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I am new to this. I am working with an international company…

I am new to...

I am new to this. I am working with an international company who asks me to except checks from their customers, I deposit and then wire via paypal or via wire bank account. I have not done anything yet, because I am wondering what the tax laws are in China and how I will be taxed. Do they 1099 me, or?

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

The checks are made out to me.? I find this odd and why would the company I work for, need this to happen. Why, as a representative in the US, would they need my name on the check?

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Customer reply replied 4 months ago
I need to know if this legal?
Customer reply replied 4 months ago
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call.
Customer reply replied 4 months ago
Let me know if you need more information, or send me the service offer(s) so we can proceed.
Answered in 24 minutes by:
3/17/2018
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,677
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi. My name’s Lane.

...

I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

Bear with me just a moment.

I'm reviewing your question now and typing up my reply.

...

I'll post that in just a few moments. Then, let me know if you have further questions on this.

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Customer reply replied 4 months ago
Please let me know if this is tropical business acumen for China.

It sounds like what they are doing is treating you as an independent contractor (which, yes would generate a 1099 to you).

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(I'm not sure I understand your question) The fact that the foreign company is in China does not change the US tax issues.

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The issues you'll have to deal with here (I've not even scratched the surface) have to do with YOUR citizenship and residency. The foreign company could from any foreign state.

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First, you need to know that you may be considered a "Money Transmitter" under an administrative ruling from the Financial Crimes Enforcement Network (“FinCEN”).

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Second regardless of whether they give you a 1099 (likely not ... there is no facility/jurisdiction for IRS to require this of a foreign company) you'll need to report on schedule C

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You will, of course, be able to use your legitimate expenses, to reduce your taxable income that will flow from the schedule Co to line 12 of the return.

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On another front completely, you'll need to be sure that you're not facilitating money laundering in some way. Simply receiving money as an agent for a foreign company, especially when you see (even better deliver) the product that's being paid for, is not in of itself a crime

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Customer reply replied 4 months ago
Is what they have me doing, possibly considered a "crime"? How can I find out? Reach out to the above named company?

I think I may have just answered your question ... I'd want to know everything about the supply chain here. YOu will also have a requirement to report amounts over 10,000 paid to youi in cash to IRS/Trreasury for just that purpose (money tracking)

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https://www.irs.gov/businesses/small-businesses-self-employed/form-8300-and-reporting-cash-payments-of-over-10000

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But no, simply taking the money and relaying in your own now (although HIGHLY suspicious, especially as it relates to money laundering) is not itself a crime.

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You will need to report every penny as gross income, and then report the money sent to the company as part of your expenses so that you are only taxed on the net amount.

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You CAN sen THEM a 1099, but there is no requirement for that if they have no US presence

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If they are evasive about every step in the process, you may just have a something illegal here.

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So how does money laundering work?

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The first step is called placement: A criminal puts illegal gains into circulation by using shops and small businesses. Startups can become a target for criminals interested in "cleaning" their dollars (or using someone like you)

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The next step is layering. This refers to how illegal money is separated from its source (such as drugs or prostitution). Basically, this involves shuffling money around to throw off anyone nosing around for it.

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The third step entails integration, giving the funds legitimacy through its re-entry into the economy through normal business transactions. By the time the funds enter the integration stage, it is difficult to distinguish between legal profits and illegal wealth

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Customer reply replied 4 months ago
The first check is from a company that does exsist. The check is for $65,510, made out to me. I am suppose to deposit and then remit to Shangang Group. They will in turn, send me my commission on it and or I was told to take my commission out and then remit. Sounds a little to easy?

Yep ... you could be getting in the middle of either (1) money laundering or (2) a scam where you never get paid, or both.

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Just think if they send you a check that turns out not to be good, and you send them a check from your account that is ........

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If it's NOT that then their simply running money through you is highly suspicious

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Customer reply replied 4 months ago
How can I be totally sure?
Customer reply replied 4 months ago
Sorry for sounding naive.

Ask lots of questions ... as I mentioned above, if they are the least bit evasive, you'll know. They should have nothing to hide. And it would just be good due diligence on your part as a business person.

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Also, You might want to tell them that you need lots of information from the company so that you can satisfy your obligations under FinCen

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See this:

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https://www.fincen.gov/resources/statutes-regulations/administrative-rulings/administrative-ruling-whether-company-offers

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Customer reply replied 4 months ago
Thank you Lane. You have been most helpful! So, the next time I have a legal question, I have to go through this site again and pay? I don't think I need a monthly memebership.
Customer reply replied 4 months ago
Do you mean the original documentation Shangang Group sent me?

I don't know what they sent ... but yes, that's a good place to start

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I am just a user here (albeit with credentials verified as an expert user) and have nothing to do with (are not permitted to deal with) things like subscription issues.

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All I know is that they will not compensate me for my work here (with a PORTION of whatever you paid them) until you have rated me positively using those stars on your screen.

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Customer reply replied 4 months ago
I scanned what I have so far, except emails back and forth with the company I work for.
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Customer reply replied 4 months ago
I haven't done anything with it yet

This is really suspect to me ... but as I look at Tompkins, they SEEM legit.

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But it's always easy to set up a web site.

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What you might do is report to FinCen and let them look at the transactions

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https://www.fincen.gov/frequently-asked-questions-regarding-fincen-suspicious-activity-report-sar

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These are the people that would be knocking on your door if something is NOT right.

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Run it by them first

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I'd appreciate a positive rating (using the stars on your screen, and then clicking “submit")

That’s the only way JustAnswer.com will credit me for the work.

...

Thank YOU,

Lane

Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,677
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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