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Comment by avinashv | Hacker News Reader

You've essentially set up a dummy corporation to shuttle money outside the United States to avoid paying US tax. Not only that, but I read in the comments that the friend who you've set up as a director is also not in the States?

You should contact a United States accountant and tax lawyer immediately and talk to them. I'd avoid email, and instead stick to using the telephone. You're not entirely up shit creek--many countries have taxation treaties with the United States that lessen the burden to those who have to pay double tax, though I doubt it applies in your situation.

I should also mention that your friend is, from what I can see, liable for you.

I am not a lawyer. Please, seek professional advice!

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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 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.

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.

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.

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