Most companies promote Nevada for a tax or privacy issue both of which do not really work with Nevada corporations. Listed below are a few that we have come across.

Typical problems may be:

1. IRS problems -they may have personal tax problems, they want a corporation without their SSN on the SS4.

2. Being Sued -they want to protect their assets from lawsuit.

3. Getting Divorced -they want to lower their income so they want a C corp.

4. Alimony -they want to lower their income so they want a C corp

5. Child Support -they want to lower their income so they want a C corp.

6. Noncompete –they want to incorporate outside their state so they don’t violate the noncompete.

These strategies are very important to understand as to what our competition is promoting!

1. Privacy in Nevada :

What is sold:

People are told that Nevada is a private state because:

1. Nevada can use “nominees”* and keep their names out of state records.

2. Nevada does not exchange info with the IRS (this is true, but there is really no information to share because there is no state taxes in Nevada ).

3. There is no state income tax and no financial reports to complete.

4. You can use Bearer Shares and no one can find out who the owners are (not true).

What are the holes in this strategy:

1. Usually a C corp is recommended for privacy. This is the wrong entity to hold appreciating assets.

2. They don’t address areas where the nominee will not sign, many times this includes contracts, licenses and tax returns.

3. This one does not really mean anything anyway. (they may get audited because other companies do not emphasize with a corporation you have to do payroll).

4. No state income tax is true, but most of these people are not doing the work from Nevada , therefore they should register in their home state, and would pay state tax there.

5. Bearer Shares do not show up in any court cases in Nevada ’s history, it does exist in some offshore jurisdictions but not in Nevada according to our research. Nevada is difficult to find out who owns a corporation here because of the stock ledger statement at the RA’s address (not the actualstock ledger).

2. Moving Profits to Nevada from Home State Corporation:

What is Sold:

If you have a California C corp that earns 100k in profits and you pay state taxes of about 10% (actually 8.84%) you would pay about 10k in state income taxes. If you could form a Nevada C corp as a marketing company, you could expense out 100k in profits to Nevada and save the California state taxes and this might only cost you 3k to set up in Nevada .

What are the holes in this strategy:

1. The C corporation in Nevada is probably a PSC{what is a PSC} and would be subject to 35% tax on audit.

2. The C corp may be part of a controlled group with the California C corporation which means you only get 1 federal tax bracket (pay higher taxes then, which was promoted by the person who sold you this strategy).

3. You are not told about having an employee in Nevada doing the work , therefore, no payroll is usually handled. Then you have a problem if money is taken out of the C corp that no employees where paid and the IRS is not going to like that. {cant make sense of this statement}

Employees in California , create nexus, therefore the corporation should register in California .

4. Other Incorporating companies don’t tell you that you really NEVER do any WORK in Nevada , and could be subject to audit by California at some point.

5. How do you receive money from the corporation later on? The C corp would be subject to double taxation!

3. What other Nevada Incorporation Services are Selling:

Nevada C Corporations:

Form a Nevada C corp for the following reasons:

1. Privacy with a C corp being in Nevada (meaning they don’t tell you about registering).

2. Pay 15% fed tax on the first 50k in profits (no state taxes in Nevada ).

3. You get fringe benefits, 100% deduction for health insurance.

4. They tell you that you don’t have to register and you save state income taxes.

What are the holes in this strategy:

1. The corporation may be deemed a PSC

2. They don’t discuss where and how you do payroll for yourself and how that may cause you to have to register in your state of operations.

3. You don’t do the work from Nevada , therefore you should register in your state.

4. Many fringe benefits you may not use, and you now get 100% deduction for health insurance in all entities (use to be only 70% and only 100% for C corps). Fringe benefits only apply to employees that they did not address how do to that. Many times they tell you later on you can also be the independent contractor so you don’t have to register (but forget to add you still need an employee and IC do not get fringe benefits.

5. They don’t cover double taxation if your goals are to reinvest money into this business.

Most companies promote Nevada for a tax or privacy issue both of which do not really work with Nevada corporations. Listed below are a few that we have come across.

Typical problems may be:

1. IRS problems -they may have personal tax problems, they want a corporation without their SSN on the SS4.

2. Being Sued -they want to protect their assets from lawsuit.

3. Getting Divorced -they want to lower their income so they want a C corp.

4. Alimony -they want to lower their income so they want a C corp

5. Child Support -they want to lower their income so they want a C corp.

6. Noncompete –they want to incorporate outside their state so they don’t violate the noncompete.

These strategies are very important to understand as to what our competition is promoting!

1. Privacy in Nevada :

What is sold:

People are told that Nevada is a private state because:

1. Nevada can use “nominees”* and keep their names out of state records.

2. Nevada does not exchange info with the IRS (this is true, but there is really no information to share because there is no state taxes in Nevada ).

3. There is no state income tax and no financial reports to complete.

4. You can use Bearer Shares and no one can find out who the owners are (not true).

What are the holes in this strategy:

1. Usually a C corp is recommended for privacy. This is the wrong entity to hold appreciating assets.

2. They don’t address areas where the nominee will not sign, many times this includes contracts, licenses and tax returns.

3. This one does not really mean anything anyway. (they may get audited because other companies do not emphasize with a corporation you have to do payroll).

4. No state income tax is true, but most of these people are not doing the work from Nevada , therefore they should register in their home state, and would pay state tax there.

5. Bearer Shares do not show up in any court cases in Nevada ’s history, it does exist in some offshore jurisdictions but not in Nevada according to our research. Nevada is difficult to find out who owns a corporation here because of the stock ledger statement at the RA’s address (not the actualstock ledger).

2. Moving Profits to Nevada from Home State Corporation:

What is Sold:

If you have a California C corp that earns 100k in profits and you pay state taxes of about 10% (actually 8.84%) you would pay about 10k in state income taxes. If you could form a Nevada C corp as a marketing company, you could expense out 100k in profits to Nevada and save the California state taxes and this might only cost you 3k to set up in Nevada .

What are the holes in this strategy:

1. The C corporation in Nevada is probably a PSC{what is a PSC} and would be subject to 35% tax on audit.

2. The C corp may be part of a controlled group with the California C corporation which means you only get 1 federal tax bracket (pay higher taxes then, which was promoted by the person who sold you this strategy).

3. You are not told about having an employee in Nevada doing the work , therefore, no payroll is usually handled. Then you have a problem if money is taken out of the C corp that no employees where paid and the IRS is not going to like that. {cant make sense of this statement}

Employees in California , create nexus, therefore the corporation should register in California .

4. Other Incorporating companies don’t tell you that you really NEVER do any WORK in Nevada , and could be subject to audit by California at some point.

5. How do you receive money from the corporation later on? The C corp would be subject to double taxation!

3. What other Nevada Incorporation Services are Selling:

Nevada C Corporations:

Form a Nevada C corp for the following reasons:

1. Privacy with a C corp being in Nevada (meaning they don’t tell you about registering).

2. Pay 15% fed tax on the first 50k in profits (no state taxes in Nevada ).

3. You get fringe benefits, 100% deduction for health insurance.

4. They tell you that you don’t have to register and you save state income taxes.

What are the holes in this strategy:

1. The corporation may be deemed a PSC

2. They don’t discuss where and how you do payroll for yourself and how that may cause you to have to register in your state of operations.

3. You don’t do the work from Nevada , therefore you should register in your state.

4. Many fringe benefits you may not use, and you now get 100% deduction for health insurance in all entities (use to be only 70% and only 100% for C corps). Fringe benefits only apply to employees that they did not address how do to that. Many times they tell you later on you can also be the independent contractor so you don’t have to register (but forget to add you still need an employee and IC do not get fringe benefits.

5. They don’t cover double taxation if your goals are to reinvest money into this business.