I will probably come to US by OCT 2007 and will probably stay here for another year. My company is giving the individual with L1 visa a per day allowance for the first 183 days. They are not going to include the individual in any payroll or give pay slip during that period. Later after 183 days they are adding the individual in their payroll and payslips, and help the individual to file for taxes.

My question is

1. Does my employer do the right thing by not including me in their payroll during the first 183 days?
2. Whether my employer action is legal during the 183 day period?

Please help me with this. It would help me to make decisions on my travel.

1) In my opinion, what they are doing is allowing you to actively evade U.S. income taxes for the first 183 days, because they KNOW you will be here longer than 183 days.

2) Not only is it illegal, it is, In my opinion, tax fraud.

You do NOT have to go along with this criminal act. You can file the non-resident alien tax return for 2007, then file a dual-status return for 2008. In both cases, you should claim the income earned in the U.S.