i'm having dejavu... except .. the $20 each was on US webmasters!!!

now we constantly have people updating their pay to info to some foreign entity.. and then wonder why we have to hold payment b/c their old tax id gets kicked back by the irs... for a no longer working tax id... I think there are lots of people getting bad tax advice from friends and boards.. not realizing that just moving their company offshore.. does not let them not pay US taxes.. ifthey still live here...

LOL yeah I'm not sure where everyone got this idea that you didn't have to pay taxes if you just created offshore corps everything would be fine and dandy, yeah, that works great if you MOVE offshore and don't plan on coming back.

Actually there is a way for US companies to avoid taxes on foreign generated revenue from a subsidary corp registered in a foreign country, they still have to be reported but there is a structuring method that reduces them significantly though I doubt most making the move are doing it properly...

avoid? or defer???

That's correct...but if a sponsor is from out of the US and is paying you through an offshore bank, you are basically running a cash business, right?

So, like any other cash business, you need to report that cash you receive :) Kind of like tips if you are a waiter :) Or the guy down the street from me that I buy motorcycle parts from. For some reason, if I pay him cash, the price is cheaper and I get no receipt :) But I know he must be reporting that income ;)

It got much worse for me. My accountant contacted the IRS and assured them that we would be sending corrected 1099s. So again, I heard nothing from the IRS until it was too late. I paid the accountant for the new 1099s but they failed to send them to the IRS. The accountant said he did, the IRS said they never received them so...I was screwed twice.

Well neither really, you still pay taxes to your local authority, you're just not subject to US Corp taxes. I shouldn't have mentioned it, its off topic anyway. Also, its not an easy thing to do either. You have to have foriegn agents, and officers, and you'd still pay US taxes on dividends received which is how the revenue is paid out. Bottom line just pay your reasonable taxes. People scamming are just asking for trouble and in this ever increasing electronic world you're likely to get caught. Stick to the old rules... CASH IS KING |thumb

This is a fraud prevention measure and if it became an industry wide practice then it would benifit everyone long term.

If you can't prove you are who you say you are then something ain't right.

I could never understand why people got so upset by this. You want someone to pay you thousands of dollars, well, what is wrong with them verifying you are who you claim to be?

It still amazes me how many affiliate companies out there still file 1099s in violation of the IRS rules when they are paying a corporation instead of a person - and either just havent been audited yet or are just waiting for that needless filing fine thats gonna get levied on them. Sure seems like a waste of money and time to me