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  1. #11
    hello world Array Harold Mansfield's Avatar
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    Quote Originally Posted by remozseo View Post

    @Harold:
    True. You don't have to be citizen of the US in order to qualify for paying taxes. In fact, you could live in the US as an illegal immigrant - but you still have to pay taxes to the IRS. The IRS doesn't really care about citizenship, permanent residency or even temporary residency, and the IRS doesn't care about your VISA status. I totally agree on that.

    There is no situation where you live legally in the United States, have income from outside the United States, and pay no taxes. None.
    Correct. But again... I mentioned it earlier.. I DO NOT HAVE ANY INCOME from outside the US. Because the foreign company I own, doesn't pay me a single dollar. lol;

    Again.. my personal situation would be super simple. I work and live in the US as an employee from a company, that I don't own. It's just a company that hires me as a full time employee. Doesn't matter if it's Target, Best Buy or McDonalds. I am just employed, and pay my annual taxes from the income I receive within the US. That's it. But yes.. I currently live and work in the US as an employee.

    But at the same time.. I can build up wealth by OWNING a FOREIGN COMPANY. And again.. that foreign company is not paying me at all. No income, no employment, no dividends.
    Maybe.. it will pay me something in 20 or 30 years... for retirement... a small amount.. but that's it.
    Dude, it's not going to work.

    First of all, what is your reason for even getting citizenship? You're going to say that you work for a company that doesn't do any business inside the United States, isn't located in the United States..and that you work for them, but for no income? So why should you be approved for citizenship? From everything you're trying to float you are contributing nothing, don't have a needed skill, don't have a sponsor, don't have a job with an American company, and since you have no income will end up on welfare.

    The crazy part is that you think they've never heard anyone try to come up with some crazy idea to avoid paying taxes. Honestly, they'll probably deport you, AND alert law and tax enforcement where you actually have residence to see if you're trying to pull a fast one there....just for insulting their intelligence.

    I'm just being honest. You haven't discovered some loophole or scheme and trying to will probably land you in trouble eventually.

    Instead of trying to avoid paying taxes for a fictitious company that doesn't exist, how about just starting an honest company and making enough money so that taxes isn't this horrible burden you're making it out to be?
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    I'm going to bow out of this thread. I double checked the OP's earlier posts and most of his threads end up going the same way.

    I'm still curious though - what business, exactly, is the OP engaged in?
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  3. #13
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    Quote Originally Posted by remozseo View Post
    I wonder, if this is just a BLACK OUT of my thoughts... a SYSTEM ERROR, or a MODEL that is totally fine and shouldn't run into any tax issues.

    Description:

    I wonder why so many small business entrepreneurs are so worried about paying taxes on their private income.
    I wonder, why you don't want to keep all your money within the company, pay everything from the money of your company, live and benefit from the wealth of the company and DO NOT pay any profit to yourself.

    I REPEAT... what if you DO NOT PAY any profit to yourself ? Not through employment, and not through dividends. Not one single Dollar that is going to be transferred to your private bank account. NOT ONE SINGLE DOLLAR that is going to be payed into your private pocket.
    Depending on the legal entity you're operating, it doesn't matter whether you don't pay yourself as all profits pass through to you anyways for a personal level of taxation. Let's assume you don't, there is a corporate level of tax that would be imposed.

    You also cannot pay for personal expenses under the business. People would argue what is the purpose of the legal entity -- what is it's profit motive? If it doesn't have one, it can be viewed as an abusive tax scheme.

    If you're planning to operate in the United States, you must have some legal status in the country meaning you need to be incorporated in one of the fifty states. And if you have a profit motive you also are doing business in at least one of the fifty states and would owe personal and business taxes (likely) to that state.

    Let me try to explain MY MODEL in more detail.

    EXAMPLE / FACTS:
    - you own a company as a shareholder (sole 100% is yours)
    - the company (C/Corp Structure Inc.) is based in a country that has 0% taxes on corporation taxes
    - the company itself renders no service in the US and has zero links to the US
    - the company DOES NOT PAY the shareholder any dividends
    - the company DOES NOT PAY the owner any paystubs (not employed)

    NOW... let's take a minute and think about that setup. Nothing special, just a regular 100% LEGAL setup of a company structure, that creates profit outside the US.
    Even if you have a foreign entity in a country with a 0% tax on corporate profits, you still need to be incorporated in the United States in one of the fifty states. You WILL pay taxes to at least one state where you're operating.

    If it renders no services and has zero links to the US, it wouldn't have shareholders based in the US, based in a state, and having "activities" that would generate any revenue. So how would there be any money flowing into this? There wouldn't.

    Your Questions:
    - how can you pay for all your private expenses if you don't have any income ?
    - how can you cover all your private costs of living if you don't get any dividends payed ?

    My answer/idea and thoughts and facts:
    - The company is incorporated outside the US
    - all service is rendered outside the US
    - all profit is made outside the US
    - a tax report is not even necessary and not mandatory since it's based in a country that has zero % on corporate pofits
    You can't. There are laws that specifically prohibit this. You haven't explained how the company is incorporated and operating outside the United States. And regardless, US Citizens are taxed on WORLDWIDE income. Doesn't matter whether you earn it in Georgia, USA, or the country of Georgia.

    The OWNER of the company can invest in estates he likes. He can buy what ever he want's to buy in the name of the Corporation.
    In fact, he could blow all the money on a big party without reporting to any government or tax departments explaining losses or profits.

    The Corporation can buy Real Estate in the name of the company.
    The Company can also wire money for rent through online banking, can cut checks and can even have a debit or credit card to buy what ever the corporation want's to buy.

    NOW.... knowing that fact... and yes, there is ABSOLUTELY NO LAW in the world, that doesn't allow a company to own what ever the company want's to own... WHY NOT KEEPING ALL THE WEALTH WITHIN THE COMPANY ?
    You really lack a great understanding of businesses I can tell from the depth of the "scheme" yet lack of understanding reality. Everything you mention is theoretical and not practical. Yes, corporations can own most things it wants but if there is PERSONAL benefit derived, it is personally taxable. You can't say there are no dividends or wages and that they won't be paid because it doesn't matter that YOU don't want it to be paid, laws say you need to be paid a reasonable wage.

    Additionally, taxes and insurance for items held by corporations are generally significantly higher than if it was held for personal use.

    If I am living in a house that is owned by the company.... so be it.
    If the company pays rent for an apartment I would live in... what's the problem ?
    The company takes care for your car payments, or even posses a car. The company can also pay for Food.. well, literally for everything.

    I know.. at this point.. I got immediately confronted with the argument that the IRS could see the rent payments, food payments, gas payments, or what ever payments the corporation is executing... as part of an INCOME - or hidden income.

    But again... why should the IRS even be interested in that, if you don't even have to report to the IRS ?
    Remember, the Corporation that pays or owns property in the US is a foreign Corporation.
    A few problems with this. First, the company paying your rent is implied income. Additionally, a foreign corporation has no jurisdiction to do anything in the United States until it registers with a state or the federal government. So there WILL be tax filings required.

    Overall, even if you were to attempt to create enough legal entities and agreements to somehow make this somewhat "legal", it'd be detected fairly easily.
    Small Business CPA
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    Quote Originally Posted by remozseo View Post
    Hmm.. well.. I am also not sure if my post was clear enough. You have to understand. I am not a US Citizen. I have officially absolutely nothing to do with the US. I just live and work here as an employee, for a complete different company. Yes, I am European. But also.. as mentioned before. If I would start a Corporation in Europe, and if I am not running it, I just own it... there is no law in the world that would say it's illegal to be owner of that company. And that foreign company doesn't make any business inside the US, it would NOT need to pay any taxes in the US.
    If you're not a US Citizen, not a US Permanent Resident, and have no association with the United States, why is the US being mentioned at all? If one LIVES in the United States, they are subject to our tax laws, regardless of whether they are here "legally" from an immigration perspective or not.

    And yes, I live and work in the US as an employee. And I pay my taxes for that position. But again.. my full time Employment has nothing to do with the ownership of a foreign company. And I don't receive any money from that foreign company. No paycheck, no dividends, not one single dollar is going to be transferred ever to my personal account in the US or outside the US.
    So instead of talking abstract, what is the nature of the foreign corporation? As long as you're living in the United States as a permanent resident, you are taxed on worldwide income. The bigger question is how is the corporation conducting any operations? Who is doing something for it? I sense that YOU and the United States is somehow involved.

    For example.. I lived over 30 years in Europe.. 10 years ago.. I started living in the US. And I bought in cash a home for $200k. That money was already taxed and earned outside the US. I also didn't repatriate that money to the US, because it was never subject of income in the US. And yes.. I was never taxed on it in the US - why should I have been taxed on it when it was already taxed in the foreign country, and I just simple wired money to a US Bank Account to buy the house in cash. It was beneficial for the US economy, a private Person got the money payed for his house. If I follow your comment.. you said that I would need to pay taxes on that money, because that money I earned outside of the US through employment (was already taxed) and was on my savings account.. would need to be taxed because it was moved to the US... sorry.. as you can see. This can't be correct.
    Yes, this is fine, you can bring foreign money you earned through work and buy a home in the United States. What does any of that have to do with a corporation which again would have a for profit motive?

    A foreign corporation is required to report an income on a 1099 form to the IRS of the US ? How can that be ? If I am not even receiving an income from the foreign company ? Not employed, no Dividends, no payments at all to my pocket. The foreign company doesn't do any business in the US. Doesn't generate sales, profits in the US. The foreign company has simple ABSOLUTELY NOTHING TO DO with the US. The only thing is, that I am owner of that foreign company - and I live currently in the US. But again.. I don't receive any income for the foreign company, nor any dividends, etc.
    If you have foreign investments, you are required to report that on your personal income tax return. And depending on how it is taxed internationally, you may have a tax obligation to the United States. Permanent residents are taxed on worldwide income. So if you're a 100% shareholder and the business earns X in a year, the IRS can require you to include X (converted to US dollars) on your individual tax return.

    By the way.. please keep in mind.. even if the company would be in the US, and you would only own that company, but not work for your own company... as long as the company doesn't pay out money through employment, through dividends, or anything like that.. how can you pay taxes on something that you never receive ?
    Very easy, it's included in your income and your taxed as if it was earned personally. Distributions aren't required.
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    Quote Originally Posted by remozseo View Post
    A foreign corporation is required to report an income on a 1099 form to the IRS of the US ? How can that be ? If I am not even receiving an income from the foreign company ? Not employed, no Dividends, no payments at all to my pocket.
    You have a misunderstanding of what income is. It does not have to be a employment check, or a dividend or any type of cash payment. The use of items, buildings and cars does count as income. If the company pays rent for the place that you live, that is income for you. If you are allowed to live in a property that the company owns free of charge, that is income for you. If the company provides you with a car to drive, even if they still retain ownership, that is income for you. Every thing that you stated that the company was providing you would be counted as your income. As such you are required to pay income taxes on the cash value of those items. For example, if they provided you with a car, you would be taxes at a rate of either $0.72 per mile or the monthly lease charge for a similar car. If they allowed you to live rent free in a house, you would be assessed an income that was equal to the rent of a similar property. Now, if you self report the income you probably can get by with slightly under-reporting the actual value. However, should they catch you, they will assess a value that is very, very much not in your favor. You will then need to prove that actual rate.

    What you are suggesting is not new by any means.
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  8. #16
    hello world Array Harold Mansfield's Avatar
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    Quote Originally Posted by nealrm View Post
    However, should they catch you, they will assess a value that is very, very much not in your favor. You will then need to prove that actual rate.
    This.

    And your punishment could include jail, or at the very least getting deported and banned from re-entry.

    Trying to be cleaver, beat the system and cheat the America people out of taxes is far more work and risk than just doing the right thing and being a respected upstanding citizen. Why not just do it the right way?
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  10. #17
    Member With Stressed Keyboard Array PZagotti@ZnBcpa.com's Avatar
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    Hi there,
    Based on your original explanation of the plan it seems that , (as Ray has pointed out) that the corporation in a foreign country would be paying for your living expense, (food, car, rent, etc.) here in the US. This could very easily create what us accountant call nexus or attorneys call jurisdiction over the corporate entity. If the connection is strong enough then the corporation could end up having filing requirements for both state and federal purposes.
    To put it another way, now you get to file a corporate tax return.
    The US is a wonderful country to file tax returns in because you have to disclose all your assets world wide.
    The IRS has agreements with other countries to share information between each other so that different countries can compare your US return to returns filed in other countries to see how much you really make / have.

    There is also a alter ego theory which could get me to the same basic place.

    Now let flip it, I am assuming that the corporation will take the expenses here in the US as company expenses for purposes of filing the foreign tax return?
    If that is true now you may have issues with foreign countries and the U.S. as you have now characterized the transactions two different ways in two countries.

    Alternatively if the foreign corporate entity characterizes the expenses as dividends then your have income that needs to be reported in some country and you will still have to at least report the income on your US return.

    Over all its a nice theory.
    The company that I am a partner in, (Zagotti & Burdette CPA, LLC) has a nice IRS defense / forensic practice.
    We make a lot of money off people with "nice theories".
    By the time you get through paying my fees to defend you in the IRS action and then have to pay the taxes everyone is telling you will be due, it will cost you a lot more then if you had just set it up correctly.
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    Just to point out that there is, as I understand it, a limited circumstance where a corporation can provide for your housing as an untaxed employee benefit, and that is where the employee is living onsite at the place of business as a necessary requirement of employment (i.e., part of their job function) and so long as the employee is not an owner or related to an owner if the corp is an s-corp....

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    Question Taxes

    @turboguy:
    appreciate your info.. but let me try to ask you a more specific question to bring more clarity into that chapter.

    question a)
    If a company outside the US owns a property inside the US - and the landlord is granting you to live FREE inside that house. Why should the person, that lives for free in that house pay any income taxes ? And if he should pay income taxes, based on what income should he be taxed ?

    He does NOT receive any money. He just lives for free in the house, because the owner of the house granted this person to stay with no costs. Interesting situation, right ?

    Now... let's take that same example for the use of a car or nay other items.


    @Harold:
    first comes first. I appreciate your input and participation on this topic. This is great. So thumbs up. Now second, let me try to answer your questions.

    a) what is my reason for even getting citizenship ?
    None. I have no reason to get citizenship. I never asked for, I never mentioned that I want to become US-Citizen.

    b) you're going to say that you work for a company that doesn't do any business inside the United States, isn't located in the United States..and that you work for them, but for no income?

    WRONG. So let me correct that.

    I am going to say, that...

    1) I do NOT work for that company - I own it
    2) that doesn't do any business inside the United States
    3) isn't located in the United States
    4) and that I DO NOT work for them
    5) and because I don not work for them, yes I have no income from them

    Please see the significant difference. I guess you thought I work for a foreign company. But nope. I don't work for a foreign company. I just own a foreign company, that doesn't pay me anything. I am not hired at that foreign company, I am not running it. And because of that fact, I don't receive any income or any other payments from that foreign company.

    Yes, if that company would pay me money, and I am living in the US, of course I would pay taxes on it. To be specific Personal Income taxes - no doubt.


    c) So why should you be approved for citizenship ?
    Again Harold. I was never asking for any citizenship. But even if I would apply for. It has no effect on the tax law of the US if you are citizen, or non citizen. The tax law is for all who lives and works in the US the same. No matter if you are citizen, or non citizen.

    d) Just more info to clarify
    I work for a European Corporation in the US that hired mainly Americans. In fact, the Corporation is an american corporation, because it was incorporated in the US. But yes, the shareholders are from Europe. I am just one employee of over 50. 95% of the staff are US citizens. But this is just a side note, that hopefully makes more sense for you.

    I think in general things are getting mixed up here. So let me clarify the situation.

    About me:
    - Permanent Resident of the US
    - NONE US-Citizen
    - European and member of the EU
    - works and lives like Millions of Americans in the US as a full-time employee
    - the company I am working for doesn't matter - it's just a regular job
    - the be more simplify - let's say I work at Wallmart as a cashier
    - I get my annual salary, and I pay may taxes
    - that's it
    - besides that job, I am thinking of owning/starting a corporation outside the US
    - which does NOT mean, I work for that coporation
    - and so... I don't get anything payed from that corporation
    - I also don't receive any dividends
    - additional income is sub zero

    And I appreciate the fact that you care and participate with your honest opinion on my post. I think that's great and I would love to hear more from anyone. I am not shy, and I want to discuss things open and honest. Unfortunately, many times questions and situations are misunderstood.

    But with patience, clear communication and respect, we'll overcome that easy.

    On the other side. I don't try to find any illegal loophole on avoiding paying taxes. In fact, I am always playing by the rules. And all I am doing here as well, is laying out the rules first. The foundation, and trying to have an open discussion about a simple situation.

    A situation I pointed out at the very beginning.

    What if you have a full time job within the US, but you OWN a foreign company ?
    And owning, does NOT mean you work for that company, or you are getting payed for that company. Let's face it. This is 100% legal.


    e) how about just starting an honest company and making enough money so that taxes isn't this horrible burden you're making it out to be?

    Fact is, I am not a big fan of high taxes. Another fact is. No one is. That doesn't mean I don't play by the rules. The world is changing. If you travel a lot, like I did in the last 10 years, you think a lot where you want to own a company.

    Imagine.. you have a business idea. But you don't want to run the company. And you don't want to work for that company. But you want to OWN it. You want to fund it. What can you do ?

    Imagine, you have savings. Personal Savings. Money that was already taxed. Imagine, you have, just for example $100k in your savings account. And instead of pumping that money into stocks, or real estate, or anything else... you decide to own a company.

    That means, you form a company. You are only the shareholder, the one and only owner. With the incorporation you have a team. A team that is working for that company. A CEO, some managers, and of course employees.

    Now.. the business I want to invest.. can be done anywhere on this planet. Because it's an online business. Thinking this through... it makes sense to choose a country with the most tax benefits for that corporation.

    Since the US is very high on corporate taxes, it would be a higher risk to invest my money in forming a corporation within the US. Besides the fact, that the cost of running that company
    would be significantly higher as for instance Costa Rica, Malaysia, Nicaragua, etc. what ever other country.

    Now... that corporation outside the US... is his own entity. It will be taxed where ever it will be incorporated. And if the corporation makes profit... it can keep the profit for years inside the corporation. The corporation doesn't have to pay dividends, the corporation doesn't have to pay me at all. In fact, that corporation can create wealth and profit for the next 30 years, it can can have Millions on his bank account.

    As long as I don't receive money from that corporation, as long as I don't work for that corporation, I don't need to pay personal income taxes on it. This is everywhere the case, not just US Tax law.

    Now.. imagine.. lot's of people invest money into stocks for their retirement. But I don't prefer that. I rather invest my money, my savings, that was already taxed into my own corporation.

    A corporation, I just own and can be founded anywhere on this planet. Again... my question was... if I would do that. If I would start a corporation like that outside the US.. and the corporation as it's own entity is growing... why should there be anything illegal ?

    And why should I pay any income taxes within the US if I am not receiving NOW any income. Yes, maybe in 20 years. The Corporation will hopefully pay me a big fat check monthly for retirement. And where ever I'll live... then I'll pay for that personal income taxes.



    @Fulcrum:
    I also appreciate your input. And no worries.. So far everyone was super polite and I appreciate it, if everyone writes their honest opinions and thoughts.

    To answer your question:
    I'm still curious though - what business, exactly, is the OP engaged in?

    It's an online business that does NOT require any specific local position. And it's an online business I do have already a lot of experience.
    Last edited by remozseo; 09-21-2016 at 02:53 PM.

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    Question more taxes

    @Evan:
    You put some interesting thoughts and questions into that topic. Let me try to answer your questions.

    a) you cannot pay for personal expenses under the business
    Let's try an example. The Corporation as it's own entity can buy what ever that company want's to buy. There is actually no law in place, that forbids any company to buy anything they want to buy. Homes, Cars, etc.

    This is a fact. Now, let's imagine.. a foreign corporation (outside of the US) just owns Real Estate in the US. And that foreign Corporation grants you to live free or for a minimal monthly rent/fee in their property.

    Why should the private person, living in that house to be taxed .. on what ?

    I can give you another example.. that actually happened.
    And I guess that's the best example to understand what I am talking about.

    ME, as a private Person.. I bought about 10 years ago my private house in cash. I bought it from my savings, and earnings, that was of course all taxed before. But again, that money was not taxed in the US. Nope, it was taxed in Europe, since I am from Europe.

    Whatever, that doesn't really matter. Soooo.. I bought the house.. and after a couple years, I moved. The house was empty for a short period of time. And then.. guess what.. a family I knew from church needed help.

    They had some financial issues.. and I said.. look.. I don't need the house, it's standing there empty. You know what, here are the keys and feel free to move in with your family and live there for free.

    Boom.

    Now... based on all the messages I received, including you, you say.. that the Family Father, which I granted to live free in my house, should have been paying taxes. Because I granted him to live for free in my house ? And if he should pay taxes, can you please explain me, based on what the family father should have been paying taxes ?

    Now.. take this example.. and imagine.. instead of ME as a private person owning the house.. my Corporation is owning it. Daaa ? The rent, that was not payed, because there was no Landlord collecting the rent.. that would you classify as a personal expense ?


    b) what's the profit motive ?
    If you incorporate a company in a country that doesn't have any corporate tax - it doesn't matter, because the government doesn't collect any money from the corporation. You don't even need to file a ax return. It's called the liberty of freedom, which got lost in the US. And people in the US are so used to the tax-slavery that they can't even imagine anymore.. that you don't have to fiel a tax return, or that you don't have to pay any taxes at all. I do understand that fact, growing up in the US, living and working here.. and that's what it always was... it's hard to even get a solid ground for fruitful discussion.



    c) If you're planning to operate in the United States
    correct... this is all clear if I would plan to incorporate in the US.. but that's not the plan at all. That's why I laid out the plan upfront.. FOREIGN COORPORATION


    d) If it renders no services and has zero links to the US, it wouldn't have shareholders based in the US

    That's a very good point.. and yes.. that's the the one and only link. That's why I also mentioned the IRS, and the fact that I live and work inside the US, as an employee for a different company. However, are you saying... just because the SHAREHOLDER of a foreign corporation lives in the US, he is going to be taxed on........ on what ? I can be shareholder, but that doesn't mean I am earning any money.

    Can you please explain what you are trying to say here in more detail ?


    e) You can't. There are laws that specifically prohibit this.
    Well.. yes.. you can form a corporation outside the US. I don't know what law you are referring to that prohibits anyone to start a company outside of the US ???


    f) You haven't explained how the company is incorporated and operating outside the United States.

    - it's a Corporation outside the US
    - what specific details are you asking for you would like to know ?


    g) And regardless, US Citizens are taxed on WORLDWIDE income. Doesn't matter whether you earn it in Georgia, USA, or the country of Georgia.
    - correct - but I am not a US Citizen.


    h) Yes, corporations can own most things it wants but if there is PERSONAL benefit derived, it is personally taxable.
    Right. However, how would that apply if the corporation owns property you can live in ? See example I gave earlier above....

    i) You can't say there are no dividends or wages and that they won't be paid because it doesn't matter that YOU don't want it to be paid, laws say you need to be paid a reasonable wage.

    - can you refer me to the US law that forces the owner and shareholder to pay dividends, or wages for himself ?
    - can you refer me to a law anywhere outside of the US that forces shareholders and owners of a corporation to be paid ? Estonia, Guernsey, Isle of Man, Jersey, Sark, Dubai, Malaysia, United Arab Emirates, BVI, etc. etc. etc.


    j) Additionally, taxes and insurance for items held by corporations are generally significantly higher than if it was held for personal use.
    Correct. Also applies to the US - but doesn't really matter.

    k) a foreign corporation has no jurisdiction to do anything in the United States until it registers with a state or the federal government. So there WILL be tax filings required.
    This is a fantastic point. Soooo.. you are saying.. a foreign Corporation can not buy any property in the US ?

    ME, as a private person.. I was able to buy a property 10 years ago in the US. I owned a company before back in Europe. You are saying, my company would not be able to buy anything in the US ?

    I heard a lot, but that's totally new to me. I can imagine, that you have to register a foreign company in the US to register because you want to render services and do business in the US. But not, if the foreign corporation just want's to buy something.

    If a private house owner sells his house. He can sell it to a private person, or to a foreign corporation. He get's the check, and if the Corporation buys the house, the name of the corporation is on the deed. If a private person buys it, the private persons name is on the deed.

    Sooo... please explain why a foreign company couldn't buy anything without being anywhere in the US registered ? Just don't want to mix up things.


    l) If you're not a US Citizen, not a US Permanent Resident, and have no association with the United States, why is the US being mentioned at all? If one LIVES in the United States, they are subject to our tax laws, regardless of whether they are here "legally" from an immigration perspective or not.

    This is correct. The US is mentioned, because I am a permanent resident for now. And I work and live in the US as a full time employee. So yes, this is true. Because of the fact that I am a permanent resident, I am ubject to the tax law of the US. For all my personal income of course.

    But the Corporation I would own outside the US, is subject to the tax laws in that specific country. For example, If I am starting a business in France, I incorporate that Business in France, I hire people in France, they get payed salary in France, ... all that money will be taxed in France.

    I could not work in France.. it would be impossible and also very clear to see for the IRS in the US. Because I do work for a different company FULL TIME in the US. My income I receive from the Full Time Job in the US does count as personal income and will be taxed under the US law.

    If I would get payed from the FRANCE Corporation, I would also get taxed based on the personal income tax law of the US, because I live and work in the US.

    But if I am not getting payed anything from the FRANCE CORPORATION... what can the IRS tax me for ?


    m) So instead of talking abstract, what is the nature of the foreign corporation?
    The nature of the foreign Corporation I am thinking to start is an online business. In fact, my target audience would be in 4 specific countries in Europe.


    n) As long as you're living in the United States as a permanent resident, you are taxed on worldwide income.
    Correct. Absolutely correct. And because I work and live here at this point, any income I would receive from any other source would be taxed under the personal tax income law of the US.


    o) The bigger question is how is the corporation conducting any operations?
    It's all online, it's not territory to one country. In fact, there is no geographical local operations needed.


    p) Who is doing something for it?
    The people who will be hired to run the business. A small team/staff. CEO, President and a few employees.


    q) I sense that YOU and the United States is somehow involved.
    My involvement: Shareholder / Owner only
    I don't want to be employed, I don't want to be paid through employment, or dividends, as long as I live in the US.

    The purpose is clear. I want to invest money into my own pension plan. And my own pension plan is for me just better, investing my money into a corporation I own. Better than stocks. Much better than anything else... well.. at least for me.


    r) Very easy, it's included in your income and your taxed as if it was earned personally. Distributions aren't required.
    But a Corporation is no Pass Through Taxation. An LLC. yes.. because an LLC has a pass through.. but not a C-Corp for example.. (S-Corp yes otherwise, and just to be clear)

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