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I might have figured out how to out-smart the government. I'll let them out-smart themselves!



July 29, 2009 – Comments (10) | RELATED TICKERS: GO , NOW.DL2

Ok I few posts ago, I had mentioned a problem I saw with Chris vs the US in my quest to be a sovereign individual. The problem was that my current income can not move with me and any new income that I try to establish before I leave, can be considered a tax dodge when I leave even if I decide to establish it outside the US. Now before I get someone posting that I could easily hide that income from the government and get away with it, I'm aware of that, but I choose to leave with a clean slate and my dignity.

I mentioned I would have to think of something innovative, and I think I have! I'm going to start a US corporation and let the US tax me on it for the rest of my life!!!!

Now before you call me crazy, I'm going to start that corporation in the US Virgin Islands and follow the strict rules that they have in place. I can effectively pay 3.5% of my income in taxes there. Once I leave the US, after a decade, I could effectively dissolve the company and normally would, except for one of the rules is that I have to employ 10 people in the USVI. I will not cut 10 jobs in an area that needs jobs, simply because it's more convienient, so this company will exist as least as long as I do, if I go this route.

Once I leave, I can at least get an established income while I'm developing my new income in a new world. The government can say nothing about my USVI corp, because I have an equal right to establish it as an US citizen as I do as a foreigner. I will have to move to the USVI when I start the corp, but that actually has more advantages than disadvantages. It took me a while to figure this out, but although other than my EDC corp that I start in the USVI, the USVI is required to mirror the US tax laws in most other respects. Once I'm in the USVI, the greatest concern of the US is to make sure that the USVI is not giving me any other loopholes. The biggest concern of the USVI is that they keep both the US and I happy as long as my company is there. The USVI can care less what I do outside their borders, and they only care about my conduct within their borders to the point that I obey their laws and that the US is satisfied. I still have to liquidate within the same rules, but I have a proponate in the USVI between me and the US government.

The US can lose interest easily once they figure out that I'm following all of their limitations, and hopefully they lose interest before I renounce,  but even if they do not, I have the USVI backing me up! Not only do they want to prove that they mirrored the US tax laws to insure that they can keep the EDC program, but they don't want me to disolve my company.

Any challenge that the US government wants to make against me in court, can be met by a USVI government official witnessing that I met the letter of the law, provided that I do so. I need to make sure my lawyers are up to the challenge, but I get an advocate that most people don't get when fighting the government. I can liquidate my investments and have a record with the USVI as proof right before I renounce. If the US decides to come after me for evasion after I leave, I can point to the corp that is still paying taxes in the USVI.

Now, I haven't talked to a lawyer about this yet, but I'm really excited! If anyone sees a flaw, please tell me.

I'm finally thing that I have a chance of winng a rigged crap game.


10 Comments – Post Your Own

#1) On July 29, 2009 at 1:27 AM, awallejr (33.35) wrote:

I am really not quite sure what you are talking about.  Setting up a USVI corporation to do what?  And what is your role in that corporation?  And are you earning income from that corporation?  If you are on salary then yes you have to declare that income and it is governed I suppose by VI and US laws. And if you are an "S" corporation (and In assume VI also allows for this), you are still liable potentially for taxes once a profit is ultimately shown (general rule is after 5 years, and if not then the government will view your adventure as a hobby and may disallow any claimed losses).

If you want to evade taxes then just don't file and keep running. You can also read Peter Schiff's tax evasion book too. 

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#2) On July 29, 2009 at 2:00 AM, ChrisGraley (28.67) wrote:

awsllejr your radar is right on track. but I don't want to avoid any tax.

Read my previous blogs for my motives. The problem is the US government didn't anticipate someone wanting to pay his tax bills before he left and didn't want to try to evade tax. I'll pay what I owe and then want to be left alone.

The government assumes that the only reason I want to be left alone is that I'm dodging tax.

I just want to break the link, not the commitment.


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#3) On July 29, 2009 at 2:06 AM, awallejr (33.35) wrote:

As long as you are making a profit and subject to the income tax laws of the US you will have an obligation.  It really will depend ultimately on how far you want to push the envelope. The only way to break the link is to break your citizenship and your country of choice or to try to evade.

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#4) On July 29, 2009 at 2:48 AM, KamranatUCLA (29.46) wrote:

I like this post by you much more than your previous posts where I called you a retard and naiive. Now you are thinking!

There is another thing you can do. I saw this on TV with an interview with ex-mob millionare. He said government is slow...they would start a company, not pay taxes, and cheat and then close the company in 2 years.

You think anyone in the government is smart enough, gets paid enough, or has the interest to find out about what you are doing starting companies each couple of years?

The U.S. government is based on taxing the most honest, stupid, (honest= stupid these days) people like myself, who makes $10.50/hour as a driving instructor ( with several degrees from top schools) and there are plenty of people like me out go ahead hide your money and not pay taxes, you desreve it ( I am not being saracstic).

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#5) On July 29, 2009 at 8:01 AM, cthomas1017 (98.37) wrote:

Rule 1:  If you're going to try to outsmart the government, don't post the plan on the internet.

Rule 3: Once you've outsmarted the government, look up the word, "retroactive".

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#6) On July 29, 2009 at 9:55 AM, ChrisGraley (28.67) wrote:

You guys are all missing the point. It's the fact that I want to be honest that I get screwed by the good old U. S. of A. I want to pay all the taxes that I owe when I leave, but even if I do that, if I try to establish any income outside the US before I leave, the US can say I'm dodging taxes. Given the amount that I'll have invested in this, not having an income at least started is a bad idea. The USVI corp gives me a chance to start that income and avoid the US challenge that I'm evading tax. The USVI agreement with the US assures that as long as I obey all the rules, the US can not persue me for any taxes on the USVI corp. They may say that I'm doing it to dodge taxes, but the agreement assures that they can't persue me for it. Even though I'll be living in the USVI before I leave, since their tax law mirrors the US, the US can not say that I moved the the USVI to avoid taxes on the rest of my assets. I pay the same exit tax either way.

Since I'm not breaking the law, I have no worries about posting my intensions on the internet.

awallejr, breaking my citizenship is the plan, This just gives me the means of a simple income after I break it, rather than having to start from scratch once I've left.


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#7) On July 29, 2009 at 10:40 AM, Schmacko (91.38) wrote:

To renounce your american citizenship you have to be in a foregin country.  The US Virgin Islands being a US territory and not a foreign territory probably don't meet qualification #2 for renunciation.  From the state department website:


A person wishing to renounce his or her U.S. citizenship must voluntarily and with intent to relinquish U.S. citizenship:

1) appear in person before a U.S. consular or diplomatic officer, 2) in a foreign country (normally at a U.S. Embassy or Consulate); 3) and sign an oath of renunciation

Renunciations that do not meet the conditions described above have no legal effect. Because of the provisions of section 349(a)(5), Americans cannot effectively renounce their citizenship by mail, through an agent, or while in the United States. In fact, U.S. courts have held certain attempts to renounce U.S. citizenship to be ineffective on a variety of grounds, as discussed below.

Also I imagine you'll lose your ability to travel under US passport once you renounce your citizenship, so have you figured out how you'll get around that hurdle? 

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#8) On July 29, 2009 at 10:45 AM, IslandEd (< 20) wrote:


I highly recommend you review and contact them for strategies and structures. The EDC program is legitimate, Congressionally approved, provided for under IRS Code Sections 934 and 937, and has been around since the 60's. It is an amazing program!

Island Ed

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#9) On July 29, 2009 at 11:35 AM, ChrisGraley (28.67) wrote:

Smacko, yes I do have that plan in place and will renounce in an embassy in another country. I will have citizenship for that country at that time and a passport for travel.

And IslandEd, I was looking at that very same website yesterday. They will most likely be the company that I go throught to take care of this.

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#10) On July 29, 2009 at 3:28 PM, IslandEd (< 20) wrote:


If you have viewed the site, you have noticed that Teddy Skokos of Clearwater Consulting Concepts, LLLP is featured there. Teddy is a tax attorney, with his LLM in taxation, and has owned and operated an EDC company since 2002. He is one of the few, if not only, tax attorneys in the world with EDC ownership experience. Based on your comments on this thread, I strongly suggest you contact him to discuss your goals with the EDC program before you make any moves. Feel free to email for contact information.

Island Ed

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