Gosh...
There's one line in the screenshot
@bmugford shared that really got me thinking...
There's a lot of room for catastrophe here.
A lot of tax implications.
I'm going to be dropping some "what if's" and speculation, some conspiratorial thinking. Don't take anything from this post to the bank (don't even take it to a fake insurance company, k?)
First things first, it makes sense for Epik to inform their employees that they'll have to withhold taxes if the employees convert their Masterbucks compensation to USD to withdraw, that sounds like normal payroll stuff. Also, I'm not a tax expert, I'm not a lawyer, I'm not a doctor, I'm barely a domain investor...
BUT...
I just hope there aren't any Epik employees who interpreted this to mean that as long as they spend the Masterbucks balance, that the employee doesn't still need to claim the value of their bonus as income. I think most small business owners would understand this, but I don't think most employees would (nor would they have any reason to, typically, this isn't a knock on them at all).
I can't imagine Epik would ever communicate or indicate that employees could avoid taxes by spending their bonus at Epik, but if any employees can say differently, that would add an interesting sub-plot to their whole fiasco. I would be really surprised if Epik suggested that tho, even by Epik standards that would be a wild one.
If the IRS starts poking around, Epik will be longing for the good old days when it was "just" Brad, Derek, and Perkins Coie up their asses.
If you're paid a bonus worth 20k in cash, or Masterbucks, or chocolate bars, or a Corolla... that's income. Just because Epik isn't withholding for the Masterbucks balance, that doesn't mean it's not taxable income just like cash, right? It's also dead-simple to put a value on the Masterbucks, it's not some esoteric thing like if they paid the bonus in the form of an existing domain name where the value could be harder to peg.
Imagine the poor Epik employee who tries to do things right and claims that 20k (or whatever their bonus may have been) as income for the year they received it, then the next year the Masterbucks are worthless and can't even be cashed in. Would they be able to claim that as a loss, and even if they are, is it going to offset their income enough for them to break even?
If Epik employees paid taxes on their Masterbucks compensation, and now the Masterbucks are useless, that's a whole other layer of scamming taking place and
IF THAT IS THE CASE, I'M NOT SAYING IT IS, I hope we hear from some former employees.
Or what about someone who sold a domain, claimed the Masterbucks from the sale as income (as I imagine they should have), and is still waiting into the next calendar year for their Masterbucks to be converted to USD? How does that work?
I doubt you can use Masterbucks as some type of tax strategy fund where you pull out the ideal amount each year, even if it's from a domain sale that happened year(s) ago? Surely you'd have to claim the amount you received in Masterbucks as income for the year you were paid? Can anyone correct me on this?
BUT HERE'S THE REAL KICKER... DID EPIK CLAIM EXPENSES FOR THE BONUSES PAID IN MASTERBUCKS?
If Epik's transferring 20k in Masterbucks to an employee as compensation, is Epik claiming that as a $20k expense? I mean, they should be, right, so I wouldn't' slam them for that... but things get kind of complicated when the Masterbucks end up being worthless, yeah?
Especially if there's any indication Epik knew they were going to make Masterbucks worthless and continued paying employees with Masterbucks and continued writing off any "outgoing" Masterbucks that they were depositing for employees or customers.
Double-espeically if there's even a hint of Epik suggesting their employees are better off, tax-wise, spending their Masterbucks instead of converting to cash and withdrawing.
Surely you can't just invent a fake currency, use it to pay your employees bonuses totaling at least tens of thousands of dollars, write it off as an expense, then delete the limited utility the currency had to begin with?
AGAIN, I'M NOT A TAX GUY, THIS JUST SEEMS ODD TO ME so I figured I'd toss it out there and see if it sparks anything for somebody more knowledgable than myself.
I'm sure it's nothing because this would have been addressed in the lengthy due diligence process while the company was being acquired.....
ALSO...
It's hard to keep track amidst all of the insanity, but wasn't there an issue where Epik had some strange verbiage on one of their sites or forum posts in relation to Masterbucks somehow having some sort of favorable tax implications? Anyone have an archive on that? I could 100% be gaslighting myself and misremembering, or maybe I confused it with one of their other ridiculous scandals/products like fake lifetime domain registrations, fake domain insurance, fake escrow, fake Trustpilot knockoff, fake domain renewals, fake extensions that don't resolve in regular browsers sold with no indication of such, and so on and so on... it's hard to keep track when everything they do is a shoddy, homemade DIY'd-in-someone's-shed version of an actual product. EDIT: Aha, this is what I was thinking of:
https://domainnamewire.com/2020/10/...oidance-at-center-of-epik-paypal-controversy/
So Masterbucks were pitched as having tax advantages... so my question is, was it pitched to their employees as such, too? Or just customers?
