Getting Audited...

ripsigg said:
Why people let themselves get audited is beyond me. If you are making coin, just hide your tracks.

Example:
Get paid through LLC 1. Pass all profits from LLC 1 to LLC 2 every year by way of a 1099. Have LLC 2 pass it on LLC 3. LLC can pass it on to an offshore company where you withdraw it all. Just hide ownership in those three LLCs which is relatively easy to do.

If you want to hide yourself and income even further, rent your apartment, buy your car, etc, etc in the name of one of your LLCs, and it could be one totally unrelated to the ones in the example.

Hell, why not create a circular company that no one is the owner of. Hiding is easy.
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lol

The way to actually accomplish what you're saying here which is hilarious is to do the following.

1) Setup a real offshore company, rent office space, employ several people full time in said country. Bank there.
2) As you personally, the American citizen, draw an 'acceptable' salary - say $200k as a consultant to this offshore company (which you are not directly a director of and there IS a director who is employed by this company full time, has their hands in it operationally, etc
3) The company has an executive appartment - paid for out of it's BVI or other accounts. The company may also have a corporate jet. Or perhaps company cars. You the consultant could *USE* these. They would NOT be used 100% of the time, nor would they be your only/primary place of residence (read- you'd need to actually have your primary residence elsewehre, but sure you could live in the 8k sq ft miami penthouse).

etc etc etc

This is how what you're describing is actually done. The way you make $50M and 'don't pay taxes' is to KEEP THE MONEY OFFSHORE AND KEEP IT IN THE COMPANY. The second you pull it out personally and try to bring it into the country and spend it you've got serious issues and are now going to pay heavy back taxes/penalties at minimum, or go to jail for tax evasion should you get 'smart' and lie about what you're doing.

The problem of course with these 'hey I found a way to pay very little taxes' are that to do this correctly it has significant operational costs. Not to mention you're paying taxes on the $200k salary you're paid by the company at normal US rates.

Oh- and no one believes you if you're not at this level and you're only taking a $20k consulting salary yet rolling around in a $100k 'company' car.

Nope- that doesn't work well even if you are running it through a BVI bank.

Of course how aggressive people are with this is just like how aggressive they are with anything else.
 


Even if you have a masterful attorney, you still shouldn't do it. How many "masterful" attorneys and top partners went down in the E&Y case. The premise of passing income from one LLC to the next is just dumb on its face. It all passes through anyway to the same ownership.

If you wanna get sophisticated, start a non-cfc registered offshore company which avoids the requirement for subpart 4F passthrough. This enables you to defer taxation until repatriation, but not avoid it... still pretty powerful, but cost 250K to set up so your income would need to be over a mil a year to justify it. But a very smart and completely legal technique that the vast majority of cpa's and tax attys would never think of unless you suggested it.
 
ripsigg said:
Why people let themselves get audited is beyond me. If you are making coin, just hide your tracks.

Example:
Get paid through LLC 1. Pass all profits from LLC 1 to LLC 2 every year by way of a 1099. Have LLC 2 pass it on LLC 3. LLC can pass it on to an offshore company where you withdraw it all. Just hide ownership in those three LLCs which is relatively easy to do.

If you want to hide yourself and income even further, rent your apartment, buy your car, etc, etc in the name of one of your LLCs, and it could be one totally unrelated to the ones in the example.

Hell, why not create a circular company that no one is the owner of. Hiding is easy.
Click to expand...

This is a quick way to end up in a bunch of trouble. Bottom line, if you don't pay your taxes the IRS will catch up with you eventually. You might be able to get away with something like this for a while, but they will get you eventually. Yes, there are ways to lessen your taxes, but to do it like this and expect to pay nothing is crazy, at least if you plan on spending any of that money in the U.S.
 
exclusivewrites said:
This enables you to defer taxation until repatriation, but not avoid it... still pretty powerful.
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Everyone should print out the above statement, make 100 copies, scatter them around their house, and then comprehend it.

It's the SINGLE most important thing to know about 'being offshore' (from a TAX purpose)
 
There could be another creative (and legal) use of off-shore entities for people in this business. You could sell your LLC's a year after creation in a fair market valuation stock deal to an offshore entity. This would convert all of the profits post-sale from earned income into longterm cap gains, and the issue of writing off basis against income would be moot seeing the purchasing entity would be in a no (or low) tax jurisdiction.

I bet you could actually craft the sale as cash plus earn-out based upon performance thus deferring the cap gains until actually paid... and would do away with the need for the off-shore entity to obtain financing to make the purchase.

This technique only works if you don't have enterprise value.. obviously you wouldn't want to sell your company each year if it has brand equity, etc. However, if the LLC is basically just a shell for operations and a new one can be created each year without any harm.. seems ideal for many of you.
 
These schemes sound like a plot to a movie. Dont be a tard. Sure, it's true - Aaron Russo proved that there is no where - no law where it says you have to pay Taxes. We all know that the IRS is a money grabbing gestapo to fund bullshit gov. BUT...BUT, if you dont pay it, you must know that they will throw you into a Federal Pound You in the Ass Prison.

So make your choices.

Tax evasion = not smart.
Paying taxes = un-raped butthole and less Riotch, Biotch.
 
wicked1234 said:
They requested all expenses for a year... fucked.
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How difficult is that?

For my LLC, all expenses are advertising (easily exported from ad interfaces or IOs, and backed by credit card statements - other expenses like conferences, gifts, and business related tech purchases all have receipts or credit card trails), all revenue is straight out of network reporting (backed up by bank deposit statements), and all deductions are reasonable. What can be such a mess that you can't just export all of that info and have everything straight?
 
WF needs a fiscal subforum. I have suggested this before.

I have key contacts whom are capable of aiding 90% of affiliate marketing circumstances. Also dp/gaming licenses... worst-case these guys even assist you with opening your own bank. They facilitate name changes, secondary passports, diplomatic immunity and so on.
 
evelynds said:
WF needs a fiscal subforum. I have suggested this before.

I have key contacts whom are capable of aiding 90% of affiliate marketing circumstances. Also dp/gaming licenses... worst-case these guys even assist you with opening your own bank. They facilitate name changes, secondary passports, diplomatic immunity and so on.
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NO what we need is a sticky that says.

Don't ask your stupid fucking legal and financial questions here we can't help you. Go talk to a REAL fucking lawyer or CPA.
 
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Just get a lawyer and accountant. No need to ask for advice here where you don't know if the person giving advice makes a living on their own. Also anymore trying to hide money or put it offshore is next to impossible for those doing under a few million a year and being solely based in the United States. Also I don't get why you are getting audited in December? Seems like kind of a weird time for them to think that the stuff from last year you submitted is not adding up or looks suspicious. Hire a lawyer for all your business, hire an accountant, and hire another lawyer that specializes in the IRS.
 
evelynds said:
WF needs a fiscal subforum. I have suggested this before.

I have key contacts whom are capable of aiding 90% of affiliate marketing circumstances. Also dp/gaming licenses... worst-case these guys even assist you with opening your own bank. They facilitate name changes, secondary passports, diplomatic immunity and so on.
Click to expand...

Yes, these services are awesome. I bought the $225,000 Platinum Diplomatic Package. Now that I am Col. Augusto D'Anna De Abril, Surinamese Naval Attache to Belize, no one ever fucks with me.
 
It would still be cool for people to have a place to ask these types of questions and maybe hook up with others who have some answers or contacts. Saying "go talk to a CPA" is pretty retarded when your average CPA or lawyer knows jack shit about any of the "advanced" stuff. One of the stupidest things you can ever do is "just give it all to your CPA and let them worry about it" (unless you know for a fact that your CPA is hot shit) Your average CPA is no more than a human version of Turbo Tax. I'd venture that Turbo Tax Premier/Business is actually "smarter" and provides more helpful tips than the average CPA you cold called out of the phone book.
 
Ask Web Ferret, he's a PT (permanent traveler) so I think he knows a thing or two about tax stuff.

Also, the IRS got you the balls -- they're greedy assholes who WILL get your money, so they can give it to their criminal friends on Wall street.

[ame="http://www.youtube.com/watch?v=Z2iCo645eZk"]http://www.youtube.com/watch?v=Z2iCo645eZk[/ame]
 
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