China - American business.....taxes in USA?

[Tim Noteworthy]

I already registered an LLC in Deleware in case doing that is something I need to do, so we can put Deleware as my state...except my bank account (was established) and (my residence in the US was) in Idaho.

Now the meat:

I recently moved from America to China to help a Chinese business out. The business collects virtual gold from online games and then sells it via e-bay style sites to game lovers for real $. We use my American paypal account to process the $ transactions. The money then goes from paypal to my US bank account. When a few thousand dollars builds up, we wire it to a Chinese bank account and withdraw it here.

Will forming an official company in America, then registering a branch of that company in China, and using a US business bank account help if there is a problem with the current set up?

We do zero business in America. No one in America is getting paid. But tons of money is running through my American accounts. But we must use the American paypal account (and therefore American bank account) because it is Americans and Europeans who we do business with, and a Chinese paypal account would not be able to be used.

Am I going to get busted by some TAX people? Is there a better way to do this?

 

[tranquility]

Just because your butt is in a chair in China, doesn't mean you aren't doing business in the U.S.

I'd have to study more to determine to what extent, but it appears you have a substantial liability to U.S. tax officials. I suspect other states and countries would be interested as well. Also, if you are sending money through your account for someone else, you must register with the government as a money service business.