Legal Corner

If you are going to try and outsmart the government....
JB1982 17 Reviews 1266 reads
posted

you are quite literally playing with fire and will probably find yourself on the loosing end of any battle you have with them.

The government has UNLIMITED resources if they decide to come after you.  You, on the other hand, presumably do not have unlimited resources to fight back.

Finally, don't forget about RICO (Racketeering Influence and Corrupt Organizations).  If you create a business to engage in a criminal enterprise or to assist others in engaging in criminal activities, RICO was designed just for you.

yea.well2596 reads

I'm posting the questions an alias for privacy reasons I'm not worried about your answers in the open, that's my concern not the peanut gallery.

I've asked this question to my accountant and a lawyer however I'm interested in reading the  "meaningful, constructive, intelligent  " feedback of  debate.

I'm aware the establishment can directly go after the owners with criminal charges, "this is a given" so lets table that refrain. I"m interested in thoughts "SPECIFICALLY within the parameters" below.

For a hypothetical USA Escort Agency / Service which is the best way to go LLC, S Chapter,  C or IBC considering the following:

1) Tax savings  ( minimizing bending over to the IRS legally)
a) What about Privacy, the best state to incorporate and can I get  nominal directors?

a) Known issues  pros / cons with a particular corporate vehicle

2) Civil liability

a) Criminal liability from the perspective of which is easier to collapse the corporate bubble in theory. I'm aware there are a million things that can go wrong I'm talking structure and owner protection strictly from the corporate side

3) With banks requiring personal information even for corporate accounts, is there any point to having an offshore corporation / IBC as an Agency anymore? You still have to give up your personal information as if you were opening a personal account.  Thoughts ?

4) If you were starting an Escort Agency what would be your preferred corporate vehicle
and why legal and financial ?



Thank you

Sophos

I don't think any business plan protects you legally. And as far as LLC, S-Corp, C-Corp, partnership, assuming it was legal, we would need to know what you expected your income and expenses.
I would recommend that you not involve other people as owners, share-holders unless they completely understood the kind of business you were running. They are assuming the legal risks by being involved.

you are quite literally playing with fire and will probably find yourself on the loosing end of any battle you have with them.

The government has UNLIMITED resources if they decide to come after you.  You, on the other hand, presumably do not have unlimited resources to fight back.

Finally, don't forget about RICO (Racketeering Influence and Corrupt Organizations).  If you create a business to engage in a criminal enterprise or to assist others in engaging in criminal activities, RICO was designed just for you.

yea.well1703 reads

Thanks but completely and totally unhelpful.

Yes I'm well versed in RICO my very specific question wasn't about that. I'm not trying to out smart the government my aim is actually along a completely different  line in fact.  Which again isn't relevant to answering the question.

I appreciate it, but your not saying anything I don't already know or has already come up in discussions with other professionals over a lobster lunch and a good J. Lohr Bay Mist Riesling .

The questions are limited in scope for very good reasons.

Damn, can't find a competent unconventional mind when you need one. {laugh}

Sophos

yea.well1251 reads


Again, as I said "I'm aware the establishment can directly go after the owners with criminal charges, "this is a given" so lets table that refrain. I"m interested in thoughts "SPECIFICALLY within the parameters" below.".

I also didn't list Partnerships because they are not a consideration. as for shareholders it's not a concern at the moment so take that off the table, I don't want to get into why, it just is.

To answer your other question, for this academic exercise use the business model of an entertainment bureau for your expense structure.

So now can you offer a constructive perspective in a purely academic exercise ?


Sophos


and your questions are far too broad and vague to expect meaningful answers from this board.

       Just to explain the difference between the “tax savings” of the different corporate vehicles you list would take a several page response. You didn’t even specify whether you are talking about income tax, payroll tax, self employment tax or corporate tax rates vs pass thru tax rates, tax on dividends etc. We don’t give that kind of detailed advice here.

       Civil liability? To Whom and for what? To employees, clients, vendors? Civil liability of the corporate vehicle or civil liability of the owner? Again, it would take a mini-treatise to cover all this beyond stating the basic proposition that as owner you would have no contract liability for the obligations of a properly set up corporate vehicle but you would still have tort liability to the extent you committed a tort.

     “Criminal liability from the perspective of which is easier to collapse the corporate bubble in theory.”
I have no idea what that means. LE is going to indict you, not the shell you incorporate. The state will eventually terminate your charter if it learns the vehicle is engaging in criminal activities; you can always dissolve these corporate vehicles easily by making the proper filings.

   I’d suggest you start over and ask one specific question with proper factual context if you want to get an intelligent answer.

yea.well1069 reads


You have a valid point.

I've already had answers from "conventional thinkers", but sometimes I like to take conventional assumptions and turn them on their ear and say ok, now .. what if? Sometimes interesting perspectives come out, sometimes they don't. However every blue moon, you get some guy in the corner who sees a prospective conventional thinkers miss. Granted, when you then plug it into reality it may or many not have any value.

Thank you for your time and  input it was appreciated.

Sophos

...paying for lobster and riesling, at the very least.  Free advice is worth what you pay for it.

I'll try to answer some part of your questions.

repercussionsindeed2146 reads

From a legal point of view, a foreign corporation with no US bank accounts is your best bet. Canada sounds good to me, since a lot of what you are doing will be legal there. Take in cash here and find out how to get it there, legally and cleanly. Sure, doing that will get you attention, so you need to balance the value of that legal shelter with the increased likelihood that if your venture is successful, the way you are handling cash will be reported and scrutinized. So you better do all the reporting necessary, be squeaky clean in how you handle and report the money.

Or, to put it differently, if you are going to play games on taxes and engage in running an escort agency, you will be going away for tax evasion sooner or later.

Which then makes the form, state and tax implications of your incorporation a non-issue.

Incorporate in Canada, and most importantly, move to Canada. Register the business in every state where you plan to do business. Pay all your taxes, file everything you need to file, and be very careful about when and how you come back into this country.

All of which creates a whole new set of challenges as to how you actually run this business, but since you did not ask that question, I am answering the specific questions and following your rules.

And always beware of the trap in thinking that since you are already skirting some rules, there is no harm in skirting a few more. It is always the last one that trips you up.

Neither a lawyer, an accountant, nor a criminal, but it was a fun fantasy...

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