return out because the client got us their information in October for a 10.15 deadline. But I felt bad, so I did it. But anyhow, there is the extension deadline or sorry, the deadlines that I think tax filers, whether you're a business or an individual, should be aware of. There's March 15th for certain businesses. You also have to issue 1099s to contractors that you pay over $600 to by January 31st. So that's a really early deadline. And a lot of our clients just are not aware that their contract labor expense deductions are not allowable if they do not issue the requisite 1099s to contractors who they paid over $600 to. And with respect to missing that 1099 deadline, even if you miss it, you should still issue them late because there is a monthly penalty for failure to issue those 1099s. And it basically adds up every month into eternity. So we're at the point right now where since we got, we hit this deadline for the clients who filed extensions, we're now chasing down our clients who did not issue 1099s in January so that we can stop the clock on their deadline. So January 31st, 1099s have to be issued to contractors that you paid over $600. March 15th, certain business returns and filings are due. April 15th is the deadline for payment and filing absent an extension. If you do file an extension before April 15th for your individual return, that's an extension only to file your taxes, not to pay. So you would still be wise to pay what you think you owe by April 15th, because interest and penalties are accruing on that amount starting April 15th. And that's assuming you made all your requisite estimated tax payments during the year. So we have January 31st, March 15th, April 15th. And then if you were to file an extension, and that extension was accepted before April 15th, then the deadline to file for those who have requested an extension for filing is October 15th. And that's the deadline that we just hit for all of our clients who gave us their information before that date, basically. And so one of the other common misconceptions that I try to dissuade our clients of is that they should just file an extension and file later in the year. So in the corporate world, typically the only businesses and individuals that would request an extension are not the people who just didn't get around to doing their bookkeeping. It's people who are waiting for Form K-1s from partnership interest or people who are waiting for documents that they need to file their taxes that do not get issued until after April 15th. So for instance, I have certain private business holdings and some of those companies do not issue my partnership statements until after April 15th. So some years I have to file a tax deadline. I have to file an extension in order to correctly report my taxes. Now, if you're not in that situation, I would strongly, strongly encourage you to just get your taxes filed by April 15th and not rely on an extension to just take the can down the line and have another six months of anxiety. I promise you it's not worth it. Just get your taxes done. Also, another reason to get your taxes done early and filed early is that there is a three-year clock. It's a statute of limitations beyond which the IRS cannot audit you for mistakes and errors. Now, there's no statute of limitations on fraud, so they can open up an audit for fraud anytime going back as far as they want. But if you have a clerical error or a mistake on your return that is not considered fraud, you can't be audited for it more than three years from the time that you file. So personally, if I'm not waiting for statements that I need to file my taxes, I usually file my taxes by the end of February. Interesting. Very interesting. I got a question. How has the dismantling of the IRS impacted things? Well, I can tell you, it's definitely made the phone calls wait on hold even longer than before. That was already pretty bad. Right. But I mean, what about in terms of the taxpayer? I'd say what's been the downside from the dysfunctional government towards the taxpayers with the IRS? Yeah. I mean, what impact do you see that having? Do you see less audits? Do you see the entire IRS system becoming dysfunctional while more dysfunctional than normal? Nate's exact words were the IRS can eat a bag of dicks because he had to fax something, I think a couple weeks ago. I mean, it's probably one of my biggest gripes. The fact that I, even as an attorney representing someone, still have to fax the IRS or go through an absurd number of fall options and wait on hold to get a hold of a person. Jessica, I can't tell you how many times I've been hung up on. Someone just didn't want to answer my questions or direct me to the right person. So that definitely has an impact on the taxpayer because whether it's me calling or the taxpayer are calling on behalf of themselves, someone's not getting a high level of service and the systems are archaic. Understatement of the year. Right. Now, as far as does this mean you're less likely to get audited? Are you able to get away with more egregious changes on your tax returns? No, I have not seen numbers to really support that the audit numbers have significantly dropped. And if anything, there was a huge budget that was added in the last administration that was going to add a SNFM out. It was a couple billion dollars to the auditing departments. And you have different tiers of that as well. But wasn't that stripped away by the current administration? Right. That was stripped away. However, that was just the additional budget. The IRS still has a massive budget. Now, granted, that's squandered and wasted in, oh, God, so many ways. But that shouldn't let you feel no anxiety doing things you shouldn't do with your tax return, thinking that you're in the clear just because the IRS has less manpower or a smaller budget. They're still very actively auditing returns. And the internal revenue code has not changed at all. The penalties have not changed at all. It's a dangerous game to gamble on and personally want to be weak system to play with. I would also say that it should make taxpayers more wary to get their taxes right because it just means that if you make a mistake, it costs that much more in your time or our time or headache and anxiety to fix that mistake. So when I hear about budget cuts at the IRS, I'm not like, oh, I can pay less taxes. I'm like, no, no, no, let me make sure I get it right and don't have to file an amendment because if I have to change anything, I'm so fucked. Well, it's going to take forever and the penalties are going to be higher because of their incompetence. You know, that's what it comes down to. There's been a lot of changes in the United States from the, as I like to call it, orange blob administration regarding taxes. What changes will affect the adult industry specifically? Well, the one that's been gaining a lot of media attention has been the tax exemption on tips. and whether different occupations within the adult and sex industry are going to qualify for that or not. Originally, when it was getting talked about and being pushed through Congress, people were thinking that this was going to be a complete exemption on tips, ended up being, I believe, it's up to a $25,000 exemption, but it has an income threshold, meaning once you make above a certain dollar amount a year of income, you start getting less of that $25,000 until eventually you don't get any of the exemption at all because you made too much money. I had heard that anyone doing adult work was exempt from that. Exempt from the tips or exempt from that threshold? Exempt from any benefit. So that's the big question that I think is going to get tested in the next year or two, both in the tax court system or just in the IRS appeals, is whether these occupations and sex were qualify as, forget the exact term they use, but it's qualifying occupations for this exemption. And the Treasury Department put out a list of 70 some odd occupations that qualify. A lot of them were obvious ones that people were expecting, hostess, bartender, restaurant service, which is what most people think about when you think of a tip service. However, there's a couple occupations in there that are quite vague. There's one that falls in pretty commonly with what you consider content creation. And content creation carries over pretty arguably to things like OnlyFans and clips for sale. And that's not a far stretch. Entertainer from porn actor or actress is not a far stretch when you're just talking about occupation as far as the tax code goes. If you're an entertainer camera in one environment and you're entertaining our camera in another, granted doing different actions. As far as the tax code is concerned, I mean, here's the question that's going to get asked is if sex work is not within that list of occupations that the Treasury Department put out, then what occupation are they putting them under? You can't say that we're excluded from this list from the exemption without defining, okay, what is our occupation code then as far as you're concerned? If someone that does OnlyFans isn't an entertainer or an independent actor or a content creator or whatever generic term that might be available in that list, then why are you going to qualify them under? So that's going to be tested. But no matter what the cap on the exemption amount, as well as the income threshold, that's going to be something that's not going to affect all people in the industry. It's obviously going to affect high earners that are going to make them above that threshold. It's just something to keep in mind. If you're making majority of your income from TIPS and you're making well over $50,000, well, the exemption is only at a maximum of $25,000. So it's something to keep in mind. And then, of course, there's a decent chance that there's going to be audits targeted towards us. I think targeted is unfair. I know there's a lot of concern that the IRS might target what are deemed ethically questionable professions, you know, due to administration leading a more conservative direction as far as the judgment that might come from this line of work. You mean biased. Bias, yeah, bias, I think is fair. So there's a bit of a fear that that might be a thing, that sex workers might be targeted at using exemptions like this or changes to the tax code. It's always possible. But I think what's going to happen is there's going to be several professions in several industries that are going to be fighting for this exemption and other ones as well. I think the dollar entry is not going to be the only one that feels like they should be included in this exemption and other credits as well. And again, you know, the IRS only audits less than 1% of all tax returns. It's a very small fraction. I feel so lucky the first time and only time I got audited. Wow. I know, right? It's the beauty of statistics is, you know, statistical probability seems, you know, very safe until it happens to you. And then you don't really feel like the chances are so low anymore. Well, actually, I think audits are not necessarily, you don't necessarily have to be that scary if you understand what's going on and if you've done everything correctly. So I've actually been audited four times and I was nervous zero of them. I didn't owe any additional taxes any of those four times. In fact, the first time I got audited, it was, so the way the IRS starts their audits for the most part, as far as I know from personal experience, is you just get a letter saying you owe this many thousands of dollars, right? Yeah, you owe this and then you need to break it down, right? Correct. Yeah. So they have a shoot first and ask questions later philosophy. And I explained to all of our clients and just people who follow us and listen to our presentations that just because they say you owe that an audit letter doesn't mean you actually do. Now, you might. So in my case, the first time I got an audit letter, it said that I owed self-employment taxes on income that I had declared as ordinary income when I was working in finance because I was an egg donor. So I had additional ordinary income from my egg donation proceeds. And I literally just called the IRS in August. And this was back in, I think, like 2009 or 2010. And I was working in finance. When you could call them. Yeah, I mean, you could still call them. It just takes longer now. But I called up the IRS. I spoke to an agent. And I was like, look, this is egg donation income. It's not self-employment. I'm clearly not self-employed. I have like $200,000 a year in W-2 income. And we're talking about $30,000 that I made for egg donation. And the agent was like, yep, I agree. And then I was like, but I'll pay the $40 that I owe on these dividends that I forgot about. And he was like, lady, it's literally not worth my time to do the paperwork for your $40 tax on dividends. So he actually just got rid of it for me. I love it. Yeah, that actually worked out really well for me. Getting audited was great. That's actually a pretty spot on analysis to how the IRS operates is, yeah, when it's a small enough deduction or small enough tax liability, you're not the fish they're going after. Now, that's not to say that they're going necessarily after the really big fish. They kind of swim around more kind of the medium-sized fish, unfortunately. But there is quite a few deductions out there that if it's under a certain amount, it's not being looked at by the IRS because it's frankly not worth their time and budget to chase after a minimal amount of tax liability. Yeah. And I was audited three times after that. And every single time I didn't know anything. And one time was even two of those times, once was my ex-husband failing to declare the basis on some stock that he received as a tech executive. So it was like significant. He was like, we have a tax bill for like, it was like hundreds of thousands of dollars. And he's like, I didn't make that much selling the stock. And I was like, you're a moron. You didn't file the form declaring your cost basis. So then we had to amend his tax return, our joint tax return. We were married family jointly. And I probably should have spent more money on his credit card, his compensation, but that's not the IRS's problem. That was my stupidity. So I amended our tax return and we owed nothing additional. And then there was a time where I embarrassingly forgot to file the form that I need to file for a retirement rollover account. So I got a letter saying I owe these taxes and penalties on my early retirement distribution. And I was like, no, I don't. I just forgot a paper, which is embarrassing. I have a CPA. And in my defense, at the time, I was doing bankruptcy restriction. I did not do taxes. So I would not make that mistake now. I certainly would not make that mistake on behalf of my clients. One would only hope. Yeah, yeah, yeah. I know if I do that, I'm pretty sure that's professional negligence. They can sue us and file a complaint about me. But at the time, I was not a tax accountant. So I was like, whoops, sorry. And I was fully expecting the IRS to be like, you're a moron. We're going to report you to the Office of Professions for negligence against your license. They were just like, yeah, you're not a tax accountant. I get it. And I was like, oh, thanks, guys. So what are the major benefits of having tax, legal, and investment services all under one roof for adult industry professionals? So the feedback that I've gotten from our clients is that they had previously had to figure out who does what amongst their financial and legal service professionals. And now we just really do everything. So they don't really need to know what a bookkeeper does versus what a CPA, what a tax preparer does versus what a tax attorney does. Like one of my clients told me that she and her wife previously had the frustration of they had a separate bookkeeper, tax preparer and investment manager. And so each person would be like, well, that's not my job. You have to talk to this other person. The other person can kind of say the same thing. So our clients don't really deal with that. We're just like the worst they ever get in terms of the runaround is Nate or I will tell someone like, hey, I have to talk to my co-founder and get back to you on this. Right. Because like something investment related would be my side of the house. And sometimes a tax question gets so complex that it becomes a tax law matter. And then as a CPA, that's beyond my expertise. And I have to kick it to Nate and I'll email back the client with an answer. Okay. One last question. Should all adult industry professionals use a professional service for their taxes? And what about investments? No, absolutely not. It's a service that costs money, right? So no matter how affordable we try to make our services, not everyone is going to sensibly be able to afford them. And we actually do turn clients away for cost reasons. we are running a business. And so we don't have sliding scales. That being said, there are certain clients that ethically, even if they want to pay us, we'll just tell them that we don't think this is a good business decision for you. And so if you are insistent on paying our fees to do the thing, then we probably will do it. But we do at least give clients that disclosure that we don't really think that you're in a position, given your income level, to be paying us whatever the fee is to do whatever thing you're asking us to do, and that you should really just either do it on your own or some other iteration thereof. Sometimes clients come to us and they think they need an anonymous LLC for $2,000. And I'm like, look, honey, I haven't had one of these for seven years, and I made a lot of money in that seven years. So I think it's whether or not to hire a professional is definitely a your mileage might vary kind of situation. So I even have a client who's quite wealthy, but she just is very financially literate and manages certain retirement accounts for herself. And I was like, I don't think you really need to be paying us slash me fees to do these investment accounts that you can just do yourself. But administering a solo 401k is not something that you can realistically do on your own. So maybe I'll do that for you. I'll charge you the fees on that. And then you can manage all of your other self-managed accounts. So I think certainly, it's the simple way to look at it, in my opinion, is when the cost and value of your time exceeds the amount of time and energy that it would take for you to do these things for yourself, right? Everyone can be their own tax preparer. Everyone can be their own bookkeeper. And everyone can do their own entity formation. But at a certain income level, busyness, and value of your time, and opportunity cost of your time, it no longer becomes worth it. And those are the clients that we predominantly work with. Sure, sure. And let's face it, there's lots of online options. hell, if they make little enough, the IRS has free options to file your taxes. I actually used to supervise the centers. Oh, really? Yeah. So that was my only experience prior to this company in doing tax returns. That's how I learned how to do tax returns. I was a tax preparer at the VITA centers for about three years. My last two years, I oversaw a couple of the centers and I did the quality reviews because I speak Mandarin and Spanish and Arabic. So they just needed somebody with an advanced level certification to oversee certain sites. So I think one year I was in the Bronx, another year I was on the Lower East Side on the border of Chinatown. And yeah, those are great services if you're lower income. And I actually have sent clients to that service or potential, like I've turned potential clients away and told them that they would be better served going to a VITA center. What's that called? I'm sorry, VITA center? Volunteer Income Tax Assistance, I think is the acronym, or at least that's what it was called like 10 years ago when I volunteered there. Excellent. Hey, Mia and Nate, I'd like to thank you for being back with us on Adult Site Broker Talk. I wish you all the success in the world with floor play. I'm sure it's going to be great. And I hope we'll get a chance to do this again soon. Thanks so much, Bruce. Thank you so much, Bruce. And we hope to introduce you to Frick at the next conference. I can't wait. See him in LA. My broker tip today is part seven of what to do to make your site more valuable for when you decide to sell it later. Last week, we talked about trademarking your site and ways to make it unique. Next, when you decide to sell your website, make sure you have the following information available for potential buyers. Detailed information about your company, your website, and any other aspect of your operation the potential buyers may want to find out about. This should include, for a pay site, a detailed inventory of your content, number of images and number of videos. how much of those are exclusive, and how much are non-exclusive. Financial information for at least the last three years if your company is that old. This should include sales reports, profit and loss statements, and billing reports. Get all the information organized in a legible format that a good broker can use to sell your property. If you decide to sell it yourself, organize a list of potential buyers and start the process of contacting them. Be realistic about what your company is worth. In today's market, the kiss of death is overpricing your property. Is there anything that a potential buyer needs to know? Such as, are you being sued? Do you have any substantial debts? Don't let these things be a surprise to the potential buyer. They'll either find out before the sale and not buy, or they're going to find out after the sale, and you'll have another lawsuit on your hands. Disclose everything. We'll talk about this subject more next week. And next week, we'll be speaking with Mistress Cyan of Sanctuary Studios and DomCon. And that's it for this week's Adult Site Broker Talk. I'd once again like to thank my guests, Mia Lee and Nate Mallory of FloorPlay Financial. Talk to you again next week on Adult Site Broker Talk. I'm Bruce Friedman.
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