356
Buying a $250 Residency Card From a Tropical Island Let Me Bypass U.S. Crypto Laws
(www.404media.co)
this post was submitted on 03 Mar 2025
356 points (96.1% liked)
Technology
63746 readers
3327 users here now
This is a most excellent place for technology news and articles.
Our Rules
- Follow the lemmy.world rules.
- Only tech related content.
- Be excellent to each other!
- Mod approved content bots can post up to 10 articles per day.
- Threads asking for personal tech support may be deleted.
- Politics threads may be removed.
- No memes allowed as posts, OK to post as comments.
- Only approved bots from the list below, to ask if your bot can be added please contact us.
- Check for duplicates before posting, duplicates may be removed
- Accounts 7 days and younger will have their posts automatically removed.
Approved Bots
founded 2 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
That's for actual residency. This seems to be able to exist in the country digitally. Other countries, like Estonia, have the same thing.
It can technically be used to extend your stay in Palau long enough to establish tax residency since it would allow you to stay in Palau for longer than 183 days a year. Not unusual for people sitting on big crypto stashes to move abroad or buy citizenships in order to cash out their crypto without capital gains tax (or at least that's how it goes - I imagine the IRS doesn't go down that easily).
The "substantial presence test" is more complicated than you might have thought: https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test
If you spent a full 210 days (30 days from a visa on arrival followed by 2 consecutive 90-day extensions) each year in Palau, but spent the remainder of every year in the USA, you would be physically present in the United States (U.S.) on at least "183 days during the 3-year period that includes the current year and the 2 years immediately before that". Specifically, the "count" would be 232.5 (instead of 465 since days in earlier years are counted as 1/3 or 1/6), which is at least 183.
It seems the easiest way to avoid being considered a United States resident for tax purposes from meeting the substantial presence test is to not be physically present in the United States (U.S.) on at least 31 days during the current year. If you wanted to do that, there are many places where most United States citizens are already allowed to stay for "365 days" or "1 year" or "Unlimited", notably including Palau, as well as Marshall Islands and Albania and other countries: https://en.wikipedia.org/wiki/Visa_requirements_for_United_States_citizens
Ah, thank you.
Used to be the DOJ had an expansive view of USA sovereignty. Guess we will see.