I'd like some opinion on this. I've been in a discussion with a few people concerning both the legal and ethical nature of a certain situation. I think it's both illegal and morally reprehensible, but quite of few others have disagreed with me.

Because I'm not an idiot I'm not going to give names, places, companies out. Therefore I have written out the details in such a way to give the full scope of the issue without revealing anything.


A friend's current employer offered her an overseas assignment in [a country], but told her that they would not pay her a salary while she would be there. Instead, her employer would cover the cost of her housing, her food, her car, and other incidental expenses, as well as paying for her to take an annual vacation and also paying for her children to attend an undergraduate program. Additionally, she would get a part time gardener, housekeeper and cook paid for through the same reimbursement system.

The company has told her, however, that she wouldn't be allowed to have a personal bank account in [a country] to handle the reimbursement funds, but that her employer would keep a joint account for her in the United States through which all of her household expenses (and the company's payment of them) would be processed as "reimbursements" on her behalf (by an account in her and the company name). She was told to agree to not represent to others that she will be paid for her services while in [a country], and that she is not to discuss the arrangement of the company paying her expenses with her personal financial advisors, nor with friends, nor with family, nor even with other employees who work in similar positions. Nor is she to report the reimbursements to either the IRS or Swiss tax authorities.

Does this sound kosher to any of you?

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The last sentence is problematic since she doesn't have a choice with regard to reporting "income" which the "reimbursements" are. Failure to report would be a violation of statute, which cannot be enforced via a contract, ie. you cannot enforce a contract to commit a crime, however you can be held to be a co-conspirator if you agree to the contract, and equally guilty of the criminal activity.

It's unclear from the narrative what her employment status is. Is she a 1099 contractor or a W-2 employee for US tax purposes?

Part of the agreement is that the company she works for is to prepare her tax forms yearly.

All she gets to do is sign on the dotted line.

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Onus probandi incumbit ei qui dicit, non ei qui negat

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1984 300D "Elsa" odo reset 6/2011 147k
1983 300TD "Mitzi" ~268k OM603 powered
1995 E300 "Adelheid" 262k [Sold]

If she signs an incorrectly prepared or fraudulent return, then no. If the returns are properly prepared and accurate, then no problem.

Why does the word "mistress" pop into my mind?

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“Whatever story you're telling, it will be more interesting if, at the end you add, "and then everything burst into flames.”
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Id be looking for another job where such an offer would never be made. That deal sounds ridiculously bad. Jump into our pocket, don't get paid, allow us to control everything about your life and expenses, and oh, by the way, a little fraud on the side?

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No... it's a legit company. Well, known by the public to be reputable anyway.

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Onus probandi incumbit ei qui dicit, non ei qui negat

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1984 300D "Elsa" odo reset 6/2011 147k
1983 300TD "Mitzi" ~268k OM603 powered
1995 E300 "Adelheid" 262k [Sold]

Well, I'll add that the "reimbursement" is 6 figures plus.

__________________
Onus probandi incumbit ei qui dicit, non ei qui negat

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1984 300D "Elsa" odo reset 6/2011 147k
1983 300TD "Mitzi" ~268k OM603 powered
1995 E300 "Adelheid" 262k [Sold]

Im curious how this deal is better for the company vs just letting her handle all those details and paying her for her services in a normal fashion? sounds like a lot of personal paperwork they suddenly have.

the whole thing sounds like there is a lot of possibility of conflict over payments, purchases, ect.

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I have no idea about the legality of the plan. If I were her, I'd talk to an attorney knowledgeable in international employment law before agreeing to it. If it's legal then I don't see a problem unless there's some ethical element that is hidden below the surface.

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1982 Bluebird Wanderlodge CAT 3208--Sold 2/13

interesting, so there is only a tentative connection between what these services cost, and what the company is paying for reimbursement?

Are we talking they rent an apartment for her that costs 1000 a month, yet the company "reimburses" her 3000 a month? They won't be paying a salary to her, but in a way they will make up for it by overpaying for these services?

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Once, way back in the distant past, the POTUS was known as "reputable" .

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“Whatever story you're telling, it will be more interesting if, at the end you add, "and then everything burst into flames.”
― Brian P. Cleary, You Oughta Know By Now

In a round about way, yes.

They reimburse her for everything, including housing, food, car payments, gas money, and tuition for her kids to attend any university in the world.

She gets money deposited into the account for personal gifts, and other recreation. Which she doesn't have to specify in advance or record later.

The idea is that she isn't getting a salary, just merely "reimbursed" for her work.

__________________
Onus probandi incumbit ei qui dicit, non ei qui negat

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1984 300D "Elsa" odo reset 6/2011 147k
1983 300TD "Mitzi" ~268k OM603 powered
1995 E300 "Adelheid" 262k [Sold]

For me one issue is that she is required to put an air of not being paid. She's to act and sound as if she is a volunteer.

Neither is she to discuss or mention any specifics about her income. I've read the plan and they make it quite clear that you are to redirect any discussion of your income.

__________________
Onus probandi incumbit ei qui dicit, non ei qui negat

I recondition w123/w126/w124/w140/r107/r129/ steering boxes!


1984 300D "Elsa" odo reset 6/2011 147k
1983 300TD "Mitzi" ~268k OM603 powered
1995 E300 "Adelheid" 262k [Sold]

The idea is for her to be able to live a normal life without worry for money. That way her employer keeps her free to do work.

At the same time they want her to seem like a volunteer. It's important for the image they want.

__________________
Onus probandi incumbit ei qui dicit, non ei qui negat

I recondition w123/w126/w124/w140/r107/r129/ steering boxes!


1984 300D "Elsa" odo reset 6/2011 147k
1983 300TD "Mitzi" ~268k OM603 powered
1995 E300 "Adelheid" 262k [Sold]