Tax Strategies with Drew Miles — Is An IC-DISC Right for You?
With your export-based business you could be claiming massive tax benefits
If you own a company or business in the manufacturing industry that is currently exporting U.S.-made goods globally or an engineering or architectural firm providing services on foreign construction projects, then there is a good chance that your company would benefit from the set-up and implementation of an Interest Charge-Domestic International Sales Corporation, known as an IC-DISC. When you choose to work with Drew Miles and his team, it is easy to set up an IC-DISC. IC-DISCs are fairly inexpensive to set up and operate, and they can make a very significant difference when it comes to reducing the federal tax rate of your net export income. In order to make the most of an IC-DISC though, Drew Miles recommends that the IC-DISC be established as soon as possible because no tax benefits can be claimed on export sales until the IC-DISC has been formed.
What you need to know
So what exactly is an IC-DISC? Simply put, it’s a “corporate entity” that is exempt from federal income tax. The IC-DISC is a “paper” entity that does not require office space, employees, or even any tangible assets, existing as a conduit for export tax savings. IC-DISCs have existed for about the last forty years in one form or another, but it’s only within roughly the last decade that, as more companies have become involved with foreign transactions and exporting, IC-DISCs have been recognized for their use in improving the cash flow of these businesses and allowing them to enjoy the benefits of these tax savings. Basically, unlike most tax planning strategies, which can only defer payment of the tax, an IC-DISC creates the opportunity to take advantage of permanent tax savings.
The next question is, of course, how does one go about creating an IC-DISC? With the help of Drew Miles and his team you must first create a domestic “C corporation” and request and receive approval from the IRS for it to be treated as an IC-DISC. Then there are a set of rules that it must adhere to, including that it must be incorporated in one of the fifty states or the District of Columbia, have separate accounting records, maintain its own bank account, file U.S. tax returns, and at least ninety-five percent of its assets and gross receipts must be related to the export of a property that needs to be at least fifty percent attributable to U.S.-produced content. It can sound like a lot, but with the help of Drew Miles, we’ll have your IC-DISC up and running and saving you money in no time.
Some things to keep in mind if you do decide to work with Drew Miles to create an IC-DISC. If your IC-DISC is audited by the IRS, you need to ensure that it is valid, meaning that it has been properly set up and maintained based on the guidelines we outlined above. Also, the export property must be properly qualified as both attributable to U.S.-produced content and strictly created for overseas export. They also will check that your IC-DISC commissions have been properly calculated and that there are no errors on the IC-DISC return. But with Drew Miles and on your side, you won’t have to worry.