On Fri, 3 May 1996 brerrabbit@alpha.c2.org wrote:

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Sandy Sandfort <sandfort@crl.com> wrote:

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A couple of generations ago, only multinationals and the super rich could avail themselves of offshore banks, asset protection trust, foreign incorporation, etc. Fifteen years ago, I was helping members of the upper middle class do the same think.

Today, virtually anyone on this list can afford these techniques. Non-US people have been using them for years. The reason middle class Americans aren't savvy that yet are ignorance and inertia. Everyday, Americans are becoming less parochial (due in part, ironically, to government hysteria about money laundering) about such possibilities. As the Clintons and Doles turn up the tax and regulatory heat, they will also overcome their inertia.

Do tell. How would someone, just for instance, who is considering leaving a "permanent" job for the higher compensation available to contractors and consultants be able to structure a business in such a way as to benefit from these techniques? If we assume a rate of between $60/hour and $125/hour (typical in Boston, New York, and the Silicon Valley), how much can one save? How much effort and money is required? How much risk is involved?

Actually, I disagree with Mr. Sandfort on this one. Taxation of International Income is a tremendously complicated field. (You can get an LL.M. in international taxation alone for example). While many on the list may be clever enough to find the resources to properly structure businesses such to limit their tax exposure, the real need is to research tax law, not tax technique. This is a dynamic and ever changing field and I cannot condone going it alone. Tax consultants charge $150 an hour (though I would be surprised to find an international tax consultant worth his or her salt who was this cheap) because they can. I've been doing international issues for years and I still get surprised occasionally. So do experts who have been doing it for decades. If your simply looking to pick a jurisdiction, that's not so hard. Neither is simply using a tax haven in simple ways or concealing skimmed or cash assets. Actually structuring an internatinal business endeavor is a whole different ball game. Are you looking to avoid or evade taxes? Are you willing to relocate? Renounce your U.S. (?) citizenship? Can you do your consulting from an offshore office? Will you be in the United States for more than 182 days a year? I could go on for pages with questions like these that will significantly change the solutions for you. Blame Mr. Loomis' "fair and reasonable" taxation system for the fact that I could also easily bill you $5000 for basic and rudimentary consultation.

There are many books on the shelves claiming to show how to avoid taxes using these techniques. Most of them have the smell of "dangerous crackpot" about them. Can you recommend any in particular?

Absolutely essential core reading includes: Graetz, Federal Income Taxation, Third Edition and Code Suppliment for 1996. The text is 1100+ pages, the code 2025 pages. Lind, Schwarz et. al., Fundamentals of Corporate Taxation, Third Edition. This text is 790 pages with a ~50 page yearly suppliment. Gustafson, Pugh, Taxation of International Transactions 4th Edition, with International Income Taxation Code and Regulations suppliment and current tax law suppliment. The text is 860 pages, the code and regulations book 2604 pages and the current suppliment for 1996 is 100 pages. Any book more than a few years old or without a yearly or (as with the better publications quarterly) suppliment, is useless. --- My preferred and soon to be permanent e-mail address:unicorn@schloss.li "In fact, had Bancroft not existed, potestas scientiae in usu est Franklin might have had to invent him." in nihilum nil posse reverti 00B9289C28DC0E55 E16D5378B81E1C96 - Finger for Current Key Information Opp. Counsel: For all your expert testimony needs: jimbell@pacifier.com