L1A VISA - Selling Apps online

[alterego]

Hi,

I am on L1A VISA in the US. Few months back, I picked up the hobby of creating apps for mobile devices. Subsequently I launched my first app online for free (on Apple App Store) and it became quite a success. After sometime, I decided to make it a paid version. It has been selling quite ok for the past few months. Recently I also started a blog and wanted to place some ads on it. I tried to register with Google AdSense and was asked for a W9. That is when I realized the complications of tax involved in this matter. I have put the Google AdSense thing on hold but have already earned income in this year (2012) from the app sales. The app was created and update during my free time out of office hours. What can I do now? Is this activity considered illegal? Or is it fine if I just report the income in my tax return?

[immihelp]

While on L1 visa, you are not allowed such activites from the immigration (or work authorization) perspective. Therefore, you should immediately stop them.

In any case, you should report all the income to IRS and pay taxes on them. (They don't really care about whether you are allowed to work or not. They just need to collect tax on your income.)

[alterego]

Thanks immihelp. I understand from your response that the damage is done. So what should I do now? Should I in advance report this to USCIS or my employer to avoid issues in future?

Also, should I remove the apps from sale? Or is it ok to leave them on sale but just refrain from updating/working on them. In that case it will be passive income received from IPR. Is that considered ok?

[immihelp]

You should remove them from sale. Otherwise, it would still be income from work. It would not be passive income, but rather, residual income from work.

You don't need to inform anyone at this point.

[alterego]

You should remove them from sale. Otherwise, it would still be income from work. It would not be passive income, but rather, residual income from work.

You don't need to inform anyone at this point.

Thanks once again for your prompt response. One final question, can I just transfer the ownership of the app, without consideration, to a friend/relative in my home country and have them post it for sale from their account?

Alternately, how about transferring the ownership to my spouse who is on L2 VISA (no EAD available right now). From the below link, I see that L2 visa holders are allowed to work without DHS authorization.

"For COAs displaying a double asterisk (**) (non-immigrant E-1, E-2, and L-2 classifications), the spouse is also authorized to work without specific DHS authorization."

https://secure.ssa.gov/apps10/poms.nsf/lnx/0110211420#g1

[immihelp]

As far as I know and understand, as per USCIS, L2 visa holders need EAD to work. SSA's position is different on this matter.

You could transfer the ownership to someone else. However, if you continue to work indirectly, it is a problem.

[alterego]

As far as I know and understand, as per USCIS, L2 visa holders need EAD to work. SSA's position is different on this matter.

You could transfer the ownership to someone else. However, if you continue to work indirectly, it is a problem.

Thanks again for your response. So whose position should we consider as final? SSA or USCIS?