Please help, I messed up badly - will the IRS go after me?
patio11: OK, first thing: calm down.Second thing: Taxation in the United States, as in many other countries, is based on a variant of the honor system.  The IRS accepts over 98% of all returns as written.  If you are one of those 98%, that is pretty much the end of the analysis.If not, the IRS is going to probably send you a letter asking you to justify what you have put on your return.  Here is where your competent legal advisor comes in, but the answer is likely to be "The American corporation exists to pass payments to me in Nation X, where I am a resident.  I pay taxes in X.  My understanding is that, owing to X's tax treaty with the US on the subject of royalties, I am not subject to American income tax on the payments at issue."Then one of two things happens: either a) the IRS says "Oh, OK." or b) the IRS spends a lot of time and money having their experts think it over and then says "No, actually, we rather think you are."  At that point you have a bunch of life-not-nearly-over options: you can just pay the money (you will be charged interest and may be assessed a penalty if they believe you were not acting in good faith), you can work out a payment arrangement with them, you can litigate the outcome, etc etc.Third thing: Go get competent legal advice.  Sadly, it likely won't be cheap for international legal issues.  However, it also isn't cheap for the IRS to worry about this, and at $111,200 you're probably beneath their radar most of the time.  (Always remember there are millions upon millions of corporations much bigger than you moving trillions of dollars through America's borders.  Many of them will screw up on their taxes this year in some way -- there are often multiple competing interpretations of the relevant laws.  Keep copious records, file honestly, and don't worry about it until they tell you you have a reason to worry about it.)