Google - Unlimited Free Transaction Processing till 12/31
Nov 9, 2006, 2:28 pm
#16
Join Date: May 2005
Location: here
Posts: 1,832
Originally Posted by nako
It would certainly raise red flags from a tax perspective. Essentially, the IRS would want to know why thousands of dollars were earned (and subsequently spent) by a "business" -- legitimate or otherwise -- and whether those expenses were, indeed, legitimate business expenses.
The scheme is also a violation of Google's terms, in that it prohibits someone from using Checkout either to provide cash advances (which is what is being done here, in essence) or to use it without actually selling a product or merchandise.
The promotion is enough for me to sign up for my own business purposes. There's no way I'd use it in the method suggested, though, given the risks involved.
Mike
The scheme is also a violation of Google's terms, in that it prohibits someone from using Checkout either to provide cash advances (which is what is being done here, in essence) or to use it without actually selling a product or merchandise.
The promotion is enough for me to sign up for my own business purposes. There's no way I'd use it in the method suggested, though, given the risks involved.
Mike
Is this against any law? or any terms and conditions?
Nov 9, 2006, 2:57 pm
#18
Join Date: Jul 2005
Location: SFO/SEA
Programs: Amex Biz Cent, Marriott LTP, Avis PC, Hilton Owners Diamond, AS MVP
Posts: 3,380
I would also suspect that red flags would be set off for money laundering...this has all the earmarks of it. Try explaining to the IRS/DHS/DOJ that you just wanted some more airline miles 
Hell, for a non-white guy like me, it might even mean a nice extended vacation at Gitmo
Hell, for a non-white guy like me, it might even mean a nice extended vacation at Gitmo
Nov 9, 2006, 3:01 pm
#19
Join Date: May 2005
Location: here
Posts: 1,832
Originally Posted by brosnan6
I would also suspect that red flags would be set off for money laundering...this has all the earmarks of it. Try explaining to the IRS/DHS/DOJ that you just wanted some more airline miles Hell, for a non-white guy like me, it might even mean a nice extended vacation at Gitmo
Hell, for a non-white guy like me, it might even mean a nice extended vacation at GitmoThis is money laundering, but you are laundering clean money. Is that really against the law? You could tell them exactly what you were doing; why would they care?
Nov 9, 2006, 3:42 pm
#20
Join Date: Aug 2001
Location: Reno, Nevada
Posts: 7,368
Originally Posted by martian
Well, it seems you could just do this with a close friend or spouse. Both of you sign up. You sell you spouse a $10000 massage. She pays you using her credit card, but then is not satisfied and wants the money back. In your terms and conditions you can only refund services by check after 14 days, so then you write her a check for $10000 and you are even and have no tax liabilities, right? Then do the same thing in reverse.
Is this against any law? or any terms and conditions?
Is this against any law? or any terms and conditions?
As for whether it's a violation of the law, I don't know. I don't figure it is, but again, I bet that a business running zero profit (because it keeps selling merchandise, then refunding the money) is going to raise a huge red flag with the IRS.
Mike
Nov 9, 2006, 5:46 pm
#21
Join Date: Nov 2002
Posts: 920
Originally Posted by brosnan6
I would also suspect that red flags would be set off for money laundering...this has all the earmarks of it. Try explaining to the IRS/DHS/DOJ that you just wanted some more airline miles Hell, for a non-white guy like me, it might even mean a nice extended vacation at Gitmo
Hell, for a non-white guy like me, it might even mean a nice extended vacation at GitmoIsnt money laundering when you "launder" dirty money made from illegal means? So when it is "cleaned" or passed thru a legal third party it is useable?
Where is the money laundering part in this? Its your own money. An unsavvy investigator might just think you are an idiot for buying back your own money.
Ken in Phx
Nov 9, 2006, 5:57 pm
#22
Join Date: Jul 2005
Location: SFO/SEA
Programs: Amex Biz Cent, Marriott LTP, Avis PC, Hilton Owners Diamond, AS MVP
Posts: 3,380
Originally Posted by Ken in Phx
Isnt money laundering when you "launder" dirty money made from illegal means? So when it is "cleaned" or passed thru a legal third party it is useable?
Where is the money laundering part in this? Its your own money. An unsavvy investigator might just think you are an idiot for buying back your own money.
Ken in Phx
Where is the money laundering part in this? Its your own money. An unsavvy investigator might just think you are an idiot for buying back your own money.
Ken in Phx
Nov 10, 2006, 1:07 pm
#23
Join Date: Dec 2005
Location: Detroit
Programs: Northwest Platinum
Posts: 1,533
If the IRS were to be notified of your actions (especially if we're dealing with 10,000+ dollars), you can bet you would be put on the short list for an audit. An audit is not fun, so I would recommend against doing this.
Nov 10, 2006, 1:12 pm
#24
Join Date: May 2005
Location: here
Posts: 1,832
Originally Posted by sany2
If the IRS were to be notified of your actions (especially if we're dealing with 10,000+ dollars), you can bet you would be put on the short list for an audit. An audit is not fun, so I would recommend against doing this.
That all depends on how many miles you can cycle through this I suppose. I am glad I don't have a $100k limit on my Aadvatage card, or else I would be tempted to push through 10 transactions to get lifetime status and a million miles. Worth an audit? maybe
Nov 10, 2006, 1:55 pm
#25
Join Date: Jul 2004
Programs: CO Gold; SPG Gold***; AvisFirst;
Posts: 3,970
Originally Posted by sany2
If the IRS were to be notified of your actions (especially if we're dealing with 10,000+ dollars), you can bet you would be put on the short list for an audit. An audit is not fun, so I would recommend against doing this.
Nov 14, 2006, 9:25 pm
#26
Join Date: May 2005
Location: here
Posts: 1,832
For those still interested in this topic, I came across the following post on FatWallet:
link here
Recently, I experimented with a few large transactions with a friend. As a result, Google called me with questions. They asked me to verify identity, what products were sold, and how the transactions took place. I was honest with them, and told them I was selling itmes to a friend, but because of the absence of transaction fees, we decided to inflate the prices and get more credit card points out of it. She had absolutely no problem with that. She continued to ask me questions about how satisfied I was with the system, would I use it again, etc. I told her that I would certainly use it again if they did not have a problem with me charging large amounts for small items. The person I spoke with likely just a phone rep rather than someone with the authority to interpret the terms of service, but nonetheless, she gave me the ok on the transactions, and encouraged me to continue using Google Payments.
Nov 14, 2006, 10:57 pm
#29
Join Date: Mar 2005
Posts: 82
First, I just set up an account, and I tried purchasing something from myself. The system realized this and didn't allow the transaction to go through.
Second, even if you could purchase from yourself I don't see how this would trigger an audit. Assuming you were a business operating as a sole proprietorship, any earnings/expenses from the business would pass through your taxes on via a schedule C. Your revenue would be your sales, and your expenses would be your purchases...a complete wash. The IRS wouldn't care. A violation of the Google TOS would be a civil matter, and perhaps you would be liable for damages if Google took the time to sue you, but I doubt that would happen.
Third, the logic should hold true even if you purchase from a friend. He purchases from you, you purchase right back from him. Its a zero sum game, so there shouldn't be a tax effect. On that note, does anyone want to partner with me? I really want to see what Citi means by "no credit limit".
Second, even if you could purchase from yourself I don't see how this would trigger an audit. Assuming you were a business operating as a sole proprietorship, any earnings/expenses from the business would pass through your taxes on via a schedule C. Your revenue would be your sales, and your expenses would be your purchases...a complete wash. The IRS wouldn't care. A violation of the Google TOS would be a civil matter, and perhaps you would be liable for damages if Google took the time to sue you, but I doubt that would happen.
Third, the logic should hold true even if you purchase from a friend. He purchases from you, you purchase right back from him. Its a zero sum game, so there shouldn't be a tax effect. On that note, does anyone want to partner with me? I really want to see what Citi means by "no credit limit".
Nov 14, 2006, 11:02 pm
#30
Join Date: May 2005
Location: here
Posts: 1,832
Originally Posted by wtsuppr415
First, I just set up an account, and I tried purchasing something from myself. The system realized this and didn't allow the transaction to go through.
Second, even if you could purchase from yourself I don't see how this would trigger an audit. Assuming you were a business operating as a sole proprietorship, any earnings/expenses from the business would pass through your taxes on via a schedule C. Your revenue would be your sales, and your expenses would be your purchases...a complete wash. The IRS wouldn't care. A violation of the Google TOS would be a civil matter, and perhaps you would be liable for damages if Google took the time to sue you, but I doubt that would happen.
Third, the logic should hold true even if you purchase from a friend. He purchases from you, you purchase right back from him. Its a zero sum game, so there shouldn't be a tax effect. On that note, does anyone want to partner with me? I really want to see what Citi means by "no credit limit".
Second, even if you could purchase from yourself I don't see how this would trigger an audit. Assuming you were a business operating as a sole proprietorship, any earnings/expenses from the business would pass through your taxes on via a schedule C. Your revenue would be your sales, and your expenses would be your purchases...a complete wash. The IRS wouldn't care. A violation of the Google TOS would be a civil matter, and perhaps you would be liable for damages if Google took the time to sue you, but I doubt that would happen.
Third, the logic should hold true even if you purchase from a friend. He purchases from you, you purchase right back from him. Its a zero sum game, so there shouldn't be a tax effect. On that note, does anyone want to partner with me? I really want to see what Citi means by "no credit limit".
You only have 2 posts, so for all I/we know you could be the same person that keeps telling me that a Nigerian president want to transfer one million dolalrs into my bank account
Welcome to FT by the way.