Mon Oct 22, 2007 9:27 am
Well, that's not the important point really, that guy I was talking about didn't get caught for years because he had all his money in a safe and he didn't have a bank account. You can't do that on the internet, you need everything to be electronic.
When you open a bank account in the US, the bank has to inform the IRS. Plus every year they have to file a W-9 with the IRS for all bank accounts, unless you get them to file a W-8, but they can't do that if you have a US address. And even then, the IRS knows about it. Plus, to open a bank account in the US you have to have a SSN or a ITIN sooner or later, and the IRS is informed when an SSN is issued.
Sooner or later you will get audited if you don't pay tax. The reason I knew that tax agent was because I worked on the construction of the tax office where he worked. I know for a fact they had a department in the basement where all they did was go through the small ads in the paper and check up to make sure people were paying tax. They even went out and did surveillance on people to prove it.
That was in the days before E-bay, but I'm sure they do something similar for internet businesses. I've seen stories where they've gone after people who advertise on Craig's List for domestic help and don't pay the withholding.
The IRS only has so many agents and so much time, but I think they can assess back tax up to 20 years like they can in the UK, plus penalties for all that time.
If you're not paying tax and trying to stay under the radar then getting credit, mortgages, etc. is basically impossible.
It's not just trying to avoid the tax authorities, it's just a constant hassle.
And plus, if you get a serious tax penalty, deportation I guess would shortly follow. especially as the US and Canada have a tax treaty.
Steve.