Hello,
thank you for your reply. What do you mean by "shuttle money outside united states"? There'a license agreement between me and the company - where the company pays for the right to redistribute the software. This can't be legal?
I think avinashv is trying to give you perspective on how it might look to the IRS in the worst case scenario, not suggesting that there's no way such an arrangement could be legal.
This. Not my finest wording, but as an unbiased observer, that is how it looks. And you can be sure that if the IRS is going to be biased, it sure as hell isn't going to be in your favor.
I can't say for sure what the GP post was thinking, but consider this: you set up a US corporation that had income of $100,000 and was controlled by you (as you state, you wired the money out whenever you wished). Hence shuttling money. You are asking how to avoid paying US taxes on this, but it seems that either the corporation or your person would owe US taxes. I am not an accountant or lawyer or owner of a multinational corporation. Best of luck.
To reply to your question about legality directly: I don't think the arrangement as such is illegal [1], rather, the fact that the corporation hasn't paid taxes on it's income is what the problem is.
I'll give you my gut feeling here (and please take it as just that--instinct. You really must see a professional expert on this matter): I think you're OK. You'll probably fly under the radar, and I don't think there is enough money here to justify a huge investigation. Your likely worst case scenario is a bill for back taxes with some interest.
[1] I am not a lawyer, accountant or tax expert!
[edit]: Oh, and good luck! As a non-US citizen who has had to deal with the US tax system, I'll vouch for how easy it is to make a mistake.
Thank you for your time - I really appreciate it. The problem is that the friend is not in the US either. I hope someone who reads this will know something from their own experience. But I know I need to find the accountant.
Again, thank you so much for your reply.
Thank you for your reply. I know but it will take me a while because there are no accountants here who would know about handling of US corporation. And I have no idea how to get in touch with someone who might know..
In the meantime I would like to know what more people think. Thank you all - I appreciate this so much..
Maybe if you told us what country you're in, other HNers from that country might be able to recommend accountants - there must be other small-to-medium sized companies in your country that at least export to the US. That said, maybe someone here could recommend a US-based accountant who would be willing to sort this out for you.
I don't know whether you have this where you are, but most European countries have government-sponsored bureaus for supporting businesses. They might be able to help directly or refer you to someone (presumably an accountant) who can.
Finally, have you actually asked your/an accountant? They may not be able to answer your questions directly, but there's a good chance they'd know someone who can.
