I understand the gist of the Foreign Earned Income Exclusion, which would allow me to earn up to $85,700 in 2007 free of US federal income tax. Additionally, I know that if I was a resident of a state with no state income tax before leaving the US, I would also be free of state income tax obligations.

Next, my thinking is that if I form a corporation in a tax haven country, have my employer(s) and/or client(s) pay that company, and then pay myself as an employee of that (non-US) company, I can also legally avoid paying FICA & Medicare or Self-Employment Tax.

Finally, by taking care not to become "resident for tax purposes" in any other country (by never staying in any country long enough in any given year), I hope to also be free of any tax liability to any foreign country.

Essentially, I envision dividing my time every year between 2 or more countries - some countries allow you to stay up to 182 days/year without becoming resident for tax purposes, others allow only 90 days/year, or some other number. In this way I hope to be able to pay myself up to $85,700 this year totally free of income tax.

Questions:

1) Is the above scenario possible to do 100% LEGALLY? I don't even want to be in a "gray area" - I really value my sleep. If not, why not? If so, how should I arrange my affairs in order to be 100% in compliance with all applicable laws?

2) How much money should I expect to pay every year to retain the services of a US tax attorney, maintain full compliance with the IRS, and maintain my corporation in the proper manner? If the answer is 'it depends', please outline what it depends on and provide a ballpark figure for each scenario.

3) How should I go about finding a top-notch tax attorney who has a lot of experience in the area of US expat taxation and can keep me out of trouble with the IRS? How can I be sure I'm getting someone good and honest?

In France, I'm especially vehement about paying as little as possible considering this socialist structure where excessive amounts of money are taken from people who work hard to be redistributed to the lazy RMIstes and fonctionaires who are dragging this country into the gutter. I don't mind taxes when they equal a nice, safe, quality environment; this is not the case in France!

Thanks for your thoughts.

Here is another way to start .... you are saying that you evaluate the validity/acceptability of your own actions based on your observed behavior of what other people/governments do, and estime that your actions are not observable/countable within the context of a larger world that quite obviously has severe flaws and not an insignificant number of bad-actors.

Where does this logic process end? Actions that are just short of the worst actions committed by the worst governments then become justifiable.

It is better (for all of us) to evaluate our own actions, in a local context, with self-accountability, based on a standard of some moral/ethical footing, and independent of all the bad stuff that happens around us.

Good luck to you on your adventure. If your dream becomes semi-true, you will at least have the opportunity to meet people / experience cultures from around the world, and I am sure with your curiosity and energy, you will make the most of it and learn to find more than just a small tax savings benefit.

Warmest regards, Pat

Thanks for engaging me in a civilized discussion. Sorry I couldn't understand your last sentence, as I don't know French beyond a few words, such as 'parle vous Anglais?' and 'merde'.

Hmmm...cutting in line is absolutely horrendous to me as an American. That sort of thing is just not done in the US. People being cut in front of generally will not tolerate it, and will confront you on it, therefore it generally never happens in the US. So when it happened to me and my girlfriend repeatedly while waiting in a very long line to see Mao's "Maosoleum" in Beijing, I just about lost it. I was shaking with indignation as I tried to block people from cutting in front of us.

You equate my attempt to minimize my taxes with cutting in line. I disagree. It's almost as if you didn't read my previous arguments.

First off, unlike cutting in front of people in line, minimizing my income taxes isn't going to upset or even affect anyone (unless I tell someone what I'm doing, or hope to do, like I have here - this may upset some, but I don't see how it would affect them in any real way).

If anyone's cutting in line, it's the elites of every nation, who are born into their positions of privilege and power. Think about it - there are people in every nation who are ABOVE THE LAW.

Not politicians - I'm not talking about them. Anyone who gets in trouble is by definition not above the law. The law doesn't enforce itself - it relies on people to do that. And those people are arranged in a vertical hierarchy. Someone's at the top, and it's not a president or prime minister, except in those countries with unsophisticated political systems, like Saddam Hussein's Iraq, or Hitler's Germany.

But in "democracies", there has to be some group behind the scenes whom even the politicians don't know about. For example, there are something like 16 different intelligence agencies in the US. Who knew? We only ever hear about a few of them. We've seen presidents and prime ministers get in trouble. They don't even have the power to have sex in their own home without getting in trouble.

But there are people we've never heard of, running these intelligence agencies, and the tax bureau, controlling the military, the police, the courts, the jails, the mafias and drug gangs. They can listen in to any phone call, read any e-mail, access all of your financial information and watch you from morning to night if they choose. Right? Isn't this the case? And who are they accountable to? The voters? The people? Don't make me laugh. These same people decide what to do with all the tax money we pay. Not only do they not pay income taxes themselves, they also set their own salaries and pay themselves out of our tax money, with no accountablity whatsoever.

So I, as a mere peasant with barely a clue, want to hang on to whatever little bit of money I'm able to scrape up through my labor. And the law allows me to arrange my affairs in such a way as to miminize my income taxes. Since the law is the only protection I have in this world, I will stay within it, because I know I don't have a chance in hell of getting away with something illegal. Eventually, I'd be caught. I'm smart enough to know that, and know that I am not the type who could survive even one day in jail.

As for your definitions of what is fair, they sound pretty good, but I see major holes in them. For instance, in the first definition, what YOU consider to be beneficial to others may not be perceived that way by your intended beneficiaries (i.e., giving un-asked-for advice, or giving someone an impromptu shoulder massage). What you consider to be non-detrimental to others may likewise not be perceived that way by others (i.e., smoking in public). So we're back to "no two people have the same exact ideas about what is ethical or moral).

Also, by this definition, entertainment of any sort would seem to be "unfair", as watching a sporting event or enjoying a quality porno flick (is that an oxymoron?) can hardly be anyone's best, dedicated effort intended to benefit self, family AND community. Surely, there must be other activities which you could enjoy which would also benefit your family and the community.

Your second definition is even more problematic. If everyone used birth control, the human race would die out within a hundred years or so. But you don't consider birth control unfair, do you? Similarly, while charity is considered a good thing, you wouldn't want everyone giving all their money to charities - the world as we know it would come to a halt.

I'm sure you have done things considered highly immoral by billions of people (and probably warranting the death penalty). Ever had sex before or outside of marriage? Ever committed "blasphemy"?

So I guess we can agree on one thing - what is ethical, moral or fair is entirely in the eye of the beholder. I can look my ugly mug in the mirror every day and feel just fine about legally minimizing my taxes, while you wouldn't be able to. Perhaps you even pay more taxes than you're required to because it makes you feel more righteous - I don't know.

On the other hand, perhaps one is married and cheating on her/his spouse, telling lies now and then to keep him/her from finding out. That's not illegal in Western countries, and plenty of people are able to look themselves in the mirror every morning while doing that, but I couldn't.

I guess I can't persuade you that what I want to do isn't unethical, immoral or unfair. But I hope I've at least shown you that it is not OBJECTIVELY so.

Thanks for your response. I see that you like a good conversation.

In a forum that is typically otherwise devoted to carte de séjour and préfecture fonctionnaire misery-story swapping, you and I (and anyone who cares to join) have engaged in a somewhat philosophical adventure, to which, as you have clearly stated, there is not one answer.

You have posed, quite possibly, one of the few important questions (or perhaps THE important question) that we can assess in our lives, to wit:

WHAT IS FAIR?

I don't know.

Perhaps a starting point looks like this ...

What is fair is that which, when I view my ugly mug in the mirror each morning, the collection of actions and inactions that I will perform this day that I honestly assess as being my best and dedicated efforts that are intended to benefit: myself, my family, my community (small and large), and at the same time I honestly asses as not being to the (relatively significant) detriment of my community (in the large sense), my neighbors, my family, nor myself.

Another approah:

That which is fair, is the set of actions that I take, that, if copied, multiplied, and cloned by everyone else in my family and community, and when honestly assessed for the future outcomes, I like the future world that I see.

And let's take a case-study using these two postulates: is it fair for me to cut the line at the supermarket? (after all, it's a very french-y thing to do)

Using approach one: I have to say it doesn't seem like a significant detriment to anyone else (hey, what's a few more minutes to them anyway?), and I get home to my family a little earlier .. so it provides some benefit to me. I am comfortable to at least say: it doesn't seem unfair.

Using approach two: I really hate the fricking thought of a mélée at the grocery store every time because everyone else mimicks my behavior and tries to cut the line. OK ... this behavior is unfair.

So, Mr. Tom: I think you are trying to cut the line at the grocery store. It is not something that I would call UNFAIR by approach one, but does result in a pretty ugly world view to me, should everyone else mimick your intended behavior.

Having said all that, cutting the line is a national sport in France ... so maybe you should move to France from time to time, just to feel at home.

Et puis, excusez-moi si je vous dis quelque chose impoli de temps en temps.

I hear what you're saying, and I'm sorry to have offended your moral and ethical standards.

I guess no two people have exactly the same idea of what is moral or ethical. That's why we have laws - we can disagree on ethics and morals, but we all have to follow the same laws, or else pay the penalty when we're caught.

I feel I have to defend my own, somewhat different sense of what is moral/ethical, and I will try to do so without causing further offense.

First off, I don't want to do anything "quasi-legal", as you put it. I stated very clearly that I want to stay 100% within the law, and I mean that.

Everyone is free to arrange their personal and business affairs within the letter of the law in order to minimize or eliminate certain taxes, and that includes you.

It seems you don't mind paying half of your earnings in income taxes. Perhaps you earn a huge salary, or live off of a large pool of wealth, so the taxes you pay don't affect your standard of living or your sense of financial security. Maybe you're all set in life (financially). Or maybe you just think it's illegal or immoral to not pay income taxes. But suppose that after paying half of your income in taxes you think it is obscene for the government to then put a 100% tax on petrol. You don't want to pay this tax. Easy - you just don't drive a car. You can use public transportation or ride a bicycle. You have arranged your affairs to avoid a tax. Are you unethical or immoral?

It's also not my hope to "drink at the public fountain without lifting (my) share". I understand that there are certain "public goods" which are paid for with tax money. But just how much is my share? If I don't have children (and I don't intend to), isn't my "share" less than someone who sends a few kids to public school? If I don't abuse drugs or drive drunk, and therefore don't often end up in the emergency room (or cause others to), isn't my share less? If I don't vandalize public property by spraying grafitti, or create more work for the police by committing violent crimes, isn't my share less than someone who does these things? If my father earned an above average salary and paid far more than his share in taxes, is my share still the same as someone whose father lived on welfare and sold drugs to kids?

And is my share not paid through all the other taxes I pay, such as sales taxes, and taxes on petrol, utilities, cell-phone, road-tolls, airport fees, etc.? How can you be sure just who has paid his or her share? What I'm saying is that it's not so easy to know just how much each person "owes" to society and that I DO pay into the system, in many ways. I think it would be quite impossible to NOT pay into the system.

As you know, we live in an unfair world. People are born into greatly different circumstances - with different strengths and weaknesses, different parents, different amounts of wealth to inherit.

There are plenty of people on this earth who make upwards of $10,000,000 EVERY YEAR. Is that fair? Ethical? Moral? I'm sure I could be making that much too, if I had the right parents, or went to the right schools, or had the right personality traits (outgoing, extroverted, engergetic, robust health, great charisma and people skills, etc.), and/or a higher IQ.

Is it fair, ethical or moral that every government on earth is run by a small elite group of liars which, just because they were born into the right families, went to some special school and made the right connections, get to squander most of the money they extort from us on weapons and pork-barrel projects, further enriching each other while neglecting the peoples' current and future well-being?

Is it fair that in spite of the vast amount of money we pay to our governments every year, there are still so many poor, homeless, drug-addicts, alcoholics, unemployed, etc., to say nothing of potholes and blighted, dangerous grafitti-covered neighborhoods? Is it fair that so many kids go to such rotten schools, in such unsafe neighborhoods, all but dooming them to a life of poverty and violence?

Is it fair that governments allow huge tobacco companies to market their highly-addictive, heart disease and cancer causing products to kids - the only people naive enough to start smoking, just so they can have a steady, lifetime supply of addicts who have no choice but to pay the huge taxes on cigarettes?

Is it fair that in spite of all the taxes we pay, we still have to feel fear when walking down a dark street or riding the subway - fear that some thug who's been in and out of prison a million times is going to beat, rob, rape or kill us? Is it fair that after a lifetime of hard work and paying massive taxes, most of us will live our last days in less than dignified circumstances, and die a horrifying, painful death?

It really makes you wonder - where does all our tax money go? The truth is, we'll never really know. We are mere peasants, with almost no power. All we know is that once we pay it, it's gone. Perhaps you have more faith in government than the facts warrant?

Or is it possible that your sense of outrage that I want to minimize my income taxes stems from a deep unhappiness or fear regarding your own financial situation? If so, instead of being angry that the world is unfair and others are doing better than you, why not do whatever you can, WITHIN THE LIMITS OF THE LAW, to better your financial situation? Why not learn the laws and try to arrange your affairs to make more money, lower your tax burden, and save enough money to feel financially secure?

That's all I'm trying to do. Is that immoral?

As you embark on this great adventure, I assume you will be using transportation, energy, and telecommunication networks, that in large part, were funded by local citizens, small and large businesses all paying taxes (of one sort or another) and contributing to the common public good.

Now, you request additional assistance from all of us that pay taxes to assist you in identifying a quasi-legal scheme so that you can continue to drink at the public fountain without lifting your share.

You indicated that you like to sleep well at night so you do not want to do anything illegal.

I submit for your consideration: How well will you sleep when what you are proposing does not meet a fundamental moral, ethical standard?

You are obviously intelligent, energetic and motivated. I request you to stop pulling, and help the rest of us do a little of the pushing from time to time.

Thanks for your consideration.

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