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Joined 7 months ago
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Cake day: October 11th, 2024

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  • I was always under the impression that the fraudulent intent (outside of extremly blatant cases) would be very difficult to prove in court or otherwise. If a car is used to meet clients or haul some company-related cargo, it is used for business. If a company is a real estate developer, it is expected for them to own and lease residential properties. If the owners’ family members work for the company, they must collect salary. And so on.


  • A popular scheme I have seen is:

    Owner registered and de-facto runs an incorporated Company. Company employs Owner and pays them a small salary (down to state minimum wage even), so Owner minimizes the income tax they pay.

    The car Owner drives is owned by the Company for “business purposes”, which allows the car to be operated within 50 miles of the Company (and farther with supplemental insurance). Company counts the car purchase/lease, maintenance, gas as expenses, bringing down the bottom line.

    Flights, travel, meals could be paid by the Company, as long as it’s tangentially “business related”.

    The house Owner lives in (or several houses for the family) is owned by the Company and is rented to Owner for very cheap, so Company pays the taxes, maintenance, etc, breaking even, or taking a loss on this house. Again, this brings down the company’s bottom line.

    Somehow, purchases for a Company can be exempt from sales taxes, too.

    In the end, on paper, the Company is barely making any profit, but the Owner might be enjoying a nice car, nice house, and vacations. All for “business purposes” of course. While you pay taxes on your income and purchases like an idiot