Re: Why I Pay Too Much in Taxes

Timothy C. May wrote:
>Indeed, I am extremely limited in how I can avoid complete traceability of
>my major income sources. Not rich enough to shelter income in a really big
>time way

That's just lack of creativity. Try this:

Get a friend of yours to setup a consulting company and
hire you (and maybe a few more people who pay too much
taxes,acting like a mixmaster). The company pays you salary
to cover your cost of living. Anything above that, i.e.
money that you would otherwise save, is paid to an offshore
company as license fees (or something, this is the creative
part).

This is really legal as long as you don't receive any money
from offshore without paying the taxes. If you borrow the
money back it gets a little fuzzy.

Thousands of people in upper middle class are doing exactly
this, so the mixmaster is really in place already. The local
mix is just an extra precaution for deniability (it was my
friends company, I had no idea what he was up to!).

For the friend to accept the (very minor) risk of jail,
he/she should probably be much poorer than you, or have
a *lot* of clients, to make his pay outweight the risk.

By the way, are there any PGP encrypted mailing lists for
discussing serious tax fraud?

Mr.X

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On Wed, 8 May 1996, Anonymous wrote:

> Timothy C. May wrote:
> >Indeed, I am extremely limited in how I can avoid complete traceability of
> >my major income sources. Not rich enough to shelter income in a really big
> >time way
> 
> That's just lack of creativity. Try this:
> 
> Get a friend of yours to setup a consulting company and
> hire you (and maybe a few more people who pay too much
> taxes,acting like a mixmaster). The company pays you salary
> to cover your cost of living. Anything above that, i.e.
> money that you would otherwise save, is paid to an offshore
> company as license fees (or something, this is the creative
> part).

Where does the company get the funds to pay you?

As the source of personal services income is the site of the preformance
of services, your salary will be taxible at U.S. rates.  Licensing fees
hoarded into an offshore holding company will be taxed yearly regardless
of their distribution as dividens (if the money is invested as equity)
and the principal taxed on repayment if characterized as debt.  It will
not, of course be legally yours if deposited without either
classification.

> This is really legal as long as you don't receive any money
> from offshore without paying the taxes. If you borrow the
> money back it gets a little fuzzy.

Except that it is going to cause your friend who set it up to incur the
penalities that surround classification of his company as a Foreign
Personal Holding Company.  If he is a U.S. citizen, he can deduct the
costs of sending you salary, but that means he still has to pay about 60%
of what goes out.  (Revisit the double taxation issue).

> Thousands of people in upper middle class are doing exactly
> this, so the mixmaster is really in place already. The local
> mix is just an extra precaution for deniability (it was my
> friends company, I had no idea what he was up to!).
> 
> For the friend to accept the (very minor) risk of jail,
> he/she should probably be much poorer than you, or have
> a *lot* of clients, to make his pay outweight the risk.

What pay?  I don't get it.  Where does this friend gets his money?

> By the way, are there any PGP encrypted mailing lists for
> discussing serious tax fraud?

If such a list existed, would we tell an anonymous poster/fed?

If your above scheme is intended merely to conceal funds it is a fairly
poor example as it depends on the secrecy of each and every 'employee' of
the company.

> 
> Mr.X
> 

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---
My preferred and soon to be permanent e-mail address:unicorn@schloss.li
"In fact, had Bancroft not existed,       potestas scientiae in usu est
Franklin might have had to invent him."    in nihilum nil posse reverti
00B9289C28DC0E55  E16D5378B81E1C96 - Finger for Current Key Information
Opp. Counsel: For all your expert testimony needs: jimbell@pacifier.com

>>>>> Black Unicorn <unicorn@schloss.li> writes:

    >> By the way, are there any PGP encrypted mailing lists for
    >> discussing serious tax fraud?

    > If such a list existed, would we tell an anonymous poster/fed?

Well, if such a list does exist, I would like to know about it.

-Robin

On Thu, 9 May 1996, Robin Powell wrote:

> >>>>> Black Unicorn <unicorn@schloss.li> writes:
> 
>     >> By the way, are there any PGP encrypted mailing lists for
>     >> discussing serious tax fraud?
> 
>     > If such a list existed, would we tell an anonymous poster/fed?
> 
> Well, if such a list does exist, I would like to know about it.
> 
> -Robin
> 

Again, in the absence of any credentials or recommendation, I can't see
how the moderators/originators/managers of such a list would disclose the
details of its publication.

---
My preferred and soon to be permanent e-mail address:unicorn@schloss.li
"In fact, had Bancroft not existed,       potestas scientiae in usu est
Franklin might have had to invent him."    in nihilum nil posse reverti
00B9289C28DC0E55  E16D5378B81E1C96 - Finger for Current Key Information
Opp. Counsel: For all your expert testimony needs: jimbell@pacifier.com

If it was a government sting operation the detials might be
easily found.  The kind of information we're discussing is clearly of
high value to a great many people in the 60% bracket.  Looking for it
for free...Well, you may get what you pay for.

	I think that there is a high amount of value in a high volume,
low overhead sort of tax avoidance operation.  Right now, moving money
overseas is expensive, and there is a high service fee.  Reducing the
up front costs that someone has to pay to get started is a market
opportunity.  As is producing accessible information about how to get
started.  While Unicorn may be correct in suggesting three or four
volumes of tax law to get started properly, thats like suggesting Bach
and Comer for someone who wants to get on the internet.  When it was
needed, there were far fewer people here.

	As to the obvious rejoinder of, 'as soon as its obvious, its
illegal,' if enough people start to do it, theres a large lobby for
keeping it legal.  And if the overhead is low, all of those people
have lots of money to spend keeping it legal and cheap.

Adam


Black Unicorn wrote:

| On Thu, 9 May 1996, Robin Powell wrote:
| 
| > >>>>> Black Unicorn <unicorn@schloss.li> writes:
| > 
| >     >> By the way, are there any PGP encrypted mailing lists for
| >     >> discussing serious tax fraud?
| > 
| >     > If such a list existed, would we tell an anonymous poster/fed?
| > 
| > Well, if such a list does exist, I would like to know about it.
| > 
| > -Robin
| > 
| 
| Again, in the absence of any credentials or recommendation, I can't see
| how the moderators/originators/managers of such a list would disclose the
| details of its publication.
| 
| ---
| My preferred and soon to be permanent e-mail address:unicorn@schloss.li
| "In fact, had Bancroft not existed,       potestas scientiae in usu est
| Franklin might have had to invent him."    in nihilum nil posse reverti
| 00B9289C28DC0E55  E16D5378B81E1C96 - Finger for Current Key Information
| Opp. Counsel: For all your expert testimony needs: jimbell@pacifier.com
| 


-- 
"It is seldom that liberty of any kind is lost all at once."
					               -Hume