PayPal & IRS Issue
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- mg33
I'm sure plenty of you have gotten into trouble somehow with money, living in other countries, tax issues, etc. so wanted to post this here.
A friend of mine lives overseas but is still a US citizen. He's been making a decent amount of money through PayPal in the past year, and depositing into a US bank account. He got a letter from PayPal saying they are sending a 1099 K letter to the IRS. He's not done his taxes for the US in 5 - 6 years.
Is this something he should seriously worry about? Is he at risk of being shot by a firing squad?
- ********0
overseas = double tax treaty with US? if yes there is hope.
- ukit0
As a U.S. citizen, they reserve the right to tax you no matter where in the world you live. The only way you can get out of it is by renouncing your citizenship entirely.
You might not owe much but you still have to file every year. In other words, your friend was in trouble regardless of the Paypal issue sooner or later.
- pr20
or he files then finds out that the gov't actually owes him the money. didn't do the taxes in 3 years then when i finally did those this year i had almost $5k coming my way...
- if you haven't been paying taxes, how would you get a refund?randommail
- through the backdoor, that´s how********
- some companies take taxes out, i had plenty of expenses - that's howpr2
- ********0
As long as he can prove that he has been paying taxes in country of residence, he can file for back tax. Chances are he will get money back.
On the other hand, IRS can still fine him for not reporting his income and filing taxes because he technically earned his income in US and deposited in US account.
My landlord had a similar issue. He took all of his rental income in to his US account while living in UK. Later, IRS issued a fine for not paying taxes on the rental income.
- randommail0
Pretty straightforward. He'll have to pay all back taxes, plus around 8% annual interest, plus penalties for not filing his returns for both federal and state.
So hopefully he didn't go and spend the taxes. If he did ... OUCH.- Chances are high that he wont as per double taxation treaty********
- I assumed he hadn't paid taxes in the country he was currently residing in either.randommail
- Ah, that is an interesting point you make. I have seen people who tried that and ended up in jail.********
- Chances are high that he wont as per double taxation treaty
- ukit0
I do wonder what they would do if they uncovered an American citizen not paying taxes who was living half way around the world. Would they really send someone after you, if it was a small amount of money? Would the local authorities come and arrest you?
- ********0
^ see Tax Evasion law.
- randommail0
If you do the math, the total back taxes and interest could be well into 6 figures.
Let's hope it's not Hammer Time for this poor fellow.
- utopian0
- fuck tax evaders. you are paying for his lazy ass.********
- fuck tax evaders. you are paying for his lazy ass.
- ukit0
http://entertainment.timesonline…
"Wesley Snipes was sentenced to three years imprisonment last night for his “brazen defiance” of the US taxman....The court heard yesterday that Snipes dodged $15 million (£7.5 million) in tax through a campaign in which he concealed millions offshore, falsely applied for tax refunds and bombarded the Internal Revenue Service with frivolous correspondence that threatened government employees, railed about extortion and used twisted legal interpretations to back his claim that taxation was unlawful."
- utopian0
The IRS is a bunch of cock sucking parasitic whores, fuck them and the U.S. Government alike!
- end rantutopian
- Coming from Canada, US income tax is sooooooo damn low.********
- I laughed when I got my first US paycheck.********
- well I didnt exactly laugh.********
- I chuckled a little********
- well I didnt exactly chuckle********
- i smirked a little********
- well I didnt exactly smirk********
- I just gazed at it a bit********
- well I didnt exactly gaze********
- I just got angry at how much they were taking out********
- well I didnt exactly got angry********
- I just got mad********
- well I didnt exactly get mad********
- I went to sleep********
- zzzzzzzz********
- and fapped in sadness or joy.mg33
- LOLutopian
- I fap therefore I matter.
-JSK********
- ********0
So what are we looking at... one month? two months? plus fine?
- ukit0
There are probably countries you could flee to if worst came to worst. There has to be somewhere that has no treaty with the U.S.
- ukit0
- ********0
OH
Bhutan
Botswana
Brunei
Burkina Faso
Burundi
Cambodia
Cameroon
Canada (Canada maintains an extradition treaty with the caveat that any persons extradited will not be subject to the death penalty. The Conservative government under Stephen Harper reversed this position, but the Supreme Court of Canada has placed this reversal in a state of legal uncertainty.)
Cape Verde
Central African Republic
Chad
China
Comoros
Djibouti
Equatorial Guinea
Ethiopia
Gabon
Guinea
Guinea Bissau
Indonesia
Iran
Ivory Coast
Jordan
Kuwait
Laos
Lebanon
Libya
Madagascar
Mali
Maldives
Mauritania
Mongolia
Morocco
Mozambique
Nepal
Niger
Oman
Qatar
Russia
Rwanda
Samoa
Sao Tome e Principe
Saudi Arabia
Senegal
Somalia
Sudan
Syria
Togo
Tunisia
Uganda
United Arab Emirates
Vanuatu
Vietnam
Yemen
Yemen South
Zaire
- mg330
Appreciate this info. He's lived overseas for 6+ years now and has dual citizenship in Japan and the US. Not filed taxes in the US that entire time, and also deposits money through PayPal into a US bank account - not gigantic sums of cash, but not chump change either.
- ********0
Tell him to get a good accountant and file back taxes for him on his behalf.
If he has not taken any money out of the account in US to Japan but not reported it in Japan, he may get fined plus interest and pay back taxes.
If he has taken money out of the US account and reported income in Japan, or if he has not taken money out of the account in US to Japan he will at most pay fines for back taxes.
- Thanks JSK. I am passing all this along to him.mg33
- Loopholes exist, for sure, a good accountant is worth their weight in gold.********
- mg330
JSK,
He wrote this in response:
"I just read everything there. I'm not earning any income in the US as JSK said, and not even 25% of my customers are American.. I'd say maybe 10%. I'm using Japanese money to purchase/license goods. The only way that the US is involved is that A) I'm a US citizen B) Paypal is a US company C) since the dollar is the standard world currency, I deposit US dollars into a US bank.
who knows - maybe I will get a refund since I'm married and with a child. I also read that the IRS has most likely been filing returns for me since I haven't. However, they file as as single with no dependents. And no company is filing a W-2 for me."
- ********0
I'll be honest with you, if he doesn't come back, nothing will happen to him. If he plans on coming back, who the hell knows? They could stop him at the gate, obviously, with technology controlling things (ain't going nowhere either on that level). If I were him, I'd clear that up with the IRS. The 1099 K is required. That's my two cents.
If he ain't selling in the USA, stop using an American-based app. That's silly bro.
- ********0
mg33
Paypal is obligated to report any payments made as they do not know nature of the transaction and it is deposited in US. I am assuming that the address is based in US attached to the Paypal account, if not it would be changed to say Paypal japan and no need for any worries in US.
Best would be get a global bank account (HSBC) to deposit any where in the US.
I would consult not just an accountant but an account who specializes in global accountancy.
From my experience, I had multiple accounts (UK, Japan, Canada and US). I had to consolidate them because I was depositing money in to country's bank account but still based in US. I did report all earning in US and paid taxes in US. Other countries do not know that. This maybe the case. Clarifying your residency would still allow you to keep your money in any country as long as taxes are paid in country of residence and notification of this act in account residing country.
I used Deloitte for number of years until few years back when I just consolidated in to a single global account for work outside US. Any big accounting firm will not use any loop holes as it would be more paper work for them. Find a small US or Japan based accountants who specializes in global taxation.
- Thanks again, he's been reading the responses here. Just not a QBN member.mg33