Preheat oven to 350 degrees.

In a large bowl, whisk together the flour, baking powder, baking soda, salt, and nutmeg. Set aside.

In the bowl of a stand mixer, cream the butter and sugar together until light and fluffy. Add the eggs one at a time, mixing thoroughly between each addition. Turn the mixer to low and slowly add the coffee, Frangelico, Bailey's, Kahlua and vanilla, stirring to combine.

Slowly add the dry ingredients to the wet ingredients and continue beating on low until completely incorporated. Divide the batter among 24 cupcake wrappers filling about 2/3 of the way full.

Bake for 20 minutes or until a cake tester inserted into the center comes out clean. Transfer to a cooling rack and cool completely.

In the bowl of an electric mixer, beat the butter until creamy. Slowly add the Bailey's and milk, stirring to combine thoroughly. Slowly add the sugar to the butter mixture one cup at a time until the frosting begins to thicken and stabilized. Transfer to an airtight container and allow to rest for 4 hours or overnight.

Top the cupcakes with the frosting and decorate with sprinkles, if desired. Serve immediately or store in an airtight container for up to 48 hours.