5 ms·

There’s plenty of virtual office / forwarding address services, but claiming you live at one when you don’t for a pay gain risks (1) fraud against your employer

by jsty 4y ago

There’s plenty of virtual office / forwarding address services, but claiming you live at one when you don’t for a pay gain risks (1) fraud against your employer; and (2) tax fraud (if eg in a different city / state / country).

ericmay 4y ago
What’s the definition of where one lives? For example what if you wanted the NYC salary and you rented out a bunk bed for $50/month and traveled around the country while working remote? Cities definitely don’t have the resources to track you down and I’m not sure employers especially larger ones have any mechanisms in place to keep track. I’m not advocating for this just surprised it’s not more well known. Though I suspect it’s common and just not talked about much for obvious reasons. Certainly there are also jobs that require you to physically work from a given state as well for example. How do so called digital nomads handle it from a tax perspective? Do they maintain a residence for tax purposes? Is that any different?
- FartyMcFarter 4y ago
  Whether something is illegal is different from whether it's easy to enforce. It's hard to say how likely they are to enforce this, but you're definitely taking a risk by pretending to live somewhere. What makes it more problematic is that it's not just tax offices that would be interested in finding out. The company you work at may also get in trouble with the tax office as they pay employment taxes too, so they are probably interested in the fact that you're deceiving them. If your manager suspects you're not being truthful and follows up with HR this could easily get you in trouble. As remote work becomes more popular, it becomes more likely that companies will pay attention to this. Knowing all of that, I'd find it quite hard to justify playing these games. It just seems like asking for trouble, with a pretty good chance of getting it.
  - ericmay 4y ago
    Legality is different than enforcement, but the two aren't totally separate. For example, it's de facto not illegal to drive 5mph over the speed limit on the highway. No police officer will pull you over for that unless they have some other prior reason. So in that sense, lack of enforcement has made the practice legal.
- LaserToy 4y ago
  In US, it is relatively easy to commit fraud. The question is: what happens if you get caught. Is it a slap on your wrist or a catastrophically failure (termination, prison time) You can, for example, get employed at 10 companies and then outsource all the work (someone got caught doing it and it was in the news). If you want to cheat, you can, but you probably should not be discussing it on hacker news.
- ghaff 4y ago
  >How do so called digital nomads handle it from a tax perspective? Do they maintain a residence for tax purposes? They probably have a "permanent address" at a friend's house or through some service. And it's probably technically fraud. That said, the US is not really setup for citizens not to have a permanent address in one state--even if just for things like driver's licenses. You can do things by the books for tax purposes but I suspect a lot of people moving around don't.
  - Mountain_Skies 4y ago
    Wonder if it's meant to be like it is with professional sports, where players on a visiting team often have to pay taxes in the state of the home team.
- RestlessMind 4y ago
  > What’s the definition of where one lives? https://www.annuity.org/personal-finance/taxes/residency-requirements-by-state/ https://www.annuity.org/personal-finance/taxes/residency-req... Ultimately it comes down laws, regulations and taxes. Company wants to make it easy for itself to deal with that.
bojangleslover 4y ago
(1) and (2) are separate. The IRS/state department of revenue won't care, and they won't tell your employer. Say you live in HCOL, actually live in LCOL, and at the year claim a refund from HCOL and file properly with LCOL. You can just say plans changed and you moved in the case of an audit. You could tell your employer the same thing. Much harder to dock someone's salary once they've started working.
- RestlessMind 4y ago
  > The IRS/state department of revenue won't care, and they won't tell your employer California FTB very much cares if you are collecting SV salary but are not paying CA taxes by living in LCOL areas. Unless you are a CPA, please do not spread lies.
  - jjeaff 4y ago
    The state of California can only tax you for the time you lived in California. Now, they may well throw a fit and try to claim you don't live out of state and use your employer information to substantiate it. But legally, they would not be able to keep you from getting a refund and paying elsewhere.
    - Dracophoenix 4y ago
      > The state of California can only tax you for the time you lived in California. https://www.americanbar.org/groups/business_law/publications/blt/2016/12/08_wood/ https://www.americanbar.org/groups/business_law/publications...
      - jjeaff 4y ago
        That article is mostly about business income or investment income like sale of real estate in California. It does not apply to people living outside of California and earning wages from California based companies. Imagine all the Tesla employees in Texas and other states. They would all be paying California income tax, which is of course not the case.

by jsty 4y ago

ericmay 4y ago

What’s the definition of where one lives? For example what if you wanted the NYC salary and you rented out a bunk bed for $50/month and traveled around the country while working remote? Cities definitely don’t have the resources to track you down and I’m not sure employers especially larger ones have any mechanisms in place to keep track. I’m not advocating for this just surprised it’s not more well known. Though I suspect it’s common and just not talked about much for obvious reasons. Certainly there are also jobs that require you to physically work from a given state as well for example. How do so called digital nomads handle it from a tax perspective? Do they maintain a residence for tax purposes? Is that any different?

FartyMcFarter 4y ago
Whether something is illegal is different from whether it's easy to enforce. It's hard to say how likely they are to enforce this, but you're definitely taking a risk by pretending to live somewhere. What makes it more problematic is that it's not just tax offices that would be interested in finding out. The company you work at may also get in trouble with the tax office as they pay employment taxes too, so they are probably interested in the fact that you're deceiving them. If your manager suspects you're not being truthful and follows up with HR this could easily get you in trouble. As remote work becomes more popular, it becomes more likely that companies will pay attention to this. Knowing all of that, I'd find it quite hard to justify playing these games. It just seems like asking for trouble, with a pretty good chance of getting it.
- ericmay 4y ago
  Legality is different than enforcement, but the two aren't totally separate. For example, it's de facto not illegal to drive 5mph over the speed limit on the highway. No police officer will pull you over for that unless they have some other prior reason. So in that sense, lack of enforcement has made the practice legal.
LaserToy 4y ago
In US, it is relatively easy to commit fraud. The question is: what happens if you get caught. Is it a slap on your wrist or a catastrophically failure (termination, prison time) You can, for example, get employed at 10 companies and then outsource all the work (someone got caught doing it and it was in the news). If you want to cheat, you can, but you probably should not be discussing it on hacker news.
ghaff 4y ago
>How do so called digital nomads handle it from a tax perspective? Do they maintain a residence for tax purposes? They probably have a "permanent address" at a friend's house or through some service. And it's probably technically fraud. That said, the US is not really setup for citizens not to have a permanent address in one state--even if just for things like driver's licenses. You can do things by the books for tax purposes but I suspect a lot of people moving around don't.
- Mountain_Skies 4y ago
  Wonder if it's meant to be like it is with professional sports, where players on a visiting team often have to pay taxes in the state of the home team.
RestlessMind 4y ago
> What’s the definition of where one lives? https://www.annuity.org/personal-finance/taxes/residency-requirements-by-state/ https://www.annuity.org/personal-finance/taxes/residency-req... Ultimately it comes down laws, regulations and taxes. Company wants to make it easy for itself to deal with that.

bojangleslover 4y ago

(1) and (2) are separate. The IRS/state department of revenue won't care, and they won't tell your employer. Say you live in HCOL, actually live in LCOL, and at the year claim a refund from HCOL and file properly with LCOL. You can just say plans changed and you moved in the case of an audit. You could tell your employer the same thing. Much harder to dock someone's salary once they've started working.

RestlessMind 4y ago
> The IRS/state department of revenue won't care, and they won't tell your employer California FTB very much cares if you are collecting SV salary but are not paying CA taxes by living in LCOL areas. Unless you are a CPA, please do not spread lies.
- jjeaff 4y ago
  The state of California can only tax you for the time you lived in California. Now, they may well throw a fit and try to claim you don't live out of state and use your employer information to substantiate it. But legally, they would not be able to keep you from getting a refund and paying elsewhere.
  - Dracophoenix 4y ago
    > The state of California can only tax you for the time you lived in California. https://www.americanbar.org/groups/business_law/publications/blt/2016/12/08_wood/ https://www.americanbar.org/groups/business_law/publications...
    - jjeaff 4y ago
      That article is mostly about business income or investment income like sale of real estate in California. It does not apply to people living outside of California and earning wages from California based companies. Imagine all the Tesla employees in Texas and other states. They would all be paying California income tax, which is of course not the case.