Preheat oven to 350 degrees.
Butter and flour two 9 inch pans.
Sift flour with baking powder and salt.
Cream butter; add 1/2 c sugar gradually and blend until light and fluffy.
Beat in egg yolks.
Add chocolate and vanilla.
Add flour alternately with milk, mixing well after each addition.
Beat egg whites until stiff but not dry.
Add 1/2 c sugar and fold into batter.
Turn into pans.
Bake 35 minutes; cool.
Pour 2 T Tia Maria over each layer and frost with icing.
Dust sides with chopped nuts.

Icing:
Melt butter in a saucepan; add sugar and milk.
Bring to a boil stirring constantly.
Cook over low heat 10 minutes or until temperature reaches 236 degrees.
Melt chocolate; add Tia Maria.
Stir into butter mixture.
Remove from heat and beat icing until thick enough to spread.
If icing hardens before cake is frosted, soften with a little hot water.