Shifting income for a US company

[qwertyanonok]

I am working on a plan to reduce taxes for a U.S. company that is owned by a U.S. citizen. I was initially thinking offshore might be a good plan but it seems very difficult for US citizens these days especially for an already established company to shift income. Upon reading many posts about using homeless/bums versus using darks to setup a offshore company, this got me to thinking about a strategy. Can anyone tell me why this plan wouldn't work? Why couldn't he pay some cash to a homeless/bum to sign a W-9 as if they are going to be an independent contractor for the company, then he withdraws cash from his business banking account at regular intervals (monthly/quarterly) to cover his tracks as if he is using the cash to pay this person and then at the end of the year, he issues a 1099 to the address the person put on the W-9. Whether they get the 1099 and pay the tax or not, it isn't the companies responsibility. Am I missing something or would it really be that easy?

The only downside that I see to this plan unless I am missing something is that the owner will have cash that cannot be deposited or spent on large purchases to reduce suspicions as to where this cash came from.

 

[Martin Everson]

When it comes to US it is not a subject I would advise anyone to give advice on. Especially when it concerns this subject .

 

[qwertyanonok]

Why not if using proper OPSEC? Is there somewhere else this discussion would be better handled? I am open to PM's if I am missing something.

 

[ernestdezoe]

What's the goal of the scheme? Deferral of taxation for the company or getting money to the owner of the company untaxed

 

[qwertyanonok]

The goal is to reduce company profits which in turn reduces tax on business owner so the owner ends up with the money untaxed.

 

[ernestdezoe]

The goal is to reduce company profits which in turn reduces tax on business owner so the owner ends up with the money untaxed.

So it's an LLC from what you are saying.

When you say reduce company profits you mean reduce or ""reduce"". Also what is the problem with a more mainstream approach in the form of characterizing stuff as a business expense which counts against income

At some point the owner has to convert the money in quality of life, might as well do it without other rounds and rounds.

 

[qwertyanonok]

Yes, it is an LLC. Normal business expenses are already being deducted but it is not enough. Need more large deductions which is the reason for this plan.

I'm not sure I understand your last comment about "quality of life"?

 

[ernestdezoe]

Yes, it is an LLC. Normal business expenses are already being deducted but it is not enough. Need more large deductions which is the reason for this plan.

I'm not sure I understand your last comment about "quality of life"?

> quality of life

Instead of doing this:

LLC>Complicated scheme>Owner bank account>1 month trip to Dubai

you do this:

LLC> books a 1 month trip to Dubai and it counts that as a business expense which offsets income

The owner of the company presumibly wants to extract money because he wants to spend it and enjoy life, if that is the case there is no need to go to extreme lenghts with complicated schemes, just pick a metropolis around the world, a conference and a cause and you could count that as business expense which counts against income.

You'd get 2 piegons with one stone, and you'd also save a lot of time

Same with car hiring once you get on location. Get a Corvette or Ferrari and write off as business expense.