If I just had a dime for each time someone told me how much privacy their Nevada corporation was going to give them, and how they wouldn't have to pay taxes on their corporate income. . .
This might have been true a few years back, but we are now in the information age, the age of the internet. Once an ounce of information has been shared, its available everywhere.
Case in point, corporation tax returns. The sales line used by the Nevada corporation sellers is that since Nevada doesn't have a corporate tax, there is no information shared with the IRS, and ultimately the state where the Nevada corporation owner lives.
What the promoters don't tell you is that every corporation is required to file a tax return with the IRS. Also, the IRS has a program to share information with the various states. So when you file the corporate return for your Nevada corporation with the IRS, the IRS can in turn share that information with your home state.
Think the IRS and your home state are too stupid and lazy to actually do this? Think again. In a recent report created by the IRS for the Joint Committee on Taxation, the IRS reveals that they shared data with various states over 2 billion times, 2,809,446,617 to be exact, in 2006.
What does that mean to you? That means that if you are using a Nevada entity, even though Nevada may not share data with the IRS, the IRS is going to be sharing data with your home state. If you aren't properly reporting the income earned by your Nevada corporation to your home state, chances are you are going to be hearing from your state about the taxes you owe.
2,809,446,617, think about it. The population of the US is roughly 300 million. That means the IRS shared about 10 pieces of information with states for every man, woman, and child who lives here.
There is no privacy anymore.
