IRS Sends Early Christmas Gift to Software Industry
The Internal Revenue Service published IRS Notice 2006-76 August 29, 2006. This early Christmas gift to the software industry confirms the application of Section 937(b) and Temp. Tresuary Regulation Section 1.937-2T. More particularly, a software developer can incorporate in the United States Virgin Islands and receive very lucrative tax benefits. The U.S. Virgin Islands EDC program allows beneficiary to only pay 10% of their customary federal income tax liability and be exempt from all other taxes. What a deal!
The IRS goes further in its notice to provide that the software can be loaded onto compact discs in the territory and shipped to customers in the United States and throughout the world or downloaded by the customers from the developers server in the territory.
For more information on the U.S. Virgin Islands Economic Development Program, please contact Tom Bolt, Tom Bolt & Associates, P.C., Attorneys at Law, Corporate Place, 5600 Royal Dane Mall, St. Thomas, VI 00802-6410 (www.vilaw.com) [Email: tbolt@vilaw.com/Telephone (340) 774-2944]
What a deal
Meanwhile, ordinary Americans, including most employee software developers, pay extraordinary income taxes...for military adventures abroad and no health care. In particular, hard-working and successful software developers so stupid as to be employees are nailed with Alternative Minimum Tax.
The ethics and the financial practices of the closed-source software industry, including this clear attempt at income tax evasion, as well as failure to adhere to the requirements of the Uniform Commercial Code as regards fitness for use and fair dealing, as well as the SHAMEFUL way in which software executives have used insider trading practices to expropriate the fruits of the labor of software professionals, should be a target of a Congressional investigation.
As to the folly of believing that one can leave the status of employment and chill out in the Virgin Islands, while extracting mega bucks from customers beguiled into using some new Windows "package", I should think that this is so corrupting a process that any software professional with any decency would avoid it.
It is true that the Bush administration has been handing out goodies via the Internal Revenue Service for six years now, while punishing classes of taxpayers who did not vote for it (such as nonmilitary expatriates).
But the very idea that there is any genuine worth, any intelligence, any decency, in such an unseemly, and in my direct experience demoralizing, scramble for chump change has, in my opinion, no place in this forum.