Stanford law school grad failed to pay taxes on prostitution earnings

College Life
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<p><a href="http://www.contracostatimes.com/california/ci_10600922%5B/url%5D"&gt;http://www.contracostatimes.com/california/ci_10600922&lt;/a&gt;&lt;/p>

<p>A Stanford law school graduate suspected of paying off her costly student loans by running a high-priced escort service has now been hit with federal tax evasion charges.</p>

<p>In court papers filed Tuesday in San Jose federal court, prosecutors allege that Cristina Warthen failed to pay taxes on more than $133,000 she earned as a prostitute in 2003, jetting off as a call girl for clients in Washington, D.C., Chicago, New York and other cities. The government has charged her with felony tax evasion for failing to pay about $25,000 in federal income taxes....</p>

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<p>You can tax money you made from being a prostitute?</p>

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<p>Both legal and illegal income (prostitution, selling drugs) is taxable.</p>

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<p>133000 from prostitution! i just found a way to finance my college education</p>

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Both legal and illegal income (prostitution, selling drugs) is taxable.

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<p>Seems hard to tax what was done illegally. You never really know how much they made.</p>

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<p>I'm kinda surprised she kept exact records of her illegal earnings. Or how did they come up with that $133K figure?</p>

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<p>Technically, she's an escort, not a prostitute. I'm pretty sure escort services are legal. And also, most people who don't get paid by a company or institution (the best example I can think of is a professional poker player) will keep meticulous records of their earnings, because it's their salary.</p>

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<p>Yep, if you look on form 1040, there's one particular place where you're supposed to list "illegal income". They don't ask what kind. My assumption is that the result of paying taxes on your illegal income is that if you get caught doing whatever it is you're doing, then you just get hit with that, rather than that plus tax evasion.</p>