Obligatory Michael Lewis quote, from Boomerang (2011):
> Yet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets.
The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit.
They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that pile of shit.” The first economist takes the $100 and eats a pile of shit.
Walking a little more, the first economist looks at the second and says, "You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. I can't help but feel like we both just ate shit for nothing."
"That's not true", responded the second economist. "We increased the GDP by $200!"
Well while the pile of shit makes it a joke, isn't there a real advantage here of legibility?
Like you have a measure (GDP) and it can't accurate measure things unless a sale occurs. So even if the money is a wash there was an actual activity occurring in the economy and now it's recorded.
For example, if you've ever wondered why useless art trades at such eye-watering valuations, the answer is that the high valuations are fictions that governments will accept for tax purposes, from which you can derive a variety of exciting tax consequences: https://naturalist.gallery/blogs/journal/understanding-the-f... more-or-less because they agree among themselves what the art is valuated at for their own benefit.
That scenario does not work for this discussion because the first economist has no reason to expect the second economist will ask him to eat shit for $100.
I find this amusing: I'm from Poland, where after the VAT tax was introduced in the 1990s, there were famous "VAT carousel" crimes, with people ending up in prison. The basic idea was similar, except you also collected VAT refunds from the state.
If you search for "vat carousel" today, it seems this is still a thing.
VAT is a joke of a tax. It's quite incredible why the government concerns itself with chasing people's accounts around. What a waste.
If something can't be monitored with minimal effort, it only serves to enrich the legal/accountancy/hr/admin priest caste.
The amount of labour wasted on moving numbers around numbers is staggering.
edit: Between the government and businesses, VAT costs 5% in admin fees to raise. In a modern world where most transactions are digital, is this a great use of resources?
VAT is trivial for businesses to deal with. You add x% onto every invoice you issue. The VAT due to be paid to the government is a simple sum of the amounts distinctly shown on each invoice you issue minus the sum of the VAT amounts on invoices you’ve paid. Income/employment taxes, corporate tax, import taxes, etc are orders of magnitudes more complex, dynamic and subject to legal interpretation. I was a small business owner for a while years ago and did the VAT myself. But there was no way I would even attempt employment or corporation taxes - covered by endless legislation and changing every year - that was a job for the accountant.
I've multiple times done a minor dive into why a VAT tax is seen as a reasonable tax? It... seems as regressive as a sales tax with even more layers of intervention? I've always eventually lost interest in trying to make sense of it, but they sure seem popular in Europe so there must be something to them?
My current belief is that there should really just be a wealth tax on assets (Federal) and a land value tax on land (States); nothing else.
Good thing we don't cater society to your beliefs, else it would lead to collapse of the welfare state and cause the needless deaths of tens of millions of Americans.
It is a progressive tax. It is purely neutral when considered as a sales tax (same percentage, whether you buy a cheap loaf of bread or a luxury gizmo), regressive as a share of income when you consider the poor expend more of their revenue into daily expenditures (whereas the rich put a greater proportion into savings), but back to neutral when you consider savings are meant to be used one day anyway, and slightly progressive in countries where VAT is lower for food and other vital daily expenditures.
There used to be a wealth tax and land value tax in Sweden (aka world champion of taxation), but they were abolished simply because being taxed yearly on an fixed asset doesn't mean you have the liquidity to pay the taxes from your income. They had also caused the some of the wealthiest people in the UK to be Swedes, IKEA being Swiss and Dutch, and a lot of other movements of capital to other countries. All in all, wealth and value tax are a big loss of income for the government.
It’s a funny joke because it is truly happening (without the fraud as a service middleman). This sort of trade has been rampant the last few years in the AI and GPU space, as you can see from the link above, which details people doing exactly this in the real world with armies of accountants to make it appear legal.
What if instead of trading dollars I want to promise to trade dollars in the future? My investors need to see me capturing the market. Might even create some panic for added fun.
This took me far too long to figure out that it was parody. I'm sure some VC has at least thought of building a SEC Violations as a Service platform. This is truly the dumbest timeline.
Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US.
Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping.
At big boy levels this is often structured as “strategic partnership”.
The part that makes it not fraud is that both parties do actually do the work.
This feels very adjacent to the story about the whole town in debt, and the rich guy leaves a $100 bill on the table, [and so on], in a way that I can't quite put my finger on.
You can't put your finger on it because money is merely an accumulator and medium of exchange of economic performance. The performance of services in exchange for other services without money is a perfectly valid economic exchange that can and should be booked to revenue of each of the parties, if actually performed.
Loans without any economic performance of services generate circular meaningless cash flows yeah, but that's not the case when services are actually performed.
Loans are promises to pay. Business deals are promises to perform services or deliver goods. The difference is easily lost in the details even for accountants and economists.
When comparing promises between businesses to pay versus promises between businesses to perform services, it is irrelevant that fiat currency is a federal reserve note rather than, say, bottle caps. Irrelevant.
Not quite. At least the one I found is some trickle down economics myth.
The one op is referencing is more like the dollar is used to pay off the waitstaff, who pay their rent to the landlord, who pay their over due taxes, so that the government can issue a refund to the cafe owner. The dollar ends up back in the hands of the cafe owner, who puts it back down on the table with all the debts paid off.
> True, at the beginning each resident has a $100 liability. But each also has an offsetting financial asset of $100. At the end, they all have neither. So the $100 bill acts as a clearing mechanism
The key realization is that it increases expenses at an equal rate as the revenue increase.
You get $5000 of revenue but spent $5000 on services.
You also have to pay taxes on that $5000 like other revenue.
So many small businesses will try to just exchange the services more directly in some way, or give steep discounts. (Tip: This doesn’t mean it’s entirely correct for tax/legal/accounting purposes, so don’t do big deals like this without consulting professionals. I’m just saying this is what’s done by some people)
> The part that makes it not fraud is that both parties do actually do the work.
The cheap criticisms of these deals always miss this part: something of value is traded for the dollars by both parties. Companies can’t simply circulate dollars between themselves.
If I spent $5k as a business to realize $5k in revenue the tax is zero (ignoring as you say sales VAT, etc)
The problem comes when the $5k you “traded” also didn’t cover the actual expense to provide the $5k you “earned” - now you have an actual loss even if cash didn’t flow.
I could imagine somewhere trying to make that the rule, but I have a hard time imagining that rule being enforceable.
At least for US federal taxes, losses do not need to be tied to revenue. As long as they occur in the same tax year, you can deduct. You can also carryover losses to future years, or pass them through to personal income deductions; but the rules there get more complicated.
Yeah from a tax standpoint you're fine, but from a "whole business cash-flow" concept you could end up in the hole even though on paper you traded $5k for $5k (accountants might have it booked somewhere as "goodwill" or something to make the books balance).
> The part that makes it not fraud is that both parties do actually do the work.
It's far more nuanced than that.
If you do the work but undervalue it, it's likely tax fraud.
If you do the work but overvalue it, it's likely investor fraud.
Even if you fairly value the work it still might be investor fraud. The vendor may have been chosen not by merit, but by its willingness to accept an exchange of services. Saying you have $X in revenue implies you won that revenue by merit.
> If you do the work but undervalue it, it's likely tax fraud.
A company can value it's services as it chooses. If the work is performed for $1 or $5000 the government doesn't get a say in that.
> you do the work but overvalue it, it's likely investor fraud.
Quite possibly. Assuming this was done with the intention of misrepresenting your revenue and gaining investment.
>The vendor may have been chosen not by merit, but by its willingness to accept an exchange of services. Saying you have $X in revenue implies you won that revenue by merit.
Vendors are chosen all the time because of their willingness to accept specific payment terms and a whole bunch of non-merit pipelines via family, via golf course deals etc.
On a corporate level it doesn't really matter as you're only taxed on your profits/losses. If we do a service swap ultimately it's just adding a revenue item with a matching loss, and these are infact quantified.
As an individual interestingly it does matter because services received for free are considered taxable income (but businesses are not taxed on their income).
Investor fraud is usually brought as a civil case and takes a balance of evidence approach.
Since enforcement is stochastic and rare these practices are pretty common. The freedom to do ‘whatever’ is really dependent on the discretion of the government and investors. Most companies can and do fly under the radar but have to be careful not to piss off the wrong people.
Okay but then why are we singling this out as tax fraud, if the justification is just "anything can be"? Why not claim that posting on HN is tax fraud?
Barter counts as income by many tax jurisdictions, if you don’t declare the fair market value of the exchange you are in violation. Most people don’t declare this and it is rarely ever enforced.
It depends on jurisdiction, the US is unusual, most countries they’ll reassess you and it’s on you to prove them wrong.
I did have to look it up, I didn’t know that the US was different in this way. I did have the California tax authority make a mistake and take money directly out of my account and there didn’t appear to be a way to fight it. It wasn’t enough to be worth hiring a lawyer over so I let it go but it didn’t give me much faith in the governance of California, very Kafkaesque.
> A company can value it's services as it chooses. If the work is performed for $1 or $5000 the government doesn't get a say in that.
It isn’t that black and white. If you are being paid in cash, you can charge whatever you want, that is true. But if you are exchanging goods or services for other goods or services, the government is going to care how you value that transaction.
It might be legal in YOUR jurisdiction, but at least in the jurisdiction I'm in, it is not - AFAIK - legal to neither underwrite or overwrite costs on the sole purpose of avoiding tax or grooming the pig.
> A company can value it's services as it chooses. If the work is performed for $1 or $5000 the government doesn't get a say in that.
Whether it you think it should or not depends on your personal preferences, but in practice the government does get a say in anything that it deems to be an undue way to reduce your taxes.
Barter would be much more common if it was a legal way of avoiding taxes.
How would this reduce taxes? If I normally charge 20k for widget Z but only invoice company A 10k because they will see me widget B for 10k and we trade widgets, there is no taxable event. If company A was willing to pay the 20k instead obviously I would rather have that even if it creates 10k taxable income because profit.
Investor fraud is much more likely if neither company actually needs each other's widgets and it's just to pump revenue.
This is pure nonsense. In the US the internal revenue code doesn't allow you to just value services however you choose in what is effectively a barter arrangement.
And the judges are likely to be looking for good faith as much or more than technical accuracy in the valuation. So the IRS is not going to bring you in front of the tax judge unless they have evidence of bad faith.
OTOH, most work is not "unique, innovative and visionary" and has a relatively transparent fair market value.
> If you do the work but undervalue it, it's likely tax fraud
Probably not, it's just giving a discount. Nothing wrong with that. Many companies sell goods or services below cost. To gain other benefits like market share, or new customers. Why not do it to get something else essential from another company?
> If you do the work but overvalue it, it's likely investor fraud
It probably depends on the situation. If it's mainly used to inflate sales figures and scam investors, then probably yes. If it's just a "good deal" then probably not.
> Probably not, it's just giving a discount. Nothing wrong with that.
Discounting and undervaluing have differences, one of them is transparency. As you say, many companies offer discounts and don’t hide that. People who commit tax fraud usually aren’t transparent about their “discounts”.
Not profit taxes, if you made $0 profit. There are other taxes though. Sales and use taxes. Gross receipts taxes some places. Stuff like that, yes, you pay taxes.
I am sure people avoid the tax element this way, but it's not a sustainable way to go.
Let's say I do a website for $5,000 (putting aside that this a dead industry, and my career for the past 20 years) and the landscaper comes to do the work at my house.
If he cuts a powerline, falls down a hole or chops off his hand, we have a big insurance problem. No paperwork, no contract.
I have had friends who did their side of the contra deal and never got the other part of the bargain fulfilled.
Things like 'I'll paint your house if you can help fix up this old car of mine.'
I have turned down these deals in the past. Same as someone asking me to work for free for 'exposure'.
I am not having a go at the comment above as I think the point is valid - small business doing this is fraud, big business do it and it's fine.
Just my advice to anyone thinking it might work for them. Send the invoice, do the work, get paid in money.
Yeah, I agree. If all transactions are reported and treated like a sale.
I just have personal experience where the person offering from one side often wants to avoid the tax. In Australia we have 10% GST/VAT. Pay someone and there is 30% payrol tax (even as a sole trader). Then 12% mandatory pension contribution.
So the $5000 website/landscaping turns into 3k cash in hand.
Enticing to avoid this if you can, but I am risk adverse - clients pay me off the back of this. It balances the risk appetite of a business owner who could cut corners, with me sayng not to. If they do, at least I made the risk clear.
But your point is valid and correct. There is nothing wrong with contra deals where it's booked properly.
lol, no, unless you are saying "revenue" as in "revenue under my made up accounting system".
Under ASC 606 you can't just allocate any old number you like. On top of this, no auditor would sign off on what you suggested. The IRS would be looking at you and get you on tax fraud, you'd likely be committing securities fraud, bank fraud, wire fraud and 26 other things I can't think of, assuming you are a business of any size at all.
And the part that would make it fraud (in some contexts, especially publicly traded and international corp struturing for tax purposes) would be overvaluing the services.
Tax laws may vary by jurisdiction. Often the in-kind contributions appear on a different line item from income on the balance sheet and usually go into a different box on the tax form.
SEC calls this round-tripping. ASC 606 requires commercial substance — if both parties just book offsetting transactions, auditors flag the net cash flow as zero
They're already ahead of you; you have to consistently book revenue (accrual or cash basis) which means they both go at the same time (which would offset) or that real money is being exchanged. You can't accrue the 100 you're (supposedly) giving me now and THEN accrue the 100 I'm giving you next year.
Goodwill almost always raises concern with authorities and audits, so I'd imagine so sort of quid pro quo version is equivalent to loudly yelling to be audited!
I remember in the couple years before the dot com crash in 2000, there was a lot of satire being written which was being taken very seriously. You couldn't tell what was serious and what was humor because both were absurd.
A startup is a small, agile company that is trying to grow.
Those things have more money than the world, and can't change anything about their business without the house of cards of their investment image falling down.
I interviewed at a startup, really early stage, who claimed to be on track for $100k ARR. We all know "ARR" is bullshit, but I didn't suspect the ~$10k monthly to be bullshit. It turns out this was $10k pre-discount, and this product was ~FREE for YC companies, who made up ~100% of this companies customer base. So revenue was $0, or very close to it.
mytailorisrich | 15 hours ago
hliyan | 14 hours ago
> We take 2% of every swap. Then we swap our revenue with another platform.
randometc | 14 hours ago
> Yet another hedge fund manager explained Icelandic banking to me this way: you have a dog, and I have a cat. We agree that each is worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners but Icelandic banks, with a billion dollars in new assets.
cucumber3732842 | 13 hours ago
Two economists are walking through a cow pasture.
The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit.
They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that pile of shit.” The first economist takes the $100 and eats a pile of shit.
Walking a little more, the first economist looks at the second and says, "You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. I can't help but feel like we both just ate shit for nothing."
"That's not true", responded the second economist. "We increased the GDP by $200!"
lesuorac | 13 hours ago
Like you have a measure (GDP) and it can't accurate measure things unless a sale occurs. So even if the money is a wash there was an actual activity occurring in the economy and now it's recorded.
jerf | 13 hours ago
For example, if you've ever wondered why useless art trades at such eye-watering valuations, the answer is that the high valuations are fictions that governments will accept for tax purposes, from which you can derive a variety of exciting tax consequences: https://naturalist.gallery/blogs/journal/understanding-the-f... more-or-less because they agree among themselves what the art is valuated at for their own benefit.
lotsofpulp | 12 hours ago
thelastgallon | 14 hours ago
Read the whitepaper*
*there is no whitepaper
Lucasoato | 13 hours ago
jwr | 13 hours ago
If you search for "vat carousel" today, it seems this is still a thing.
debarshri | 13 hours ago
gaiagraphia | 13 hours ago
If something can't be monitored with minimal effort, it only serves to enrich the legal/accountancy/hr/admin priest caste.
The amount of labour wasted on moving numbers around numbers is staggering.
edit: Between the government and businesses, VAT costs 5% in admin fees to raise. In a modern world where most transactions are digital, is this a great use of resources?
ww520 | 12 hours ago
Arodex | 8 hours ago
https://taxfoundation.org/blog/value-added-tax-vat-progressi...
whynotmaybe | 11 hours ago
derriz | 11 hours ago
stephen_cagle | 11 hours ago
My current belief is that there should really just be a wealth tax on assets (Federal) and a land value tax on land (States); nothing else.
shimman | 10 hours ago
Arodex | 8 hours ago
https://taxfoundation.org/blog/value-added-tax-vat-progressi...
Flundstrom2 | 8 hours ago
econ | 12 hours ago
testing22321 | 13 hours ago
The result? The GDP goes up two million and we both have shit eating grins.
wordpad | 12 hours ago
Havoc | 13 hours ago
This is why substance over form is a thing in revenue accounting. Unless you're an American AI company ofc.
baggachipz | 13 hours ago
debarshri | 13 hours ago
Can it also generate SOC2 certifications in days?
random3 | 13 hours ago
janderson215 | 13 hours ago
grey-area | 13 hours ago
https://www.bloomberg.com/graphics/2026-ai-circular-deals
FergusArgyll | 12 hours ago
grey-area | 12 hours ago
spwa4 | 13 hours ago
Let's just say if you really want to commit crimes, don't start with challenging the IRS. Just don't. There's so many horror stories about that.
HumblyTossed | 13 hours ago
But it's all for mocking the current market... so.
luke5441 | 13 hours ago
Frozen_Flame | 13 hours ago
conorcleary | 11 hours ago
everfrustrated | 13 hours ago
stego-tech | 13 hours ago
rizza | 13 hours ago
alansaber | 13 hours ago
whatever1 | 13 hours ago
Swizec | 13 hours ago
Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping.
At big boy levels this is often structured as “strategic partnership”.
The part that makes it not fraud is that both parties do actually do the work.
skeeter2020 | 13 hours ago
ebiester | 12 hours ago
atomicnumber3 | 13 hours ago
throwaway667555 | 12 hours ago
Loans without any economic performance of services generate circular meaningless cash flows yeah, but that's not the case when services are actually performed.
Loans are promises to pay. Business deals are promises to perform services or deliver goods. The difference is easily lost in the details even for accountants and economists.
copperx | 12 hours ago
throwaway667555 | 9 hours ago
adharmad | 12 hours ago
hirsin | 11 hours ago
The one op is referencing is more like the dollar is used to pay off the waitstaff, who pay their rent to the landlord, who pay their over due taxes, so that the government can issue a refund to the cafe owner. The dollar ends up back in the hands of the cafe owner, who puts it back down on the table with all the debts paid off.
joenot443 | 12 hours ago
https://www.econlib.org/archives/2012/01/an_answer_to_a.html
> True, at the beginning each resident has a $100 liability. But each also has an offsetting financial asset of $100. At the end, they all have neither. So the $100 bill acts as a clearing mechanism
Aurornis | 12 hours ago
You get $5000 of revenue but spent $5000 on services.
You also have to pay taxes on that $5000 like other revenue.
So many small businesses will try to just exchange the services more directly in some way, or give steep discounts. (Tip: This doesn’t mean it’s entirely correct for tax/legal/accounting purposes, so don’t do big deals like this without consulting professionals. I’m just saying this is what’s done by some people)
> The part that makes it not fraud is that both parties do actually do the work.
The cheap criticisms of these deals always miss this part: something of value is traded for the dollars by both parties. Companies can’t simply circulate dollars between themselves.
ahtihn | 12 hours ago
Businesses do not pay taxes on revenue, they pay taxes on profit.
Other taxes may be applicable though (such as VAT or sales taxes).
lotsofpulp | 12 hours ago
https://en.wikipedia.org/wiki/Gross_receipts_tax
https://en.wikipedia.org/wiki/Business_and_occupation_tax
bombcar | 12 hours ago
The problem comes when the $5k you “traded” also didn’t cover the actual expense to provide the $5k you “earned” - now you have an actual loss even if cash didn’t flow.
gizmo686 | 12 hours ago
At least for US federal taxes, losses do not need to be tied to revenue. As long as they occur in the same tax year, you can deduct. You can also carryover losses to future years, or pass them through to personal income deductions; but the rules there get more complicated.
bombcar | 9 hours ago
lelanthran | 10 hours ago
What taxes are owed on revenue? Tou pay taxes on profit only.
bryanlarsen | 12 hours ago
It's far more nuanced than that.
If you do the work but undervalue it, it's likely tax fraud.
If you do the work but overvalue it, it's likely investor fraud.
Even if you fairly value the work it still might be investor fraud. The vendor may have been chosen not by merit, but by its willingness to accept an exchange of services. Saying you have $X in revenue implies you won that revenue by merit.
scarby2 | 11 hours ago
> If you do the work but undervalue it, it's likely tax fraud.
A company can value it's services as it chooses. If the work is performed for $1 or $5000 the government doesn't get a say in that.
> you do the work but overvalue it, it's likely investor fraud.
Quite possibly. Assuming this was done with the intention of misrepresenting your revenue and gaining investment.
>The vendor may have been chosen not by merit, but by its willingness to accept an exchange of services. Saying you have $X in revenue implies you won that revenue by merit.
Vendors are chosen all the time because of their willingness to accept specific payment terms and a whole bunch of non-merit pipelines via family, via golf course deals etc.
bloppe | 11 hours ago
What if you're getting paid in landscaping?
scarby2 | 10 hours ago
As an individual interestingly it does matter because services received for free are considered taxable income (but businesses are not taxed on their income).
kube-system | 9 hours ago
danielmarkbruce | 7 hours ago
gamblor956 | 3 hours ago
Business are taxed on their net income but many jurisdictions tax businesses on their gross revenue as well (look up GRT and GET).
cjbgkagh | 11 hours ago
Investor fraud is usually brought as a civil case and takes a balance of evidence approach.
Since enforcement is stochastic and rare these practices are pretty common. The freedom to do ‘whatever’ is really dependent on the discretion of the government and investors. Most companies can and do fly under the radar but have to be careful not to piss off the wrong people.
philipallstar | 10 hours ago
cjbgkagh | 10 hours ago
gamblor956 | 3 hours ago
cjbgkagh | 2 hours ago
I did have to look it up, I didn’t know that the US was different in this way. I did have the California tax authority make a mistake and take money directly out of my account and there didn’t appear to be a way to fight it. It wasn’t enough to be worth hiring a lawyer over so I let it go but it didn’t give me much faith in the governance of California, very Kafkaesque.
cortesoft | 10 hours ago
It isn’t that black and white. If you are being paid in cash, you can charge whatever you want, that is true. But if you are exchanging goods or services for other goods or services, the government is going to care how you value that transaction.
elil17 | 10 hours ago
That's simply not true. You may get a certain amount of leeway, but it has to be reasonable.
andix | 9 hours ago
For example giving huge discounts below cost only to family members, which is more or less like paying them money without paying taxes for it.
thih9 | 8 hours ago
When two companies undervalue the services that they offer to each other, they pay lower taxes. This is the illegal part.
tstenner | 8 hours ago
thih9 | 6 hours ago
gamblor956 | 3 hours ago
Businesses are taxed on their net income, not get gross.
Flundstrom2 | 8 hours ago
andix | 8 hours ago
Exactly. But it doesn't have to be used in this way.
stymaar | 10 hours ago
Whether it you think it should or not depends on your personal preferences, but in practice the government does get a say in anything that it deems to be an undue way to reduce your taxes.
Barter would be much more common if it was a legal way of avoiding taxes.
hattmall | an hour ago
Investor fraud is much more likely if neither company actually needs each other's widgets and it's just to pump revenue.
danielmarkbruce | 7 hours ago
mannanj | 11 hours ago
singleshot_ | 9 hours ago
bryanlarsen | 7 hours ago
OTOH, most work is not "unique, innovative and visionary" and has a relatively transparent fair market value.
brandensilva | 9 hours ago
Who protects the consumer when they have been gutted of any power?
hapless | 9 hours ago
It amazes me investors or the sec will put up with it
cyberge99 | 4 hours ago
andix | 9 hours ago
Probably not, it's just giving a discount. Nothing wrong with that. Many companies sell goods or services below cost. To gain other benefits like market share, or new customers. Why not do it to get something else essential from another company?
> If you do the work but overvalue it, it's likely investor fraud
It probably depends on the situation. If it's mainly used to inflate sales figures and scam investors, then probably yes. If it's just a "good deal" then probably not.
thih9 | 9 hours ago
Discounting and undervaluing have differences, one of them is transparency. As you say, many companies offer discounts and don’t hide that. People who commit tax fraud usually aren’t transparent about their “discounts”.
andix | 8 hours ago
It's basically saying they give you as much discount as you need to be able to afford the service. And those discounts are very secret by design.
DANmode | 2 hours ago
If I want to sell my SaaS to small primary schools for 90% off, I should be able to do that.
Probably.
Let’s discuss.
c7b | 7 hours ago
[0] https://en.wikipedia.org/wiki/Barter
Re investors: please list at least one credible source supporting this assertion.
bryanlarsen | 6 hours ago
Any lie, misleading omission or misleading half-truth is investor fraud.
DANmode | 2 hours ago
If a firm can’t afford services cash, that’s part of the merit of the choice.
This is not compelling.
emsign | 12 hours ago
> fraud is that both parties
> do actually do the work.
Do they though?
Fordec | 12 hours ago
jona-f | 11 hours ago
kjkjadksj | 12 hours ago
oliver236 | 11 hours ago
f6v | 11 hours ago
xp84 | 11 hours ago
cestith | 10 hours ago
osullip | 11 hours ago
https://www.ato.gov.au/businesses-and-organisations/gst-exci...
I am sure people avoid the tax element this way, but it's not a sustainable way to go.
Let's say I do a website for $5,000 (putting aside that this a dead industry, and my career for the past 20 years) and the landscaper comes to do the work at my house.
If he cuts a powerline, falls down a hole or chops off his hand, we have a big insurance problem. No paperwork, no contract.
I have had friends who did their side of the contra deal and never got the other part of the bargain fulfilled.
Things like 'I'll paint your house if you can help fix up this old car of mine.'
I have turned down these deals in the past. Same as someone asking me to work for free for 'exposure'.
I am not having a go at the comment above as I think the point is valid - small business doing this is fraud, big business do it and it's fine.
Just my advice to anyone thinking it might work for them. Send the invoice, do the work, get paid in money.
RobotToaster | 11 hours ago
My company builds your company a website, and "charge" $1,000,000 for it.
Your company mows my company's lawn and "charge" $1,000,000 for it.
Both companies now have $1,000,000 in revenue from this transaction.
osullip | 11 hours ago
I just have personal experience where the person offering from one side often wants to avoid the tax. In Australia we have 10% GST/VAT. Pay someone and there is 30% payrol tax (even as a sole trader). Then 12% mandatory pension contribution.
So the $5000 website/landscaping turns into 3k cash in hand.
Enticing to avoid this if you can, but I am risk adverse - clients pay me off the back of this. It balances the risk appetite of a business owner who could cut corners, with me sayng not to. If they do, at least I made the risk clear.
But your point is valid and correct. There is nothing wrong with contra deals where it's booked properly.
mattnewton | 10 hours ago
danielmarkbruce | 9 hours ago
Under ASC 606 you can't just allocate any old number you like. On top of this, no auditor would sign off on what you suggested. The IRS would be looking at you and get you on tax fraud, you'd likely be committing securities fraud, bank fraud, wire fraud and 26 other things I can't think of, assuming you are a business of any size at all.
singleshot_ | 9 hours ago
Two adults, a legal subject, sufficiently specified, offer, acceptance, consideration, mutual assent… a contract.
TZubiri | 11 hours ago
glitchc | 10 hours ago
BobbyTables2 | 4 hours ago
Yeah, they’re getting useful things but they aren’t making money.
sscaryterry | 13 hours ago
RobotToaster | 13 hours ago
1attice | 13 hours ago
RobotToaster | 13 hours ago
0xffany | 13 hours ago
RobotToaster | 11 hours ago
Kim_Bruning | 13 hours ago
cactusplant7374 | 10 hours ago
clearstack | 13 hours ago
whatever1 | 13 hours ago
skeeter2020 | 13 hours ago
bandrami | 12 hours ago
duzer65657 | 12 hours ago
RobotToaster | 13 hours ago
felipellrocha | 13 hours ago
LNSY | 11 hours ago
12_throw_away | 8 hours ago
david927 | 13 hours ago
desireco42 | 13 hours ago
zoba | 13 hours ago
titanomachy | 13 hours ago
https://web.archive.org/web/20260515043739/https://www.revsw...
fancyfredbot | 12 hours ago
outside1234 | 12 hours ago
frangonf | 11 hours ago
orthecreedence | 11 hours ago
That gave me a chuckle. Too real.
theartfuldodger | 12 hours ago
PeterStuer | 12 hours ago
outside1234 | 12 hours ago
mcmcmc | 12 hours ago
Yeah that doesn’t sound Ponzi-adjacent at all
marcosdumay | 9 hours ago
Those things have more money than the world, and can't change anything about their business without the house of cards of their investment image falling down.
cog-flex | 12 hours ago
nottorp | 11 hours ago
But wtf is up with Firefox? It doesn't like the site's SSL. Okay, they missed points 7, 18 and 24 to 31 in the current security theater checklist.
An error occurred during a connection to revswap.ai. Cannot communicate securely with peer: no common encryption algorithm(s).
Error code: SSL_ERROR_NO_CYPHER_OVERLAP
Whatever?
Hmm if i edit the link to http i get a cloudflare error page. Someone censoring?
And what does it say about the modern internet that the first two things i thought of are security theater and vendor censorship?
felooboolooomba | 11 hours ago
time0ut | 11 hours ago
pduggishetti | 10 hours ago
frankfrank13 | 9 hours ago
tonymet | 9 hours ago