Peter Fuller MBA CA lives in beautiful Toronto, Canada. Peter has created an new Network Marketing Community called Infinite Potential to help others succeed with their online businesses. The best part, it's free to join and learn.
The short answer is "NO".
Cash gifting programs are illegal pyramid schemes.
I am limiting my discussion to the USA, however other countries have similar laws.
Enforcement activity can occur at the federal level through the FTC, SEC and U.S. Postal Service and at the state level.
Pyramids promise large profits based primarily on recruiting others and not on profits from retail sales. There are even tests to determine if the product being sold is being used to hide the pyramid scheme.
Many well known network marketing companies have run into trouble with these laws and had to restructure their compensation plans and rules.
In 1979 Amway was found not to be an illegal pyramid scheme by the FTC because their system was based on retail sales to consumers. However the FTC did order Amway to change some of its business practices such as retail price fixing and misrepresenting profit expectations.
Cash gifting programs do not even have a product.
Some argue that cash gifting is legal because of the tax code. They even quote the sections. Those sections are about how to, or not to, tax gifts. The code contemplates legitimate gifts between family members and friends, not an organized gifting program.
If you could rely on the tax code to give legitimacy to cash gifting programs then all pyramids would be legal.
In fact the tax code expects you to claim all of your income regardless if it is from a legal source or not. Just ask Al Capone.
So you cannot look to the tax code to determine if an income activity is legal or not.
Some cash gifting programs are religious based.
They prey on you by using religion. They may even contribute to worthwhile causes, however they are pyramid schemes and those at the top are earning all of the money.
I was just on such a site and I quote them:
"How would you like to receive $800, $2,000, $4,000, $8,000, $16,000, $32,000, and $48,000, or 83,200 Over and Over Again?"
They also state "The blessings flowing through this belief system cannot be measured".
Systems such as these are preying on the generosity of good people like you.
You cannot make money unless you recruit others to join. It is a numbers game that explodes exponentially until it implodes and everyone loses their money.
Cash gifting programs are considered illegal pyramid schemes by federal and state law and it will be just a matter of time before your chosen program will be shut down and the bank accounts frozen.
Is that anyway for you to run a home business?
Cash gifting programs are illegal pyramid schemes.
I am limiting my discussion to the USA, however other countries have similar laws.
Enforcement activity can occur at the federal level through the FTC, SEC and U.S. Postal Service and at the state level.
Pyramids promise large profits based primarily on recruiting others and not on profits from retail sales. There are even tests to determine if the product being sold is being used to hide the pyramid scheme.
Many well known network marketing companies have run into trouble with these laws and had to restructure their compensation plans and rules.
In 1979 Amway was found not to be an illegal pyramid scheme by the FTC because their system was based on retail sales to consumers. However the FTC did order Amway to change some of its business practices such as retail price fixing and misrepresenting profit expectations.
Cash gifting programs do not even have a product.
Some argue that cash gifting is legal because of the tax code. They even quote the sections. Those sections are about how to, or not to, tax gifts. The code contemplates legitimate gifts between family members and friends, not an organized gifting program.
If you could rely on the tax code to give legitimacy to cash gifting programs then all pyramids would be legal.
In fact the tax code expects you to claim all of your income regardless if it is from a legal source or not. Just ask Al Capone.
So you cannot look to the tax code to determine if an income activity is legal or not.
Some cash gifting programs are religious based.
They prey on you by using religion. They may even contribute to worthwhile causes, however they are pyramid schemes and those at the top are earning all of the money.
I was just on such a site and I quote them:
"How would you like to receive $800, $2,000, $4,000, $8,000, $16,000, $32,000, and $48,000, or 83,200 Over and Over Again?"
They also state "The blessings flowing through this belief system cannot be measured".
Systems such as these are preying on the generosity of good people like you.
You cannot make money unless you recruit others to join. It is a numbers game that explodes exponentially until it implodes and everyone loses their money.
Cash gifting programs are considered illegal pyramid schemes by federal and state law and it will be just a matter of time before your chosen program will be shut down and the bank accounts frozen.
Is that anyway for you to run a home business?
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http://www.youtube.com/watch?v=x-Kd5w0I2pY
what are you taking about re PayDay loans?
If you are referring to ads next to the article I hope you understand that it is the site that does that, not me personally.
And my comments about Cash gifting are not negative.
It is a fact that the IRS taxcode does not say that cash gifting is legal.
It is a matter of circumstances whether you are gifting friends or are in a business.
You can use terms such as "inviting" and signing forms that you expect nothing, but you and I know that is just a sham to hide that you are really in a business.
Feel free to participate in cash gifting, but do not pretend that it is legal or tell others that it is.
Can't get any better than from the 'horses mouth'
Please let me know.
Marcello
If you read my article you will see that my point is that whether or not something is taxable does not determine if it is illegal or not.
I could argue that the cash gifting provisions do not apply because your are not gifting without an expectation of receiving something in return.
However that argument is not important because it does not matter if the gifting program is taxable or not when determining if the scheme is legal or not.
Do you see the difference?
If Sara Goodman is correct, you have know credibility here whatsoever!
Peter, you have no room to counsel anyone on any entity or make negative claims.
Signing a waiver that you do not expect anything in return is like asking a victim to sign a release stating that they are not being robbed.
Those type of statements have no meaning in court. The court only cares what the real intent is.
You do not sign up with Cash gifting programs not expecting to receive more than you put in.
Given that, then cash gifting actually becomes a business to earn money.
Did you listen to the video that you referenced and hear how the caller squirmed around those issues. He tried to make it sound like a bunch of friends who help each other when times get tough.
My opinion, cash gifting is illegal and you cannot structure it to make it legal.
You cannot escape the fact that you need to recuit others to make money and there is no retail product.
You can call it "inviting" all you want, but it is still recuiting.
and I am glad you enjoyed the article
as 500%! Personally, as a retired commercial banker and legal analyst, I believe that "payday loan" outfits are the bane of our society. No one will argue that the extension of credit at any cost has created the economic nightmare this country is currently experiencing.
However, there are legitmate programs for which I am involved in that don't. Also, there is never ever any claim that a new participant can expect or guaranteed 'anything' in return. That is specifically explained for which a participant signs off on same before participating.
Program is viable.
Peter, do you ever wonder why your comments and the comments from say the FTC make up the minority on the search engines?
The fact of the matter is there is a groundswell of people growing out there today who are utilizing this to help others as well as themselves. Once they understand the concept and the code... a matter of interpretation as evidenced by what the IRS people say... then most people who seek to
find likeminded individuals can and will do fine with this.
I have no idea what you guys are talking about re payday loans.
It appears that the unsophisticated cannot tell the difference between ads being run by articlesbase and the article submitted by independant writers.
I stand by my article and my video.
You cannot use the IRS tax code to justify or support your legal argument. I proved that in the video.
Cash gifting is considered an illegal pyramid by the FTC.
http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt056.shtm
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