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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41220
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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An activist and politician in Russia uses crowd-sourcing to

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An activist and politician in Russia uses crowd-sourcing to fund his projects. He is very well known in Russia and also covered by Forbes, WSJ, The New Yorker and others. I was helping him since 2010 and know him personally.
One of the channels of crowd-sourcing he uses is PayPal. It has very limited functioning in Russia, for example, you can only send money to PayPal, but cannot withdraw.
I'm exploring a possibility to assist him by using my US bank account: he can send PayPal funds to my account and I can wire transfer the funds ($100K+) to his bank account in Russia. He will be still responsible for paying taxes in Russia. I'm not planning to gain anything from these transactions. Does this approach break any law in US? Should I be concerned about anything?

Thank you for your question. Zdrastvuite, please allow me to assist you this afternoon.

What you are describing does violate US law, or at least can potentially violate it. Funding from PayPal is reportable to the IRS at this time. Sending funds overseas via your PayPal account could be considered money-laundering since those are funds being sent without oversight to an overseas source, something that is generally reportable. So yes, you should very much be concerned as this would be a federal law violation. Any wiring of funds overseas is reportable regardless of who pays taxes and where--the moment you begin using your own bank account you are exposing yourself to the IRS and even potentially the FBI.

Good luck.

Dimitry K., Esq. and 2 other Legal Specialists are ready to help you
Customer: replied 3 years ago.

Does it mean if I report to the funds to IRS as income and pay taxes here, there is no violation?

Thank you for your follow-up, Pavel.

So long as you can account for the funds, that the funds were received properly, that you report the receipts on your W-1099, and that you pay taxes on all receipts, you then can claim that there is no violation. What concerns me is the fact that you are collecting funds from overseas--that is inherently risky and if the amounts are substantial (over $10,000), the FBI may track the payments to ensure that the funds going in and coming out are not from dubious sources and are not in any way illegal, dangerous, from terrorist organizations, or are otherwise forbidden as a transaction.

Good luck.

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