Multi-level marketing plans typically involve a parent company selling products to consumers through independent sellers. In general, independent sellers do not receive a salary; Instead, they are paid based on the quantity of products they sell. Multi-level marketing plans are generally legal in Michigan. „A lot of people are in the dilemma of 2020 because it has become the year of very low interest rates and extraordinary stock market volatility,“ Bronnenkant said. Some people don`t like any of these options and have looked elsewhere. This can unfortunately lead to potentially illegal activity. „In difficult times, it is understandable that people are convinced that there is a foolproof way to make money. Although they take different forms, pyramid schemes work in the same way. In any case, the vast majority of participants lose everything they invest. In a Ponzi scheme, few people who enter early earn money. „People keep texting me about Fractal, a Ponzi scheme that uses my name and Sacred Economics to promote itself. So, to be clear, I`m NOT advocating Fractal or similar programs (a few years ago, it was „women`s gift circles“).
I do NOT agree that they use the short film Sacred Economics to evoke an emotional response and attract people. I think these groups chase people who are looking for meaning and belonging to their lives. I think most of the people involved are well-intentioned. However, the „abundance“ they promise is based on recruiting more and more members, and most of them will end up losing their money. I know that some people have a lot of belonging experience when they join the team. The underlying need is fully justified. And maybe there`s more that I have no idea. Anyway, I do NOT support these groups. » You can find the link HERE. Any Michigan resident who has been asked to participate in a monetary donation program, or who is aware of an illegal pyramid or gift scheme in their area, should contact the Michigan Attorney General. Organizers continue to create new names for gift clubs, such as „Friends Helping Friends,“ „Women Empowering Women,“ „Airplane,“ and „Pit Stop,“ but these clubs all operate in the same way and are all illegal.
When someone asks you to join a gift club, don`t fall for their high-pressure sales tactics or high-income stories. But for some people, recruiting those two extra people becomes a problem. And until you recruit more people, don`t move closer to the „blessing circle“ that brings you closer to the center to get the promised money. Not only is such a Ponzi scheme illegal in Michigan, but participating in it can also put you at risk of identity theft. When you sign up, you provide some of your personal information, and with that, your secret sister aka cyber thief can commit identity theft. While he did not comment directly on the sou-sou circles or gifts, IRS spokesman Eric Smith said that under federal tax law, all income is taxable unless it is specifically exempt. When people get together in a circle to give each other gifts without exchanging money, this is called a gift circle. If people gather in person or online because they are recruited and the recruiter receives money or gifts for each person recruited, it is a gift program – which is also an illegal Ponzi scheme. I worked closely with YIP4 alumna Lucy Carver on this article. We feel a responsibility to address this issue with the YIP network and encourage anyone who aspires to strengthen, protect and inspire this community to make informed decisions when working with empowerment circles similar to these programs. Read the following articles and research for yourself how these structures actually work when you deal with them.
We encourage you to have conversations with your own support network and trusted friends about your concerns or questions. Eight years ago, a friend asked me to support a young woman who wanted to join a women`s gift circle but was looking for sponsorship because she didn`t have the $5,000 to participate. It was at a time when I had been working hard and accumulating savings, and I decided to support her with half the money she needed. When she reached the „receiver position,“ she received $40,000, which we then shared. I readily admit that the motivating factor for me was certainly money. However, it was also sincere to be able to support this woman in her process and development. For her part, I sincerely believe that even though money mattered, her motivation to participate came from a deep desire for connection, understanding, and a place on a women`s council. Months passed before she apologetically told me that the circle had collapsed and dissolved. It is hard not to be convinced by the altruistic and cultural history of Sou-Sou, also known as „Susu“, „blessing loom“ or „gift circle“. Promoters point to sou-sou as a common practice among Caribbean and African immigrants to help their businesses grow.
Briscoe was told she would be helping other black people, some of whom may have lost their jobs because of the coronavirus. In New Zealand, for example: „Women who lead a circle or invite others to join can be fined up to $600,000 per offence. Gift circles are illegal in Australia and Canada, and in the United States, the FBI investigated the issue, where more than 20 county women were convicted of fraud and tax evasion, including two sentenced to 14 years in prison in Connecticut in 2013. (Reference below) The feature of an illegal pyramid focuses on two important things: an advance payment pending substantial payment and the obligation to persuade two other people to join, who then also have to bring in two other recruits. Eventually, the whole company collapses and the last people who come in – the broad base of the pyramid – lose their money. „The business model is a model that`s been around for decades, and the difference between a scam and the real business model is how you actually make money,“ Carr said. Claim: This program is legal. Fact: Gift clubs are criminal enterprises.
The organizers are guilty of a crime, and the participants are guilty of a misdemeanor. If you give or receive a gift of money, you need to make sure it`s legal so you don`t get into trouble with the IRS. In the United States, all cash donations under $14,000 per year are tax-free. Cash donations over $14,000 for tuition, medical bills, or donations to charities and political organizations are also exempt from tax. However, you must file a Form 709 if the cash donation is greater than $14,000, regardless of the purpose of notifying the IRS. Gifts of money to your spouse are also exempt from tax, regardless of the amount. Typically, the sender has to pay the tax on donations of money, but you can also pay the tax as the recipient.
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