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BS: Dodging Taxes - Advice

GUEST 30 Jan 04 - 11:32 AM
Rapparee 30 Jan 04 - 11:37 AM
Billy Weeks 30 Jan 04 - 11:44 AM
Thomas the Rhymer 30 Jan 04 - 12:41 PM
Bev and Jerry 30 Jan 04 - 02:47 PM
Bill D 30 Jan 04 - 03:49 PM
Peace 30 Jan 04 - 03:53 PM
GUEST,Butch 30 Jan 04 - 04:37 PM
Deckman 30 Jan 04 - 04:58 PM
GUEST 30 Jan 04 - 05:05 PM
GUEST,Martin Gibson 30 Jan 04 - 05:52 PM
Chief Chaos 30 Jan 04 - 06:10 PM
PoppaGator 30 Jan 04 - 06:13 PM
harvey andrews 30 Jan 04 - 06:21 PM
Liz the Squeak 30 Jan 04 - 07:21 PM
GUEST,another regular 'catter 30 Jan 04 - 07:21 PM
LadyJean 31 Jan 04 - 01:18 AM
Kaleea 31 Jan 04 - 02:29 AM
Maryrrf 31 Jan 04 - 11:35 AM
McGrath of Harlow 31 Jan 04 - 01:33 PM
Chief Chaos 31 Jan 04 - 11:50 PM
Stilly River Sage 31 Jan 04 - 11:57 PM
GUEST,Van 01 Feb 04 - 07:33 AM
Peg 01 Feb 04 - 10:51 AM
McGrath of Harlow 01 Feb 04 - 01:18 PM
Shanghaiceltic 01 Feb 04 - 11:33 PM
Bo Vandenberg 02 Feb 04 - 01:57 AM
McGrath of Harlow 02 Feb 04 - 09:04 AM
GUEST,Larry 02 Feb 04 - 09:24 AM
Chief Chaos 02 Feb 04 - 01:11 PM
McGrath of Harlow 02 Feb 04 - 05:11 PM
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Subject: BS: Dodging Taxes - Advice
From: GUEST
Date: 30 Jan 04 - 11:32 AM

I have to remain anonymous on this one but I admit that I conceal my extra music income from the IRS. I sell about 200 CD's a year at $15 a pop and I don't declare it. Sometimes people pay for the CD's with a check but most of the time it's cash. I regularly play at a pub a couple of times a month and they do pay by check but they don't have my social security number or anything so I know the arent' sending anything to the IRS. On an irregular basis I play at a few other places, some pay by check but most pay cash. All in all it probably amounts to about $3,000 - $4,000 a year. An accountant friend told me strictly off the record that it was highly unlikely I would get caught and if I did I could plead innocence and say music was my hobby and I didn't know I had to report anything, then write them a check for whatever I owe plus the penalties. Has anybody else had experience with this - gotten away with it or gotten caught? Any advice? I work a regular job and of course pay taxes but it burns me up that the IRS has to get its greedy hands into every private transaction in people's lives. Plus I don't want to support this war in Iraq any more than I have to. In addition to which that extra money is vital to me and I have nothing left over to pay taxes with - I'd have to take out a loan. I suppose they could get me if they went over my bank deposits with a fine toothed comb and made me explain every deposit, but I'm pretty small fry.


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Subject: RE: BS: Dodging Taxes - Advice
From: Rapparee
Date: 30 Jan 04 - 11:37 AM

Dodger, I'd suggest a "don't ask, don't tell" stance. There's a whole underground economy in the US that's doing what you do; the IRS knows about it and can't figure out what to do about it. And they're going to go after the big fish; it's what lawyers call "deep pockets" or "don't go after poor folks, 'cause that's where the money ain't."


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Subject: RE: BS: Dodging Taxes - Advice
From: Billy Weeks
Date: 30 Jan 04 - 11:44 AM

In all countries the tax collectors have the same philosophy. It's the small fry they go for, not the big guys who have weaselly lawyers and money-manipulators to stash their loot away in tax havens. I find your innocence touching, but the tax-gatherers won't.   If they catch you they'll fillet you.


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Subject: RE: BS: Dodging Taxes - Advice
From: Thomas the Rhymer
Date: 30 Jan 04 - 12:41 PM

Do the math... if it is a business, treat it like one on paper... you probably don't make enough to cause all this ruckus... Good Luck! ttr


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Subject: RE: BS: Dodging Taxes - Advice
From: Bev and Jerry
Date: 30 Jan 04 - 02:47 PM

All of this income should be reported on Schedule C of form 1040 along with all of your business expenses which basically include anything you spent to get that income. With a little imagination, you can easily make the expenses nearly equal to the income so that almost no tax is due and you're still within the law.

If you are caught with undeclared income, no excuse will do. On the other hand, if you're caught with deductions you're not entitled to, almost any excuse will do.

Bev and Jerry


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Subject: RE: BS: Dodging Taxes - Advice
From: Bill D
Date: 30 Jan 04 - 03:49 PM

easiest answer...declare checks, 'forget' cash transactions. If there is ANY reason to audit you, the checks will be asked about.

However, you might be asked to account for CD volume if they are commercially made..if YOU produce them, who's to know?


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Subject: RE: BS: Dodging Taxes - Advice
From: Peace
Date: 30 Jan 04 - 03:53 PM

Don't get caught.


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Subject: RE: BS: Dodging Taxes - Advice
From: GUEST,Butch
Date: 30 Jan 04 - 04:37 PM

I don't mean to be a jerk, but why am I honest and tryng to pay my fair share whenyou are not? War or no war, do you drive on roads, cross bridges, visit parks, use medicine, eat food and use a tiolet? If so, then declare it leagally and pay your fair share like most of the rest of us. If you really do it as a buisness then take the leagal deductions and you may not have to pay anyway. If not then good for you, if you owe please pay!


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Subject: RE: BS: Dodging Taxes - Advice
From: Deckman
Date: 30 Jan 04 - 04:58 PM

Boy of Boy! What a "hot button" issue this thread is going to be! I predict that this one will set a new land speed world record. Bob


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Subject: RE: BS: Dodging Taxes - Advice
From: GUEST
Date: 30 Jan 04 - 05:05 PM

If you are a Democrat, you will account for all income and pay taxes accordingly.

If you are a Republican, you will do exactly as you are doing.


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Subject: RE: BS: Dodging Taxes - Advice
From: GUEST,Martin Gibson
Date: 30 Jan 04 - 05:52 PM

Odds are he is not a Republican folksinger...........

Pay your taxes like a good citizen!


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Subject: RE: BS: Dodging Taxes - Advice
From: Chief Chaos
Date: 30 Jan 04 - 06:10 PM

Sigh....
As one who makes his living in a Gov't position...
Please pay your taxes! Okay, so you don't want to support the war. Even if you have no direct link to anyone over there, I urge you to look at your position again. For want of a nail the shoe was lost and all that. The war is going to go on as long as the present administration is in office. With or without your tax money. They used to wring their hands and cry in disgust about the tax and spend democrats. I've got news for you. You're seeing the don't tax and spend anyway republicans. This war gives power, it provides cover for many military upgrades which are unfortunately far overdue (they balance the budget on the backs of the military, not through purchasing programs but by cutting back on programs that effect the military personnel and their families. For most of the last couple of decades the military people have been getting raises that were .5% behind cost of living. At one point we were approx. 13% behind cost of living. The purchase of weaponry and the advancement of military sciences will always continue.

Your only hurting those that really need it most, not the war or its supporters.


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Subject: RE: BS: Dodging Taxes - Advice
From: PoppaGator
Date: 30 Jan 04 - 06:13 PM

If you had no other, more conventional, source of income (i.e, no day job where taxes are witheld from your paycheck), you'd have to report your music income very carefully. After all, you have to be making money somehow, right? The IRS can be tough on those who are exclusively self-employed.

Your situation is quite different. Since you are holding down a regular job, you could almost undoubtedly continue earning "under the table" at your second, part-time job. Of course, there are no guarantees; if it makes you feel more secure, you should declare some if not all of your income.

Of course, at the same time, you can and should declare absolutely every expediture that you can claim as business-related -- don't forget your travel/commuting expenses, as well as advertising/promotion, depreciation on your "tools" (instruments), production of CDs, etc. It should be *easy* to show a minimal net profit that wouldn't cost you any additional tax liability.

In fact, you ought to be able to show a loss, and therefore *reduce* your tax bill from what it would be based on your day-job income alone. The IRS will look askance at too many *consecutive* years of losses, but one or two years of negative income -- especially the first year or two of a "new" (or newly revealed) business -- is quite common and readily acceptable.

I'd advise you to invest $30 or so in a copy or TurboTax. The regular (cheapest) edition includes everything you need for every possible tax situation, including Schedule C and all the other forms used for small-business ownership. The extra features of the higher-priced "home business" versions consist of "advice," not 1040-related features.

Using an automated tax-calcuation program like this helps by:
- eliminating arithmetic errors that would draw attention to your return;
- automatically choosing forms and strategies that you wouldn't know about yourself -- not only more cheaply than a accountant, but more reliably, too;
- detecting any "red flags" that would cause the IRS to scrutinize your case; and most importantly;
- allowing you to try different combinations of figures and viewing the results before finalizing your return, easily enabling "creative writing."

I wouldn't worry too much about harrassment from the IRS if you start filing returns that include *plausible* data on your music income (e.g., declaring your checks but not every penny of your cash tips). While it's true that small-time tax cheats are more easily caught than huge corporate entities (who avoid taxes legally by purchasing politicians), an intelligent person can fudge a bit and fly under the radar, as long as you're not too greedy or too stupid. A computer program like TurboTax will prevent you from sending in anything stupid; it's up to you to be reasonable about whether, and how far, you'll stretch the truth.

And really, if you explore every possible legitimate business expense, you'll probably be surprised to learn how very little *net* money you are actually earning -- even if you file a completely non-fictional Form 1040.

Of course, you're going out evenings and weekends and having fun at no cost -- that may be a benefit, but is *not* a quantitative cash income you have to declare. Even though you seem to be getting paid for your playing, the truth is that, once you deduct every allowable expense, you're very likely only breaking even, give or take a couple of bucks.

It might seem chintzy to claim 5 or 10 percent of your total automobile expenses (loan payments, repairs, gas, tolls, etc.), and it might seem anal-retentive to save the receipt every time you buy a set of strings or a couple of picks, but if you're going to play by the taxman's rules, you might as well take advantage of the rules that can help you. Plus which, tracking every possible expense shows *you* just how minimally profitable your "paying hobby" truly is.

You are doing it mostly because you love it, right? You're obviously not making "real" money at your musicianship, or else you wouldn't still be showing up every weekday morning at that other, real, job. Therefore, you shouldn't have to pay "real" substantial taxes, either. I think that, with a little effort and some computerized assistance, you can minimize that tax bill, even if you are complete (or nearly) forthcoming about your income.


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Subject: RE: BS: Dodging Taxes - Advice
From: harvey andrews
Date: 30 Jan 04 - 06:21 PM

Advice....don't dodge.
I know those that tried.
And failed.
It's good to have a clear conscience.


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Subject: RE: BS: Dodging Taxes - Advice
From: Liz the Squeak
Date: 30 Jan 04 - 07:21 PM

Good advice there from Harvey. Another bit would be - don't post your intentions on a public forum. This just makes us who work for various governments, interested in ALL who follow your vocation, and so investigate everyone. You may not get caught, but some other poor sap will.

It doesn't matter where you live or what you declare or not, we WILL get you in the end. You can avoid everything except death and taxes.


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Subject: RE: BS: Dodging Taxes - Advice
From: GUEST,another regular 'catter
Date: 30 Jan 04 - 07:21 PM

I was a freelance writer for several years. When it was a side job and I was paying taxes through a regular job, no problem, the income from writing wasn't so much that my deductions weren't sufficient. When it was my only job then I had to estimate my income ahead quarterly and pay ahead. What a pain. But as has been noted above, if you call yourself a business then you can begin taking deductions for things that cost you money for your music business. Some things can be amortized, others paid for all in one year. Don't lose money every year, or they'll tell you it's a hobby, not a business. Break even or make a small profit every now and then. Keep all of your receipts.

If you're planning to continue to work off of the books, then use the cash for inconspicuous purchases and destroy the receipts. Keep track of the checks you were paid with, those are the paper trail that can hang you. While it is probably best to declare those, think about the other instances when cash might come your way. Does anyone declare proceeds from a garage sale to be income? Money from other small occasional windfalls? It might all just mix in, no big deal.

Personally, I wouldn't go with a computer program (Turbo Tax or any other) for sorting out business things on an exploratory basis. Talk to an accountant or go to the library and you'll find quite a few current books to do with the tax code. An accountant isn't like a priest, he/she can testify about your conversation. Try the library first--they don't keep records of what people check out.

Working off of the books is a time-honored tradition in the U.S. I don't buy the arguments about paying your bit for all of these honest-sounding federal programs. You give that money to Bush and he's just going to turn around and give it to one of his rich republican friends as an "incentive" of some sort. At the most, with the income you're not reporting, you're shorting Bush a couple of hundred dollars. Better you keep it than he gets his mits on it.


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Subject: RE: BS: Dodging Taxes - Advice
From: LadyJean
Date: 31 Jan 04 - 01:18 AM

I worked for a gent I called Jeffrey the Twit. He was getting his master's at one of the local universities, and paying his way by running a second hand book business.
One day I said something about income tax, and Jeffrey the Twit told me he hadn't paid income tax in 3 years.
The IRS didn't come after him while I was working for him.
He was a colossal twit. He bought all manner of rubbish at yard sales while he was shopping for his books. He had a whole wall full of paing by number pictures, that other people had painted, and he'd bought. He brought home half a dozen lava lamps, once. It was after that that his girlfriend left him.
We had a very pleasant chat about classical French drama one morning, after he had stayed up all night. He hadn't read the plays, as I had, but he understood the philosophy behind them.
He had a very nice cat. Which is the other reason why I never turned him in to the infernal revenue. I don't know where he is now.


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Subject: RE: BS: Dodging Taxes - Advice
From: Kaleea
Date: 31 Jan 04 - 02:29 AM

If one desires to be "tax free" then one only has to become a not/non profit entity such as a church. One might check out the Church Universal & Triumphant or some such thing to get ordained & have a shingle which says you are part of that there thingamabob & as an ordained personage, you simply use whatever $$ coming in for outgoing church related expenses. Now I myself do not participate, however I know of several folks who do. One feller has the boss donate the equivilant of his salary to the church, which is tax deductable for the boss, & the church simply uses the donation to pay for expenses for the combination parsonage/church facility, etc.
    Golly gee, if the dirty dog terrorists use this non-profit gig right here in the good ol US of A to hide, launder, & siphon funds in various directions (toward the mid easternly direction), then hey, it ought to work for an American through & through Musician!
       Let us know, cause the rest of us may want to try it, too.


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Subject: RE: BS: Dodging Taxes - Advice
From: Maryrrf
Date: 31 Jan 04 - 11:35 AM

I can certainly understand where "dodger" is coming from. We all know the wealthy are dodging taxes right and left, as are corporations. They may hide behind a thin veil of legality, but we all know it's a joke and most of them are getting away with it. One can hardly fault the rest of us poor suckers for resenting having to fork over taxes on the pitiful little extra things we do to supplement our meager earnings. Of course there's the fear factor, which keeps most of us honest, I suppose.


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Subject: RE: BS: Dodging Taxes - Advice
From: McGrath of Harlow
Date: 31 Jan 04 - 01:33 PM

After I stopped working as a journalist and became a social worker, I continued doing a little work on a commissioned basis. No secrecy about it, all declared.

But the amount I was getting from this was so low, some official decided it couldn't be right, so one Christmas Eve I got a tax demand for them based on an estimate of my earnings they had come up with, which was way way above what I'd been making.

One way and another I was able to convince them of the truth, and they withdrew the demand - the point of the estimate was to scare me, just in case I was underestimating.

So the moral is, if you are earning anything, and declaring this source of income, don't try underestimating the real figures and thinking they'll accept a low figure.

Meanwhile the people with the real money are getting away with murder, thanks to bent accountants and bent laws.

There's an old saying "It's the poor as helps the poor", and that's true, as anyone who has tried collecting for charities knows too well; but the true saying that should go with that is "It's the poor as helps the rich help themselves".


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Subject: RE: BS: Dodging Taxes - Advice
From: Chief Chaos
Date: 31 Jan 04 - 11:50 PM

Perhaps you mistook my posting folks. It doesn't matter whether you withold due taxes or not. What Bush wants he's going to get. In order to balance the books he'll just take the money from the other programs that he and his cronies don't like. I guess I'm barking up the wrong tree anyway. Whatever money he does get he'll use to fund what he wants and give the rest back to the poor humble rich folks.
Perhaps you'll be called a traitor and terrorist for helping the bad guys by denying Uncle Sam his due.

well... to finish,
"Render unto Ceaser that which is Ceaser's"


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Subject: RE: BS: Dodging Taxes - Advice
From: Stilly River Sage
Date: 31 Jan 04 - 11:57 PM

"Caesar." Close, though, and while I could tell it was misspelled, I had to look it up to get it right.

Point taken. It's a no-win situation.

I heard the theme song of Bush and his cronies tonight:

"Screw You: We're from Texas."

(And I should note there is a variant: "Screw You (little guys): No More Taxes (on the rich)"

SRS


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Subject: RE: BS: Dodging Taxes - Advice
From: GUEST,Van
Date: 01 Feb 04 - 07:33 AM

McGrath

You're probably right that the rich get away with it more than the rest of us but look at the advantages they have. You live in Harlow if you were mega rich you could keep your home there, another in the Bahamas, another in South Africa, one or two in America etc. and then argue about where you live and who should tax your money. Look at the Phoney Pharoah - Al Fayed - he no longer resides in Britain for tax purposes but can take court action in Scotland because he has a residence there. I think its called having your cake and eating it. You and I can't do that but these buggers apparently can.


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Subject: RE: BS: Dodging Taxes - Advice
From: Peg
Date: 01 Feb 04 - 10:51 AM

Given the amount illegally withheld or undeclared by huge corporations who are also raping the earth, crushing the American economy, and exploiting workers, an amateur musician's paltry gig and CD earnings is small potatoes. Let's get some perspective, folks. Redirect all that righteous indignation towards the fat cats that cheat the system every day.

People who live on tips and underreport the amounts *usually* need that undeclared income to survive. In general, people who make the lowest median incomes are the most unfairly taxed in this country.

I am in agreement with the 'declare checks, don't worry about the    cash' school of thought, unless your yearly take goes much above   $3000.


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Subject: RE: BS: Dodging Taxes - Advice
From: McGrath of Harlow
Date: 01 Feb 04 - 01:18 PM

The super-rich only get away with that kind of stuff because their freinds in politics make sure not to do anything effective to change the law, so they can't get away with it.

It wouldn't be hard to work out tax laws that would catch them. Basically, where it can be shown, on the balance of probabilities, that some adjustment to the business affairs of a person
- I mean the way they get paid and so forth - is in existance in order to avoid paying taxes for which they would otherwise be liable, this should be treated and punished as attempted tax evasion.

And accountants who devise such tricks should be legally and professionally liable as co-conspirators in an attempt to defraud the public. (And "person" would include corporate persons.)


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Subject: RE: BS: Dodging Taxes - Advice
From: Shanghaiceltic
Date: 01 Feb 04 - 11:33 PM

As Samuel Pepyes said;

Two things are certain in life death and taxes


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Subject: RE: BS: Dodging Taxes - Advice
From: Bo Vandenberg
Date: 02 Feb 04 - 01:57 AM

The hard work but longest strategy is to learn from those who are not paying taxes.

Find out what your allowable expenses can be (professional help suggested) then be scrupulous about how much money you dont make. Travel, lodging, food, instruments, promotion are all expenses that most folkies don't keep track of. Subtract your allowable costs and see how much money you are really talking about.

The press is always eager to talk about tax avoidance like people are criminals but if there was ever a tally of the tax deductions people _dont_ claim, the unimployment _not_ collected I think people would be astounded at the number.

S


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Subject: RE: BS: Dodging Taxes - Advice
From: McGrath of Harlow
Date: 02 Feb 04 - 09:04 AM

True enough - ordinary people don't claim lots of tax allowances and benefits to whiuch they are entitled. But up the top it's a completely different story, and the amounts involved are enormous, and the arrangements they enter into to screw the rest of us are incredible.


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Subject: RE: BS: Dodging Taxes - Advice
From: GUEST,Larry
Date: 02 Feb 04 - 09:24 AM

This reminds me of a story told by Sally Rogers.   She was once audited by the IRS.   Fortunately, Sally is a meticulous record keeper and had recipts and bills for everything.   After going through the audit, the IRS inspector actually discovered that they owed her money.   She had actually overpaid, and therefore got a refund check.

When the auditor finished, he told Sally he had just one more question. After looking at the small amount of income she had compared to all the work she did he asked her "Why do you do this"

Larry K


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Subject: RE: BS: Dodging Taxes - Advice
From: Chief Chaos
Date: 02 Feb 04 - 01:11 PM

That reminds me of a new story I once saw.

Seems that the owner of diamond P styrofoam products (look at the bottom of your cup, if you see a P with a diamond around it that's the one) renounced his U.S. Citizenship and moved to the Dominican Republic to avoid paying taxes on his millions. His wife and children remain in his Florida mansion. He then tried (and is still trying) to get his "friends" (read that people he makes campaign contributions to) to make him the ambassador to Florida from the Dominican Republic so that he can get residency back in Florida and actually live there with his wife and kids totally tax free.

As if that wasn't bad enough you should know that poly styrene pellets (which they make all of the styrofoam products out of) is the number one solid waste pollutant!


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Subject: RE: BS: Dodging Taxes - Advice
From: McGrath of Harlow
Date: 02 Feb 04 - 05:11 PM

Logical thing is, have the law so that you pay your taxes wherever your business actually physically is, and wherever it makes money. If you move abroad, makes no difference, except maybe the place you move to charges you taxes as well. Same if you have the business registered somewhere else, that just means an extra place which can charge you more taxes, if it feels like it.

There'd still be scams and fiddles - but the point is, they'd be criminal scams and fiddles, outside the law, and subject to criminal investigatiin and prosecution. They wouldn't like that one bit. Very likely a lot of people pulling nonsense like that, which is currently just about legal, would decide it wasn't worth the trouble, so they'd pay up, and settle for just being filthy rich instead of disgustingly rich.


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