When you are an independent contractor you don’t have a traditional W-2 form. When people pay you for services you get a 1099 form which is used to verify your income that you have to pay taxes on.
Strippers IN THEORY are independent contractors even if they work at a club, so Mayweather is saying the money he spent on them was an actual business expense and a tax write-off. If Mayweather files under his business Mayweather Promotions, this once again IN THEORY be legit.
But, to get the tax break, he had to send the strippers 1099 form, but he decided to send it to the actual strip club.
According to documents retrieved by the Daily Mail, Mayweather Promotions LLC sent a 1099 tax form to the strip club and wants the club to pay taxes on the $15,000 in singles thrown into the air and $5,000 he and his crew spent at the club on May 25, 2014.
“The reason for doing that is to get a tax right off, but to me it is falsifying your tax records because he threw the money in the air,” he said. “If he wanted to 1099 somebody he should have gotten the names of all the entertainers he threw the money at.”
If Mayweather can prove making it rain is a business expense (entertainment budget can be used for tax breaks), he will end up owing less taxes.
The strip club has banned him for his troubles.