Quote:
Originally posted by pimplink
You seem to know a bit of the US tax code. Here's a scenario:
You have an LLC or Corp here in the US. It contracts with a foreign corp based overseas for "web services" These services eat up 70% of your revenues leaving you with a net profit margin of 30%. You file in the US all your income but, per the tax laws, deduct the business expense to the Overseas corp. So you only pay taxes on the 30% you keep in the US.
The Overseas corp, which incidentally is owned by a "representatives board" which you pay, deposits the money they receive from your contracts, minus processing fee, into a local bank with US branches. You have an ATM card and can access the funds from a US branch of that international bank.
Variable #2: Certain countries have TIGHT bank secrecy codes so they cannot disclose who owns a particular account.
Put these two variables together and we need to answer the following:
Let's hear it everyone...Legal or NOT Legal?
By the way, US corps use a version of this exploiting some holes in the "finished product" and "foreign income" sections of the US Tax Code.
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Variable 2 is only true on a day to day basis...and a poor assumption to risk going to prison on.
IF it is true today... and you tell the IRS or anyone that you dont have that money, you dont have direct or indirect control over that account etc... it may be proven 9 years from today that you lied when they bust open that countries banking system as they have most others in the world... even Switzerland
here is the problem with banking secrecy... its great for protecting assets. its very bad if you want to use it to lie to the Internal Revenue Service. if you are liable for US Taxes, you can be imprisoned in the US. I know one Russian in Seattle who was not a citizen who was convicted of Tax Evasion a couple years ago.
otherwise, the short answer is yes. you can do anything you want and fuck the numbers around to your advantage. a German company can have a contract with a domestic "management" company for that management company to pay its bills in the US, receive payments etc. That foreign company can have an account at Citibank. so can the foreign company. there is no difference other than the person opening that account on behalf of the foreign company will have to be personally at the bank. The US bank and any bank is required to use "due dilligence" in verifying who they are dealing with. Otherwise you could be funding terrorists or laundering money from cocaine sales.
I have business accounts all over the world and this is usually the case. After 9/11, i have not seen an exception. it is true in the US as well. i have several accounts in one country, which had more than 100 debit cards for sub-accounts of that account which was how i paid people (instead of dealing with piles of cash in a dangerous country and shaky banking system)... all those cards were recently terminated by the bank and they require each person now to get them in person, providing ID's etc.(9/11 rules)
I think this is a shitty situation for people to be in... i understand how much it sucks. but the unfortuneate reality is that there is no shortcut or simple solution. whatever you do must be legal in the US and your own country of residence. Only an experienced attorney can work all this out.
hiding money in secret accounts is a good way to go to prison... each time you file your taxes, you will be forced to lie. The statute of limitations on that lie is 11 years (i think, maybe 13) in the UNited States. That means that 10 years from today, you can go to prison for lying about all this today.