The IRA Rescue Plan®

The IRA Rescue Plan®

Do you have money in an IRA or a 401(K) that is causing more tax problems than solutions? Are you worried that your investments are vulnerable to unreasonable market gyrations? Are you disappointed, perhaps disgusted, by the performance of your investments? Are you concerned that these investments are not safe from government encroachment and/or seizure?

Would you like to be able to invest your IRA or 401(K) investments as you see fit, and not according to arcane government rules and/or your bank and broker?

Would you like to easily and simply invest in land; anywhere?  Gold?  FOREX?  Options?  Offshore business opportunities? etc.?

The IRA Rescue Plan® may be the perfect thing for you.

STEP 1:    Liquidate your current IRA account, and roll-over the funds to a new Custodian (in the USA) that will agree to hold non-registered shares (not all banks and brokers will hold non-registered shares even though they are legally allowed to do so).

STEP 2:    Establish a specially structured IRA Investment Company that will be legally owned by your IRA Fund.  You will be the President/Manager/Director of the Company, and your IRA will be the shareholder. Since the company will be a “pass through” tax entity, and your IRA is a tax exempt entity, there will generally be no taxes on the income of the company.

STEP 3:    You instruct your new Custodian to buy shares in the newly formed IRA Investment Company as described above.

STEP 4:    You invest the funds of the newly formed IRA Investment Company as you see fit (subject to basic rules of business). Invest in foreign companies, gold and precious metals, international real estate, etc.

The entire structure is legal and designed to comply with a number of important Tax Court Rulings and Appeals Court decisions.  Best of all you remain in total control of the money (in fact you will have more control over the funds than you did before!).  By arranging for your IRA account to buy the shares in the new company under your control, the money in the IRA will then be free to invest as you see fit. You will even be able to give yourself “reasonable” compensation for services.

The package includes the formation of your IRA investment company, arranging the roll-over of funds to a new Custodian, and an Attorney Opinion Letter approving of the structure and transfer.

Freedom and Opportunity, combined with Safety and Security.  A very rare combination.

CAUTION!

There are a number of programs available that allow you to withdraw funds from your IRA, but not all are the same. In order for a system to work it must comply with Swanson v. Commissioner. The case is very detailed, and provides a blueprint of how to comply. However Swanson does not describe every possible contingency that may be acceptable, although it does reject a few alternatives.

In the past we cautioned against using any system that deviated from the “safe harbor” defined in Swanson. The entire area was so new and untried that we believed it was just too risky to experiment. However, as time has passed it appears that some of the more novel approaches are in fact working just fine.

One system that we have now adopted involves the simple use of one LLC treated as a “pass through” tax entity. Since the IRA is exempt from taxes, there will be ZERO tax on the entity as long as all the company does is passive investments.

We feel confident that this system is safe and effective, but as always, when dealing with the IRS, there is always a chance that the IRS and/or the courts will change their interpretations of the law.

Are you interested in finding whether or not the IRA Rescue Plan® might help you?

DOWNLOAD FREE REPORT: [IRA_Rescue_Plan]

Recent Posts

How to Operate a US Based E-Commerce Business from Outside the USA and Save a Lot of Money!

For the past 15 years I have been promoting the USA as the ultimate banking solution for non-residents (or as some might say a “Tax Haven”). My traditional proposal was to set up a US LLC, take the default election of ‘disregarded entity’ (a “disregarded entity” is an LLC that is treated by the Internal Revenue Service as a complete pass through entity. For tax purposes it does not exist. For all other purposes it does.), open a bank account, and as long as you are not earning any US Source/Effectively Connected Income, you are fine. No need to file tax returns let alone pay any taxes.

That is no longer universally appropriate. FATCA has not changed the tax treatment issues, but has changed the reporting requirements for US payors such as PayPal, Amazon, Shopify, Stripe, etc. The issue of the W-9 (reporting form for US resident payees receiving funds) and W-8Ben (reporting form(s) for non-US residents receiving funds) was always a little murky but now it is downright impossible. Non-residents receiving payments from US payors, even if the funds are “not effectively connected” to US income, are now facing serious problems. No one really understands how the new W-8Ben system works since they have replaced the one form with 4 or 5 related forms that no one really knows how to use. The payors face serious penalties if they get it wrong. So most payors have decided to refuse to open accounts for anyone who cannot execute a W-9. Again, only taxable individuals and entities can issue a W-9.

Because of this it has become very difficult for non-residents to use their US bank accounts to receive funds from US payors. That means setting up accounts with PayPal, Stripe, Amazon, Shopify, etc. will be impossible with a US LLC treated as a ‘disregarded entity’.

Our solutions:

For those non-residents who do not need to receive funds from US payors, the Disregarded LLC is still fine. Nothing to worry about.

For those receiving money from US payors, we need a more sophisticated structure. We will establish a US LLC which then elects to be a ‘taxable association’ (that is an entity that will be taxed separately like a C Corporation). This Taxable US LLC will act as a Payment Agent for a non-resident business with a written agency agreement to resell non-resident goods and services in the USA. 90% percent of the gross income goes to the foreign provider (with appropriate W-8Ben — that will be very easy), and all operating expenses will come out of the 10% agency fee — there should be little or no taxes. A second US LLC can be established to act as a ‘disregarded entity’, and the funds can go from the Taxable US LLC to this Non-Taxable US LLC.

This solution is simple and easy to implement. In fact old Disregarded LLCs can be converted to “Taxable Association” LLCs with little effort. Another alternative is to set up a second US LLC to be the Payment Agent that then transfers the 90% to the original company.

The only downside is that there is now a requirement to file an annual tax return for the Taxable US LLC which means there is a requirement to maintain a good set of books so that the tax preparer can accurately file the tax return. There may be little or no taxes due, but failure to file a tax return can cause a lot of problems. I have always advised my clients to maintain a set of books for professional reasons, but they were not required for US tax purposes. Now they are.

So although it is not as easy as it used to be, it is still very easy.

For new clients this is the solution:

Company 1 is a US LLC electing to be a ‘taxable association’; a Taxable US LLC.

Company 2 is a US LLC electing to be a ‘disregarded entity’; a Non-Taxable US LLC.

Company 1 accepts payments on behalf of Company 2 for goods or services through Paypal, Amazon, Shopify, Stripe, etc., receives a modest commission which is used to pay transactions costs and company fees, and then pays a modest corporate tax that will probably never go above 15% of the net income.

There are of course other more complicated options that might be useful for some clients, but for most this is all that will ever be needed to setup and operate your e-commerce business in the United States of America.

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