Owning a business and the IRS.

[justalayman]

The shares have to have a determinable value to increase my assets significantly. Without them being actively traded they are taken at par value, which I will set at $0.0001, as standard practice. The total value of my founder's 8,000,000 shares is $800. If the government wants to tax me on my $800 worth of assets, I'm fine with that.
Are you familiar with LBO's at all?

Thanks,
Grant

what does a leveraged buyout have to do with you attempting to commit fraud?

 

[FlyingRon]

The shares have to have a determinable value to increase my assets significantly. Without them being actively traded they are taken at par value, which I will set at $0.0001, as standard practice. The total value of my founder's 8,000,000 shares is $800. If the government wants to tax me on my $800 worth of assets, I'm fine with that.
Are you familiar with LBO's at all?

Thanks,
Grant

You're not getting anywhere near an LBO. But I can tell you having formed several corporations and taking one to the point of being sold for close to 8 million I think I might know a few things about it.

However, the SSA is not going to be fooled by a single shareholder corporation no matter how rediculous you lie as to the valuation.

 

[GTC1187]

I'm aware that this is not an LBO, I'm merely using that as an example. I'm trying to convey that I may be doing something unconventional, but by no means is it fraudulent.
I don't see why the SSA would have a problem with what I'm doing at all. If this Corp were for some reason to become much more profitable than my benefits and allowed income go, I would cease to accept the benefits.

 

[GTC1187]

My question was just if I could make my allowed income from running my own business, since I am unable to work a normal job. My helper and I could do it I think. I am just worried that I'll make a few more dollars than I need and that it will destroy me. By no means am I complaining about the about of money I will be making, as 32k a year is enough to pay my bills, and maybe even save something. But with 12K of that being money I have to earn somehow, I thought my helper and I could run my business and everything would be fine. I don't want to take advantage of the government, I just don't want to live on the street or have to eat fancy feast.

 

[GTC1187]

I mean really now, how likely is it someone like me could start a profitable business anyhow?

 

[justalayman]

My question was just if I could make my allowed income from running my own business, since I am unable to work a normal job. My helper and I could do it I think. I am just worried that I'll make a few more dollars than I need and that it will destroy me. By no means am I complaining about the about of money I will be making, as 32k a year is enough to pay my bills, and maybe even save something. But with 12K of that being money I have to earn somehow, I thought my helper and I could run my business and everything would be fine. I don't want to take advantage of the government, I just don't want to live on the street or have to eat fancy feast.

You keep mentioning "a normal job". I happen to know several people whose "normal job" is to design websites, deal with systems administration where all they do is type on their computer, and several others that their "normal job" is to type on a computer. Just what are you considering to be a "normal job" that somehow doesn't include what you are considering doing with this business?

 

[FlyingRon]

Do you understand "normal job" has nothing to do with it.
There are two major criteria for SSI: Disability and Limited Means.
Yes you are disabled.
However if you make more than the threshold (or have substantial assets) you're not going to meet the limited means test.

Plenty of people are disabled and still have found a way to make more than enough to get them off SSI. For example, blindness is an automatic in the disability front of SSI but I know several people who make quite a nice living being totally blind.

 

[LdiJ]

The shares have to have a determinable value to increase my assets significantly. Without them being actively traded they are taken at par value, which I will set at $0.0001, as standard practice. The total value of my founder's 8,000,000 shares is $800. If the government wants to tax me on my $800 worth of assets, I'm fine with that.
Are you familiar with LBO's at all?

Thanks,
Grant

You really do NOT get it. The MONEY sitting in the corporate bank account which you totally control as the sole shareholder is an ASSET of yours. The corporation will pay tax on its profits. When you eventually realize that its foolish not to make use of the money, you will be taxed on it AGAIN.

So not only are you trying to perpetuate fraud, but you are being foolish about it at the same time.

 

[tranquility]

I am uncertain as to if the OP can arrange things to keep the disability benefits. As a legal matter, I don't see the creation of a C-corp as fraud or anything but a legal manipulation of facts to create a benefit. Is that what SSDI if for? No. But, all laws have to be written for the real world and all the world required is to follow the law, not to guess at the law's intent and achieve the intent.

Now, will the plan work? I don't think so. There is a lot more to running a corporation than just filing to have a corporation. I'm not going through all the problems here, but everyone wants money they can control, but not have to be considered the owner of. The plan doesn't happen much because the facts have to be extremely correct for it to work. I have no idea of the OPs plan is going to work. I suspect not, but don't know the business model.

However, there is a program called BOND where the $12K is not a cliff. It costs $1 for each $2 earned over the amount. It is designed just for this situation, to help disabled on benefits get a job which pays them a living wage. It's not a good solution if the OP just wanted to continue to have me pay extra to him forever, but it would certainly solve his purported problem.

 

[LdiJ]

I am uncertain as to if the OP can arrange things to keep the disability benefits. As a legal matter, I don't see the creation of a C-corp as fraud or anything but a legal manipulation of facts to create a benefit. Is that what SSDI if for? No. But, all laws have to be written for the real world and all the world required is to follow the law, not to guess at the law's intent and achieve the intent.

Now, will the plan work? I don't think so. There is a lot more to running a corporation than just filing to have a corporation. I'm not going through all the problems here, but everyone wants money they can control, but not have to be considered the owner of. The plan doesn't happen much because the facts have to be extremely correct for it to work. I have no idea of the OPs plan is going to work. I suspect not, but don't know the business model.

However, there is a program called BOND where the $12K is not a cliff. It costs $1 for each $2 earned over the amount. It is designed just for this situation, to help disabled on benefits get a job which pays them a living wage. It's not a good solution if the OP just wanted to continue to have me pay extra to him forever, but it would certainly solve his purported problem.

Which is even more reason why he should not have a reason to attempt to hide income.

 

[tranquility]

Which is even more reason why he should not have a reason to attempt to hide income.

Let's put on your tax professional hat.

The "income" we're talking about is income to the OP which will affect benefits.

Is there a difference between that income and income in the C-corp?

If there is not a distribution from the C-corp, is that "hiding" income? Is the lack of distribution, under our facts, illegal in any way?

 

[GTC1187]

I'm not sure what it is that consistently has me laughing at some of these responses, you people remind me of Andy Warhol trying to be popular on here by blindly attacking others who showed nothing but respect to this board that is supposed to serve as legal advice.
Thanks to tranquility for being reasonable as I and even more level headed.
Remember, "Nothing is exciting, nothing is sexy, and nothing is not embarrassing!"
Think about it.

 

[FlyingRon]

I'm not sure what it is that consistently has me laughing at some of these responses, you people remind me of Andy Warhol trying to be popular on here by blindly attacking others who showed nothing but respect to this board that is supposed to serve as legal advice.
Thanks to tranquility for being reasonable as I and even more level headed.
Remember, "Nothing is exciting, nothing is sexy, and nothing is not embarrassing!"
Think about it.

And you have done nothing other than hurl insults at those who've tried to give you positive information. You've been told the rules. You've been told what you are doing is contrary to the conditions on receiving SSI. You've been told ways you CAN work within the law. But you're determined to continue to try to try to invent further ways to perpetuate the fraud you're invisioning while throwing out nonsense like the LBO which while intended to be an insult against us just makes us all wonder if the nature of your disability is cognitive.

 

[LdiJ]

Let's put on your tax professional hat.

The "income" we're talking about is income to the OP which will affect benefits.

Is there a difference between that income and income in the C-corp?

If there is not a distribution from the C-corp, is that "hiding" income? Is the lack of distribution, under our facts, illegal in any way?

In this particular instance, because this is all designed to avoid losing any SSDI benefits, there is not just income to consider. There is also "means testing".

Certainly yes, from a tax standpoint his only "income" would be his wages...and there is no requirement that all profits of a C-corp be distributed to the shareholders.

However, when is is the sole owner of a corporation, his means tests are going to include any cash sitting in the bank of the corporation, because any valuation that Social Security puts on those shares will be based, in great part, on the assets of the corporation, particularly the cash.

And...while there are times when a C-corp makes sense, this really is not one of them from a financial standpoint either.

 

[OHRoadwarrior]

Just a note we were talking SSI, not SSDI. It became changed in the conversation.