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From: [email protected] [mailto:[email protected]]
Sent: Wednesday, June 18, 2003 9:50 AM
To: [email protected]
Subject: Re: Salesman
David - here is some fodder for your newsletter.
I will probably send the guy your way, but thought the scenario =
sufficiently interesting that it might work for the 'group'.
The client currently works as a salesman for a Canadian company selling =
products imported to Canada and 'finished' and packaged here. His =
territory is all of BC.
He has been asked to consider taking a position as sales director for =
the company in a territory that includes several of the Pacific =
Northwestern US states.
His duties would involve travelling to the States to hire local =
salesmen, as well as a minor amount of selling himself, with the =
products to be shipped from Canada.
In fact, if the endeavour is successful, they will ship from Canada to a =
staging warehouse in the US, and then distribute from there, but the =
product will always originate from Canada and they won't be holding any =
stock in the
US warehouse that hasn't already been ordered (does that make any =
difference?)
The obvious question is first, whether or not he is allowed to carry on =
that sort of activity in the US at all (i.e. are there Green card issues =
etc.),
but second, how it would complicate his life from a tax point of view.
I assume that he would have to make dual filings in both countries. =
Would it make a difference whether he was paid in one currency or the =
other, and where the salary was remitted to, Canada or the US? He will =
continue to live in BC and travel to the US.
It struck me that this sort of situation is absolutely full of =
potentially expensive pitfalls for the unwary, and that it is right up =
your alley in terms of knowing how to plan ahead of time to avoid those =
pitfalls.
Bill
----------------------------------------------------
david ingram replies:
This was sent by Bill Spohn, a West Vancouver lawyer
with an intersting client.
A client who is lilely legal, legal, legal, legal and then "bam" becomes =
illegal by doing something in the US which gets him deported and banned =
for five years..
If you click on www.centa.com go to newsletters and then go to the =
November 1999 edition, there is a long newsletter which anyone thinking =
of expanding into the US will find valuable.
In the meantime, your client is free to sell any amout of product into =
the US as long as it is not made or assembled in the United States. =
Therefore, he could be calling on busineses and displaying a catalogue =
with product from forty countries and do that legally as a Canadian =
resident under the auspices of a B1 Business Status. As a Canadian, he =
will NOT be given a paper visa. ( more on this at www.centa.com click on =
the "Entering the US" button.
As a B1, he can NOT collect money. So he can display his product, show =
his product, demonstrate his product and get a signed order He can NOT =
take a check, can NOT take a VISA or MC or AMEX impression. He can =
suggest that they log on to a web site and insert their VISA number =
there. He CAN give them a stamped self addressed envelope to mail the =
cheque (check) in but he can NOT take the envelope and put it in the =
mailbox.
As a B1, he CAN hire US people to act as salespeopl3e but he can NOT =
manage them from within the USA. =20
Giving any one of them an order from within the USA would be grounds for =
deportation. If he was questioned about his activities when crossing =
into the USA and denied ever having given a salesperson in the USA an =
order from within the USA, he could then be banned for five years as =
well. (this happens when he has fired one of those sale people or =
offended a spouse and the offended person looks up my site, finds out =
that your client has been performing illegal activities and leaves his =
licence number and name at the US border. (See the PROVINCE article I =
have reproduced at the bottom of this answer.)
He can also be in trouble if they open a warehouse in teh US. The Nov 99 =
newsletter deals with this nicely so go and look there.
As far as tax goes, if he is working int he US, he must file a tax =
return. If he earns less than $10,000 for his time in the US, he can =
claim a total exemption under ARTICLE XV of the US Canada Tax Treaty.=20
Over $10,000, he may end up paying tax to the US but it does not matter. =
Canada will give him credit for every cent paid. However, if he is =
working in any one of 43 states, he also has a state tax liability. =
Accountants are always telling me I make am making a mountain out of a =
molehill over state tax returns. I always tell people to file the state =
return. Once in the computer, the state returns are relatively easy and =
why offend a state government when your company may want to open up =
there in a big way. =20
California is known to regularly send Canadian $20,000 bills for work =
performed in California. (Usually happens when one is featured at a =
convention or something).
My favourite story here involves a North Vancouverite who represented a =
Montreal company from Winnipeg to Vancouver and then down to the Mexican =
border for all the states south. I guarantee that everyone of you have =
bought the product a couple of times if you are older than 16. The =
major competitor was in San Francisco and they offered a job at double =
the money.
The second time he went to cross the border for the new company, he was =
pulled in, questioned extensively about his past duties, incarcerated =
for 8 hours (much better than the three days in the article below), his =
car was seized and he was banned form the US for 5 years.
Now, I do not know "who" squealed or why. Was it the old employer =
keeping him from selling to their customers OR, did the US company offer =
him the job, knowing he would be illegal and used the ploy to get him =
out of the business. Personally, I think it was the latter because the =
border fellow seemed to have too much new information.=20
However, it might also have been someone else in the comapny who had =
wanted the job and turned him in to get it. Who knows!
=20
Read the article below.
This is a scanned copy of the Oct 4, 1999 page 3 PROVINCE Article=20
Michael Korpa's Blood pressure went up after he was put behind bars for =
a visa infraction=20
Surrey man who got caught tells of his ordeal behind bars=20
Michael Korpa was finger=ADprinted and photographed. put behind bars =
with criminals. dressed In prison garb and given an inch-thick mattress =
and paper =ADthin pillow to sleep on.
At the age of 52, it was enough to send his blood pressure soaring. The =
Surrey man's crime? He was a Canadian working in contravention of his =
U.S. job visa.
Korpa's predicament and that of four other Canadians eventually driven =
back across the border and dumped by the U.S. Immigration and =
Naturalization Ser=ADvice this year is symptomatic of U.S. nervousness =
about an esti=ADmated 144,000 Canadians work=ADing south of the border =
Illegally.
Korpa was arrested while working as a supervisor on a major building =
project in which a Canadian company has a stake.
INS documents obtained by The Province show how agents played a =
cat-and-mouse game to snare Canadians working at the site. They were =
under scrutiny from the moment they crossed the border at Blaine. Wash.=20
Their entries were recorded. They were watched as they carried out their =
duties at work. They were followed and their car plates were checked. =
=20
Then came the raid last May and a three-day ordeal. =20
'"Three days at my age and I am 52 and I had to lie on the floor for =
three nights on a one inch mattress and a paper thin pillow and my =
blood pressure went up, and I have never been arrested in my life," said =
Korpa.=20
A Kelowna man who was also picked up while supervising form preparation =
for concrete pouring said he felt the criminals he was locked up with =
treated him better than the INS.=20
He said he refused to have his fingerprints or his photo taken - until =
he was told he'd be picked up physically by five big officers and forced =
to comply. =20
Finally, all five agreed to voluntary deportation and were driven to the =
border.
Korpa had a B1 visa to work for six months. He was not allowed to do =
any work except supervise. INS said he violated the terms of his visa =
by picking up material and carrying out Jobs normally assigned to =
others.=20
While the INS agents were keeping an eye on several Canadians only five =
were scooped up along with nine Mexican workers.=20
INS documents allege the men did not have sufficient. Authorization to =
work. But their Seattle lawyer, Bob Gibbs, says It was a case of =
overzealous enforcement.=20
Most of those arrested feel some of their American counter parts tipped =
off the INS.
In one INS document, an American questioned by the INS is quoted as =
saying: "There are a lot of Canadians here. You have to watch out for =
them.
This has been re-printed from page 3 of the Monday, Oct 4, 1999 edition =
of the Vancouver Province. Other stories can be found in the same =
edition.=20
the CEN-TA Group and david ingram have been assisting clients with USA =
and Canadian income tax and immigration matters since 1966. Further =
information and individual service can be found at 604 913-9133 or at =
www.centa.com - or www.david-ingram.com or old television programs at =
www.mediaontap.com/ingram-rogers=20
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