Transition to The Pathway Sedona
Eddie spent the next two years studying what had gone wrong, and how the mission of helping people could be improved upon and made bullet proof. Fortunately, with the introduction of Wise Money Transfer, monies could now be paid into TPS from existing fully funded bank accounts worldwide, effectively ending the threat of a reoccurrence of the Argentinian rebels fiasco.
Eddie also decided to transition his company idea into a non-profit structure, since profit was never the motive in the first place! He discovered that under this legal structure, no taxes were due for the gifts to the members until a threshold of $19,000. was reached, and that TPS could pay these subsequent taxes to the state and federal government for the members, meaning each member with monies due them in gifts from the non-profit structure has no tax liability to worry about, since TPS could pay these taxes in the member’s place directly to the state and federal government. This is true according to U.S. tax code up to an aggregate gifting to any one member of a maximum of $15,000,000. After this threshold is reached, the member is then responsible for their own taxes ongoing.
https://www.jacksonhewitt.com/tax-help/tax-tips-topics/filing-your-taxes/what-is-a-gift-tax-gift-tax-limit-and-exemptions/
Eddie realized that under this non-profit structure he could not only pay out to the members 92% of all monies coming in as donations for the life coaching, but that the company could also pay the state and federal income taxes due on the gifts paid back out to members, up to a $15,000,000. lifetime threshold.
Before starting the Pathway Sedona, Eddie approached the FTC and presented his plan, wanting to understand if their regulations relative to network marketing companies would be infringed upon in any way by this company structure and compensation plan. They looked at the 501C3 designation, and the compensation plan, and responded that they saw no reason not to proceed.
The mission of the FTC is to regulate unfair trade practices. Since TPS is a non-profit company, paying back 92% of every dollar coming in back to its members, they saw no potential harm to consumers, and gave their blessing. And that is why TPS has been left to run its operations unimpeded by the FTC from our inception to this very day two and a half years later.
