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Nevada Corporations and the IRS

Author johnbsims3
Admin 

#1 - Posted: 10 Dec 2006 06:43 
Nevada Corporations and the IRS

If you have established a Nevada corporation as part of an asset protection plan and you are a Florida resident then you have probably learned of the great benefits of establishing a business through Nevada corporations. Based on an article in a recent column in the Wall Street Journal, the purported benefits of a Nevada corporation may be leaning toward tax evasion instead of asset protection.

On December 6, 2006, the Wall Street Journal wrote a column on the IRS' efforts to scrtinize taxpayers who attempted to evade income taxes by forming business entities with hidden ownership in states including Nevada and Delaware. The paper stated that the problem appeared widespead in Nevada where random audits of Nevada corporations have apparently exposed widespread abuse of business entities to avoid taxes.

The IRS is also apparently investigating promoters of Nevada corporations as wealth protection vehicles due to these promoters using "wealth protection" or "asset protection" as a vehicle for tax evasion.

Be advised that asset protection, although a very important part of estate planning and possibly integrated with estate tax reduction, usually has no bearing on income tax. If someone is trying to convince you to set up a Nevada corporation for asset protection, and says that you can evade income taxes, then don't do business with them and get professional advice.

Author johnbsims3
Admin 

#2 - Posted: 14 Dec 2006 20:21 
Federal Court Bars Florida Man From Promoting Tax Fraud Scheme Involving LLCs

As discussed here, the Homeland Security and Governmental Affairs permanent subcommittee on investigations recently held hearings on the growing problem of people creating limited liability companies and other businesses as so-called "shell companies" for illegal purposes such as money laundering, bribery, corruption, tax fraud, and for financing terrorist activities. A recent federal case out of Tampa, Florida, illustrates how one man used such companies for tax fraud. In that case, the court barred David Marvin Swanson of Sarasota, Florida, from promoting a tax fraud scheme that involved setting up LLCs in Nevada in order to help his clients hide their income. Swanson had maintained a Web site for his company, Dynamic Monetary Strategies, where he touted his system and distributed a manual that taught clients how to "legally" avoid paying federal income taxes by placing their money in sham trusts, which he called "unincorporated business trust organizations," or "UBTOs." Not surprisingly, Swanson's tax fraud business was only one of many other similar schemes operating throughout the country. Since 2001, the Justice Department's Tax Division has obtained more than 200 injunctions against persons touting fraudulent tax schemes.

To read more about the federal government's case against Swanson, go here, http://www.heraldtribune.com/apps/pbcs.dll/article ?AID=/20061122/BUSINESS/611220534

here, http://www.usdoj.gov/tax/txdv04111.htm

and here http://www.thesop.org/index.php?id=3084

Asset Protection and Estate Planning Florida Homestead Services -- Florida Homestead Exemption Act MiniBB / Asset Protection and Estate Planning /
Nevada Corporations and the IRS
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