Taxes / offshore question - GoFuckYourself.com

tical · 03-17-2010, 07:01 PM

If someone were to start an offshore corporation as a US citizen. Will you (as a US citizen) be liable / taxed on the income from this corporation if you are not bringing any of into the states?

Say your offshore corporation, "ABC Corp", earns $50k in 2010. You never transfer any of this money into the states. Later, you decide to go to Thailand for a few months and access the funds from there. You return to the US with $0 in your pocket, no souvenirs, etc.

Does this scenario violate any specific tax laws in the US if you're a US citizen? I can't imagine how it would, but I'm curious. Anyone here know?

Hmm... tax form 5471

xmas13 · 03-17-2010, 07:11 PM

Ask law students on relevant boards, also, Google is your friend.

xxweekxx · 03-17-2010, 07:12 PM

ya there is a part of the tax form that asks u for foreign income.. if you have $50k in foreign bank, its still YOUR INCOME.. so you need to report it, or get raped in prison

cheers

xmas13 · 03-17-2010, 07:13 PM

You can also call the IRS. They've got live assistance monday through friday. Or contact your local IRS office to request an appointment.

pornguy · 03-17-2010, 07:24 PM

Yes you have to pay. but only after making 80k plus

iSpyCams · 03-18-2010, 04:52 AM

I am not a lawyer, but this is what I understand and have filed a few times based on the following as was explained to me by my lawyers:

I am pretty sure if it's the corporation's income it's not your income, until you pay yourself. You need to report any offshore bank account you can sign checks for that has over 10,000 in it to the IRS by tax day, there is no extension for this.

Failing to report on time can lead to fines and jail time if the IRS ever finds out about your bank accounts.

If you are either a legitimate resident (have a resident visa) of a foreign country or else spend less than 3 weeks of the tax year on US soil, and if your income comes from outside the US and is less than 80k, then you can claim an exemption on it when you file and pay zero income tax on it.

This applies to salary only, not dividends or capital gains.

Zuzana Designs · 03-18-2010, 05:37 AM

Quote:

Originally Posted by pornguy

Yes you have to pay. but only after making 80k plus

So if you have several accounts under 80k are you ok?

SkeetSkeet · 03-18-2010, 06:01 AM

Income from Abroad is Taxable

Many United States (U.S.) citizens and resident aliens receive income from foreign sources. There have been recent reports about the interest of the Internal Revenue Service (IRS) in taxpayers with accounts in Liechtenstein. The interest of the IRS, however, extends beyond accounts in Liechtenstein to accounts anywhere in the world. Consequently, the IRS reminds you to report your worldwide income on your U.S. tax return.

If you are a U.S. citizen or resident alien, you must report income from all sources within and outside of the U.S. This is true whether or not you receive a Form W-2 Wage and Tax Statement, a Form 1099 (Information Return) or the foreign equivalents. See Publication 525, Taxable and Nontaxable Income for more information.

Additionally, if you are a U.S. citizen or resident alien, the rules for filing income, estate and gift tax returns and for paying estimated tax are generally the same whether you are living in the U.S. or abroad.

Hiding Income Offshore

Not reporting income from foreign sources may be a crime. The IRS and its international partners are pursuing those who hide income or assets offshore to evade taxes. Specially trained IRS examiners focus on aggressive international tax planning, including the abusive use of entities and structures established in foreign jurisdictions. The goal is to ensure U.S. citizens and residents are accurately reporting their income and paying the correct tax.

Foreign Financial Accounts

In addition to reporting your worldwide income, you must also report on your U.S. tax return whether you have any foreign bank or investment accounts. The Bank Secrecy Act requires you to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if:

*
You have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and
*
The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

More information on foreign financial account reporting requirements is in News Release FS-2007-15, Foreign Financial Accounts Reporting Requirements and Publication 4261, Do You have a Foreign Financial Account?

Consequences for Evading Taxes on Foreign Source Income

You will face serious consequences if the IRS finds you have unreported income or undisclosed foreign financial accounts. These consequences can include not only the additional taxes, but also substantial penalties, interest, fines and even imprisonment.

xxweekxx · 03-18-2010, 06:02 AM

Quote:

Originally Posted by Zuzana Designs

So if you have several accounts under 80k are you ok?

no, its just like saying if u open 10 bank acts in usa, and only deposit 10k each, then report your income as 10k

iSpyCams · 03-18-2010, 05:11 PM

The 80k thing is income tax, don't confuse it with the 10k limit on offshore accounts that need to be reported.

The idea is that if you are living abroad you are likely paying income tax to a foreign country, so those living abroad can claim an exemption on the first 80k they make each year. After 80k you pay taxes, used to be just on the difference, but I heard it was recently changed to the full amount if you make over 80k.

03-17-2010, 07:01 PM	#1
tical Confirmed User Join Date: Feb 2002 Location: Las Vegas Posts: 6,504	Taxes / offshore question If someone were to start an offshore corporation as a US citizen. Will you (as a US citizen) be liable / taxed on the income from this corporation if you are not bringing any of into the states? Say your offshore corporation, "ABC Corp", earns $50k in 2010. You never transfer any of this money into the states. Later, you decide to go to Thailand for a few months and access the funds from there. You return to the US with $0 in your pocket, no souvenirs, etc. Does this scenario violate any specific tax laws in the US if you're a US citizen? I can't imagine how it would, but I'm curious. Anyone here know? Hmm... tax form 5471 Last edited by tical; 03-17-2010 at 07:08 PM..

03-17-2010, 07:12 PM	#3
xxweekxx Confirmed User Join Date: Oct 2002 Posts: 6,780	ya there is a part of the tax form that asks u for foreign income.. if you have $50k in foreign bank, its still YOUR INCOME.. so you need to report it, or get raped in prison cheers __________________ _________________ I am the best

03-17-2010, 07:24 PM	#5
pornguy Too lazy to set a custom title Industry Role: Join Date: Mar 2003 Location: Homeless Posts: 62,911	Yes you have to pay. but only after making 80k plus __________________ PornGuy skype me pornguy_epic AmateurDough The Hottes Shemales online! TChicks.com \| Angeles Cid \| Mariana Cordoba \| MAILERS WELCOME!

03-18-2010, 06:01 AM	#8
SkeetSkeet Confirmed User Join Date: Oct 2005 Location: StarlightBucks ! Posts: 5,404	Income from Abroad is Taxable Many United States (U.S.) citizens and resident aliens receive income from foreign sources. There have been recent reports about the interest of the Internal Revenue Service (IRS) in taxpayers with accounts in Liechtenstein. The interest of the IRS, however, extends beyond accounts in Liechtenstein to accounts anywhere in the world. Consequently, the IRS reminds you to report your worldwide income on your U.S. tax return. If you are a U.S. citizen or resident alien, you must report income from all sources within and outside of the U.S. This is true whether or not you receive a Form W-2 Wage and Tax Statement, a Form 1099 (Information Return) or the foreign equivalents. See Publication 525, Taxable and Nontaxable Income for more information. Additionally, if you are a U.S. citizen or resident alien, the rules for filing income, estate and gift tax returns and for paying estimated tax are generally the same whether you are living in the U.S. or abroad. Hiding Income Offshore Not reporting income from foreign sources may be a crime. The IRS and its international partners are pursuing those who hide income or assets offshore to evade taxes. Specially trained IRS examiners focus on aggressive international tax planning, including the abusive use of entities and structures established in foreign jurisdictions. The goal is to ensure U.S. citizens and residents are accurately reporting their income and paying the correct tax. Foreign Financial Accounts In addition to reporting your worldwide income, you must also report on your U.S. tax return whether you have any foreign bank or investment accounts. The Bank Secrecy Act requires you to file a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), if: * You have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and * The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year. More information on foreign financial account reporting requirements is in News Release FS-2007-15, Foreign Financial Accounts Reporting Requirements and Publication 4261, Do You have a Foreign Financial Account? Consequences for Evading Taxes on Foreign Source Income You will face serious consequences if the IRS finds you have unreported income or undisclosed foreign financial accounts. These consequences can include not only the additional taxes, but also substantial penalties, interest, fines and even imprisonment. __________________ ICQ 283633188

03-17-2010, 07:11 PM	#2
xmas13 Confirmed User Join Date: Dec 2004 Location: GFY Posts: 5,176	Ask law students on relevant boards, also, Google is your friend.

03-17-2010, 07:13 PM	#4
xmas13 Confirmed User Join Date: Dec 2004 Location: GFY Posts: 5,176	You can also call the IRS. They've got live assistance monday through friday. Or contact your local IRS office to request an appointment.

03-18-2010, 04:52 AM	#6
iSpyCams Amateur Gynecologist Industry Role: Join Date: May 2009 Location: Medellin Posts: 4,436	I am not a lawyer, but this is what I understand and have filed a few times based on the following as was explained to me by my lawyers: I am pretty sure if it's the corporation's income it's not your income, until you pay yourself. You need to report any offshore bank account you can sign checks for that has over 10,000 in it to the IRS by tax day, there is no extension for this. Failing to report on time can lead to fines and jail time if the IRS ever finds out about your bank accounts. If you are either a legitimate resident (have a resident visa) of a foreign country or else spend less than 3 weeks of the tax year on US soil, and if your income comes from outside the US and is less than 80k, then you can claim an exemption on it when you file and pay zero income tax on it. This applies to salary only, not dividends or capital gains.

03-18-2010, 05:11 PM	#10
iSpyCams Amateur Gynecologist Industry Role: Join Date: May 2009 Location: Medellin Posts: 4,436	The 80k thing is income tax, don't confuse it with the 10k limit on offshore accounts that need to be reported. The idea is that if you are living abroad you are likely paying income tax to a foreign country, so those living abroad can claim an exemption on the first 80k they make each year. After 80k you pay taxes, used to be just on the difference, but I heard it was recently changed to the full amount if you make over 80k.