Uber and Under-the-Table Kickbacks

The ride sharing services Uber and Lyft are now active here in Las Vegas. There’s an interesting article on Buzzfeed about how Uber and Lyft got into Nevada. One of my clients asked me a question: Does he have to pay income tax on kickbacks from the local strip clubs, err, gentlemen’s clubs?

The last time I checked the Tax Code there was no exemption for kickback income from these clubs. Yes, it’s taxable. And further, some of the clubs are now issuing 1099s for these kickbacks. The IRS has investigated both clubs and taxi drivers here in Las Vegas in the past few years. The IRS ordered clubs to issue 1099s and taxi drivers to report kickbacks as income. Uber and Lyft drivers will also have to report their income…unless they want to get in trouble.

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