receiving paycheck for overseas friends?

May 8, 2018 3:12 PM

I live in the USA. I have several friends in South America who do a fair amount of work online. However, the service through which they were being paid recently closed its doors, and the replacement services won't be ready for a few months. I've been considering the possibility of receiving their deposits here, cashing them out, and sending it to my friends via Western Union. Is this legal/practical? What are the tax implications of this? Should I receive them under my name and report it as business income/expenses on my taxes? Any help appreciated.
posted by Ain to Work & Money (10 answers total)

How well do you know these people? This sounds like an advance check scam.
posted by dilaudid at 3:58 PM on May 8, 2018 [3 favorites]

Check to see what WU charges.
Is there any possibility of using something like paypal?
posted by theora55 at 4:10 PM on May 8, 2018

I used to do small business accounting, not a lot of international stuff but occasional bits and pieces, and even if you think these people are friends... I'm also having trouble coming up with any reason someone could have that would be legit business they're doing in the US but where their legitimate, legal customer would have a harder time sending them money in South America than you would.
posted by Sequence at 4:15 PM on May 8, 2018 [7 favorites]

Do not do this.
posted by rabbitrabbit at 4:33 PM on May 8, 2018 [4 favorites]

Yeah, I can't imagine why you would be more equipped to send money than anyone they are working for, as long as whatever they're doing is legit. What country in south america? What other options have they investigated? This whole thing just reeks of a scam. I'd stay far, far away. This has so many ways to go bad.
posted by cgg at 4:56 PM on May 8, 2018 [1 favorite]

In my business we send payments to contractors in South America and we do it through a bank-to-bank wire transfer. It's even possible to do it online, though your friends will have to get their bank's SWIFT code and wire transfer information. They may have to pay a small fee (usually less than $50), but that's the cost of doing business. I wouldn't do this as an ongoing favor to multiple people. There are too many ways that it could turn into a problem for you and, as a business, I would never agree to pay someone this way.
posted by quince at 4:58 PM on May 8, 2018 [1 favorite]

You can't report business income or expenses if you don't have a business. I don't really know if this is the case but it seems like a kind of money laundering. They won't be getting paid anymore via "Entity A," they'll be getting paid by you. And are they planning to sign the checks over to you or is the supposed legitimate business that was paying them in a normal way suddenly going to start routing money to you? That seems deeply weird.

You are not equipped to do this. You open yourself up to losing all of your money and then some. You open yourself up to having your identity stolen.

It's a big nope. And you should consider if these folks are any kind of real friends to you. I'm trying to imagine a situation in which I would ask a friend in another country to do such a thing that didn't involve me scamming them somehow. Can't imagine it. There are other ways to handle payment transactions. They should do those.
posted by amanda at 5:05 PM on May 8, 2018 [2 favorites]

Is this legal/practical?

Not really, and no. You would basically be getting paid for the work that they were doing with the company paying you thinking you were doing the work. This would be creating whatever employee/employer relaitonship (whether contracting or what) with an organization you were not working for.

What are the tax implications of this?

You would owe taxes on the income you receive.

Should I receive them under my name and report it as business income/expenses on my taxes?

You can't do this unless you are going into the business of payment processing and, if you are planning to do that, there are probably a lot of legal hurdles for setting up that sort of business.

In short, yeah this basically looks like money laundering and I would not do this.
posted by jessamyn at 5:37 PM on May 8, 2018 [2 favorites]

However, the service through which they were being paid recently closed its doors, and the replacement services won't be ready for a few months.

Someone is seriously lying to you. The "replacement services" are called "banks," or Western Union, or Xoom, or others, and these are available to the US employers as well as to you.
posted by JimN2TAW at 5:59 PM on May 8, 2018 [5 favorites]

What kind of money are we talking? Is this for the adult industry by chance? Or another high risk operation that banks tend to frown on? I'm confused as to why your friends' employer isn't handling this transition better. We might be able to recommend an alternative pay processor if you tell us more about your friends' business. Do *not* use your name!
posted by fritillary at 6:02 PM on May 8, 2018 [2 favorites]