Car Donation Proposals Worry Charitable Sector – End of the line for that little scam; helping people deduct more than their vehicles are really worth on the open market.

Some messages to the IRS could do more harm than good…

I constantly see people jumping into decisions about setting up corporations without adequate professional guidance. Every day I see postings on the Q&A boards I check stating something like, “I just set up an S corp. Now what do I do?” The time to consult with a tax pro is before choosing which kind of entity and which states are best for the particular situation.

I received this email the other day:

Hi,

I read your interesting article on the possible advantages of a C-Corp vs S-Corp.

Very enlightening.

My question is:

I reside in Florida, and want to set up a corporation…. Trying to decide between C, S, and LLC

I will be the main principal, but will have other partners who contribute both financially and through in kind work, and I will give them some shares.

You mentioned that it only costs $50 to set up a corp in Arkansas.

Is that a viable option for me since I live in Florida? Will I have to travel to Arkansas for legal issues? What are the issues of setting up a corp in a different state than I am residing?

I assume you do this type of thing….

What is your fee for setting up a corp, and what kind of other services do you provide to your customers? Tax filing, required paperwork, etc?

Thanks

My reply:

There are companies that will act as legal in-state agents for corporations when their owners don’t live there. Delaware and Nevada seem to have the highest number of them since those states are generally the best for corporations.

Regardless of which state has chartered your corp, you need to be careful of the source of the corp’s income. Even foreign chartered corps have to report and pay taxes to the state in which the income is earned. For example, Florida has a corp income tax. Regardless of where you charter the corp, you will still have to pay Florida income tax if it appears that the income was earned inside Florida.

There are several very simple methods routinely used to either source the original income through a tax free state or shift it there via inter-company payments. You should definitely work with a tax pro who is knowledgeable in this area. Trying it on your own is asking for trouble of several kinds.

I wish I could be of more help, but you will need to work on a good strategy for your situation with another tax pro. We are currently too overloaded with work and are unable to take on any new clients.

You can check out my tips on selecting a personal tax advisor:

http://www.taxguru.org/incometax/prepare.htm

Good luck.

Kerry Kerstetter

Giving Away Your Property Can Be Very Taxing

Cards list GOP ‘commandments’ – Especially needed for the RINOs.

Sin Taxes: Inferior Revenue Sources

Missouri Tax Credits: Boondoggle – Thanks to Ben Cunningham for passing along this example of incompetence and corruption up in Jefferson City. I’m sure if someone were to check, they would find that the scammers who have made off with the $2 million in tax credit money made campaign contributions (aka bribes) of anywhere from $10,000 to $100,000 to those rulers responsible for the legislation creating these credits. As I’ve long said, there is no better return on one’s money, from a purely investment perspective, than campaign contributions. Mere thousands in donations return millions in direct paybacks, courtesy of the taxpayers.

‘Kerry Edwards’ Site Belongs to Bondsman – It seems that there is something good about having Kerry as a first name during this campaign season. This Kerry has been offered $30,000 for his web domain name and had the good sense to not take up the John sKerry campaign’s request to donate it to them. Lurch is married to a billionaire airhead and has the gall to ask people to donate things of value to his disastrous campaign. He will probably end up paying more than $30,000 for his regimen of Botox injections for his face.

The Most Insidious Tax – Taxing paper gains caused by inflation is an issue I have been writing about since the early 1990s, when President George H. W. Bush wimped out from the opportunity to remove that tax, as I described here. That option is still available if President George W. Bush wants to show that he has more conservative discipline than his father had.

‘Cost of Government’ Date Is Reached Today

Too good to be true? Lawyers seek millions from investors in scheme – One more pyramid scheme collapses, nailing another bunch of scammers, con artists and idiots.

National Taxpayer Advocate Releases Report to Congress, Cites Need for Aggressive Protection of Taxpayer Rights