I noticed that many GPT programs don't have or at least don't show their legal status - like Inc. PLC etc.
Is it not needed at all? Or maybe it depends on state legislation. How do you get about this?

I'd like to start a GPT register for offers site (like MyPoints). What are the consecuences when an angry member turns to the BBB or FTC? Anyone had experience?

I hope someone will answer.
Just don't want the topic to be burried.
But if you dislike it just ask the moderators to remove - I'll understand that.

There are no legal responsibilities as far as i am aware Let me know if there are.

Thanx chriscool

Phew!! Had me worryng for a moment there!


If anyone knows of nutty legal stuff like this , PM me

None that I know

There can be legal obligations for instance if you are in the USA for instance and if any of your members earns a lot of money i believe it has to be quite a chunk of change like close to 400.00 a month then you are obligated to send them a W-9 or W-2 statement so you would need a tax ID from the federal government etc. You dont have to pay the tax for them but you do have to give them a tax statement and report it to the IRS. Plus if you own a large site like Send More Info for instance, which by the way is based in the same state that my site is lol. Then you would have to have a tax ID to file your earnings because you would be considered a small business. Most GPTR sites are hobby based, thats why so many sell for like 30 bucks just to give people something to do, then others try to actually make a business out of it which for people in the USA would require all the good tax stuff if you make good profit. Luckily since my site is still pretty new and not very well established as of yet the tax deal hasnt been a problem.

I actually called the IRS and my state tax office and asked questions before opening the site cause one thing I dont need is an audit.

Oh and if you state you will pay members and dont pay them they can ban together and file a class action law suit, just look at poor epipo but most of us arent big enough to have to worry about that YET

Now if your in any other country your on your own lol

If any one should be sued though its Spedia, bums have owed me 250.00 for over a year and a half.

You are right about having to send members W2s if they earn over $400.00 per month.
But in the long hall, it can benefit a GPT site to incorporate, get a tax ID etc, because, for the first year,
you can surely claim a loss and even get some tax bucks back. You are allowed to claim Internet Access costs, even printer paper and other office supplies...along with many other deductions, as long as you have receipts. My wife claims a salary (just enough to put us at the "top" of the earned income credit list)
which gets us about 4 gs a year.
If you "talk good" to ole Uncle Sam, he sometimes listens LOL

Thanks mailmoreinfo and gypsydad for your replies. It was very informative.

Though I'm not a US resident I belive once the site expands quite a bit I'll have to make it into a firm, probably will ask someone from the US since my country's (Belarus) legislation won't allow me to operate on a foreign market without giving 102% of the profits to the government.

I just noticed that different GPT sites impose different threshold for filing W-9 form: Netflip demands it for $250 a year; some paid survey site (probably NPDOR, i don't remember exactly) - $600, other sites - $400.

Does this figure change or depends on state legislation? Any ideas?

I believe it is anything over 400.00 a year that the gptr site has to request the tax id and file the forms. I think thats the standard as if you are gambling (bingo or casinos) and you hit over 400.00 they get your information and you have to claim it. Although I havent won like that, my parents have and had to provide it. When I filed my taxes for last year, I just paid on all the income of the program and took the payments as a deduction. My tax advisor said no one had made enough to send any additional forms or anything. So as the owners, its just another thing out of all this money people think we make. Not to mention paying taxes on search engine income. Theres alot to it, I am just glad I have my tax man, I hand it to him and he figures it all out. I am self employed by career though and we figured the gptr into my other business so that may have been different, still sole pro.

I don't have a GPTR, but I do have an on-line store. I might be able to help with the U.S. tax ID thing. If you are the sole owner with no employees, I'm not sure if members would count as employees, than you can use your social security # as your tax ID. I not sure about other states but in PA need to resigister a ficticous name for your business I think mine cost 50 bucks. With a small business you can deduct anything from your new computer to your electric and phone as long as you need it for your business to operate.
I called a CPA to set everything up. They filed my papers and call me every three months to reminded me of sales tax.

From the lawyer

If you operate a business -- whether it is online, offline, out of your home, or out of your office -- you may be required to have a business license. Your county or city can provide you with this information. You may not have to have a corporation, LLC, or Limited Partnership, but you may be required to register a fictitious name affidavit with your local government. In California, ANY venture done from your home that has any revenue (that doesn't mean profit) is required to have a home business license through your county. If you sell a tangible product across state lines, you may be required to collect sales tax in certain states. Your state revenue department can answer this question.

If you pay any one individual or business more than $600 in a calendar year, you are required to send them a 1099 and file a copy of the 1099 with the IRS. You may issue 1099's for any amount, but when the amount hits $600 it becomes a requirement. Caution: Any time you issue a 1099, you better be able to show where you reported it as income on your tax filings. You may also be responsible for franchise and business taxes in your state or province. Each state revenue office can provide this information, and is usually on their official website. If you ever ask one of your members for a Social Security number or Tax ID number, you are required to provide them with certain IRS forms that show exactly why you are asking for it and that you are in compliance with the Privacy Act of 1974 and The Paperwork Reduction Act (go figure). If your program is located outside of the US, you may be required to provide a different form of 1099 to report foreign income to a US taxpayer. The fines and penalties for failing to comply with these laws are steep and harsh.

ANY webmaster -- regardless of legal standing (sole proprietor, partnership, corporation, LLC) can be sued by an individual or group of individuals for fraud if you fail to pay the members of your program. There is no guaranty that they will win their case, but for fraud suits, you are looking at no less than $50,000 in legal expenses to defend it and legal aid does NOT help in these cases.

As for tax deductions in the US, you may only deduct that portion of your equipment, supplies, home office, utilities etc. that are in direct proportion to the actual use of those things for the business. For example, your home office has to be exclusively used for the business and not for personal use to be eligible for deductions. The same goes for your internet access, portion of utilities, computer, etc. If you use any of these items for personal as well as business use, then only a fraction is deductible and you must have written records to support it. Also, some online businesses are not qualified as businesses and considered "hobbies" by the IRS and thus you are not eligible for deductions. You must also show a profit in a certain percentage of the years you operate the business or your deductions will be disallowed.

I'm glad to answer general questions, but cannot answer specific questions for specific individual cases unless you reside in Nevada, Florida, or California (where I am licensed). The information I have provided is basic information that applies in almost every state with little differentiation, and the IRS information applies no matter where you are in the US.