IRS OnlyFans Crackdown: Yoga and Cooking Channels at Risk of 'Porn' Label, Accountants Warn

Federal tax regulators have moved to exclude 'pornographic activity' from President Donald Trump's signature 'no tax on tips' policy — but the official guidance stops short of defining what pornography actually is. Proposed regulations published on 22 September 2025 specify that 'amounts received for prostitution services and pornographic activity are not qualified tips.' However, they offer no further clarification on what constitutes 'pornographic activity'.

This vague rule now governs a vast digital economy. Last year, OnlyFans generated $7.22 billion in gross revenue, with 4.6 million creator accounts. Many of these creators produce content that is entirely non-explicit. Yet, under the new guidance, even seemingly innocuous content risks being flagged.

Legislation and Lack of Clarity

The exclusion stems from President Trump's 'One Big, Beautiful Bill,' passed on 4 July 2025, which eliminated taxes on gratuities for bartenders, waiters, and golf caddies. The legislation aimed to fulfil a campaign promise, but left the specifics of excluded activities to regulators. The authorities have declined to provide a clear definition, leaving creators and tax professionals to navigate a murky regulatory landscape.

Industry Experts Sound the Alarm

Tax professionals warn that the policy is unworkable. A legal analysis published by TWR Blog cautioned that the regulation 'may lead to unconstitutional, or at least confusing, results.' Enforcement presents a major challenge. Thomas Gorczynski, a tax preparer, told The New York Times that the line between acceptable and pornographic content is entirely subjective—what one agent considers explicit, another might deem innocent.

This ambiguity is causing compliance paralysis across the industry. Tax advisors are unable to give clear guidance, leaving creators uncertain about how to proceed.

Creators in the Crossfire

The undefined rules disproportionately impact certain creators. Katherine Studley, a tax accountant representing several OnlyFans users, explained that the platform hosts far more than adult content. 'Where's the line?' she questioned. 'You could have a cooking channel or a yoga channel.' The fear is that creators will be judged not on their actual content but on the platform they choose. A yoga instructor posting workout videos could face the same regulatory scrutiny as someone producing explicit material — simply because both use OnlyFans.

Jessica Goedtel, a financial planner advising sex workers, expressed concern that the ambiguity is causing widespread panic. 'The IRS could be used as a tool,' she warned.

A Question of Legal Precedent

The IRS appears to be adopting a standard reminiscent of US Supreme Court Justice Potter Stewart's remark in the 1964 obscenity case: 'I know it when I see it.' This subjective approach to defining obscenity has been widely criticised under First Amendment law, as it grants individual officials unbounded discretion. Now, the same vague standard is being applied to tax liability.

The constitutional issue is evident: taxpayers cannot comply with a rule that has no clear definition. For example, a yoga instructor filming a workout cannot reasonably determine whether her content will be classified as exercise instruction or 'pornographic activity', a designation that could lead to substantial back taxes.

The Future of the Industry

Tax preparers anticipate a surge in audits, where agents will be forced to view content and make subjective determinations without an objective standard. Some creators may choose to abandon OnlyFans altogether, fearing arbitrary tax bills that could run into thousands of dollars.

The platform's business model relies heavily on non-explicit creators using it as a legitimate income stream, not solely for adult content. The lack of clarity risks undermining this model.

Legal Challenges Loom

Legal challenges seem inevitable. Until courts or Congress provide definitive guidance, millions of creators face a tax system that treats identical content differently depending solely on the discretion of individual auditors.