umm why go through all the mess of registering a company abroad n all...

this is what i do... show expenditure... all of it... show little or no profit... that ways u dnt pay taxes... whats d need of all the headache??

2 words....Wesley Snipes.

I was audited once. The woman wanted to sleep with my auditor, and tried to make it clear that she wouldn't clear my case until he did her the favor she needed.

These people have leeways and powers that don't even have to be relevant to numbers. Yes, you can have your case re-audited by a higher authority if you feel wronged, but then your fees mount. And who ever knows who's in bed with whom.

After that, I opted out. Opted out of the system entirely. This is what I recommend.

If you feel social fiscal responsibility, tithe according to your good conscience. Don't depend on authority to tithe nicely.

For one thing, if you do your own taxes, this will take you many days of un-enjoyable work. And a few weeks of the stress of procrastination that leads up to the point where you can finally push yourself to do it.

And after that, the numbers won't be in your favor. You will owe money. Maybe money you already spent. You won't be able to get enough expenses. What are you going to do - invent them? No no no. Invisible money is one thing, invisible expenses are a whole nuther level of pissing off the government.

It is even worse than you think. If you try to open an account in a bank that is a "qualified intermediary" then an american birthplace will already result in you being reported

If you do that you will anonymously pay withholding tax on the interest you get. This tax will get progressively higher over the next couple of years and eventually they will report you as well. This is even the case in some islands in the Caribbean. This should be relatively easy to avoid but getting a personal account in your name is NOT the way to do it.

Wesley Snipes is not exactly a low profile person. Doesn't matter if he was right or wrong in what he did. He HAD to be made into an example because if he was right and he would have been allowed to win his case it would have had a disastrous effect on government control.

There is another way of looking at this. If you are not paying 40-60% tax (depending on where you live and how much you make) then that beats any interest rate you will get from a bank. Until you get caught either because of your own stupidity or because of some ex bank employee selling a few disks with your account info to your government (e.g. recent Liechtenstein scandal)

I only read the first few posts, but couldnt you buy some Paypal accounts, send income there, and buy prepaid debit cards with it?

Even having a permanent residence outside the us will not liberate you from the us irs. The us is one of only 2 countries in the world (unless more have been added to these two recently) that tax non-resident citizens. If you are a non resident citizen and "forget" to file or pay, the next time you need a new passport or return to the us for a visit, you might get some nasty surprises.

The only way to really get rid of the us irs is to leave and give up citizenship and do that properly. You need to be careful even when giving up your us citizenship because if they deem you are doing that for tax reasons they want to keep taxing you for a few years to come.

Who said slavery has been abolished?

I see the debate here, and as an American who does live abroad, I think that some of the remarks are misplaced. There is avoiding tax, and then there is legitimately playing the system to reduce your tax. Let me give you an example....

Up until a couple of days ago, I was working at a fairly miserable, dead-end job in a country where I paid 52% tax on income and 65% tax on bonus. Yes, I got some benefits on the side, but with those kinds of taxes, you're never going to save any money.

Through a bizarre series of events, I finished the week with a job which pays slightly less, but has better career prospects and 90% higher take home pay. This is in the same country. My tax construction changed and the rate dropped from 52% to 28-29%.

If I set up my own company, then the tax rate drops, effectively, further, to around a base level of 20%. (This is because I put in expenses, such as office space, car, etc.) And, I actually may benefit from paying tax in the US rather than here. (I have a US-based accountant who tells me everything to do and not do.)

Instead of trying to hide all my cash, I would actually be documenting everything and leaving the tax services to go after those who, well, have cash and no way to explain it.

As for those on this board who would like to reside outside the US, do you want to live in a shack in the third world or someplace in the EU or another OECD member state? You can do it, and I'm happy to explain how... all perfectly legal and you don't need to pay some shady outfit in Barbados for their "connections"...

It's interesting to read your illuminating post. Playing the game within the system can work well, for some people.

I contend the outlook " do you want to live in a shack in the third world". Although I do agree that western countries have unique advantages, it's getting harder to find this 3rd world place. I'm on the tip of an island in the middle of a 3rd world nowhere, and it is cosmopolitan and relatively affluent. I pay US$1250 for my furnished two level house, which includes a TV with a diagonal screen measurment that betters the penis length of the mighty Zeus. It's outfitted with enough rooms and couches and speakers and bathrooms to allow any couple to feel opulent and to entertain with a sense of grandiose excess. Up on a hill close to a central district, but off-street with no through traffic. US$1250 per year. Nice view from the upper balcony too.

It's not just tax savings that you get from giving up some western benefits. Anything related to labor will be 1/4 to 1/5th the western price.

And for the older prowling male - single or just curious - a westerner will be surprised at just who is interested in him, in foreign lands.

Expat life includes tax considerations, it includes a lot to give up, a lot of frustrations, and a lot of frustrations. And I've never met an expat who went back.

Nice post and I like your attitude!

This is also an excellent explantion of what my incorporation service is all about, even though it is USA based.

I could not have said it better myself!

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