US President Barak Obama needs to look in his back yard to find out where some of those missing millions of cash and investments are sheltered behind a veil of secrecy.
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Although the United States has pioneered a new world of tax transparency and compliance with the Foreign Account Tax Compliance Act (FATCA), a small family house in Thomas Avenue, Cheyenne, Wyoming, is a doorway to a hidden financial world.
Behind the ordinary front door, this house is the home of more than 2,000 corporations.
Each has a locked box for mail and documents labelled as a ‘suite’.
The only comings and goings seem to be two women who deal with admin and take messages for the companies registered there.
The small house is the head office of Wyoming Corporate Services. The firm incorporates shell companies with shadow directors for anyone who prefers their financial affairs remain confidential.
Protection, secrecy and no state tax
The director is a lawyer, so any conversations or dealings with company owners are subject to attorney-client privilege, which is tough to break for the Internal Revenue Service (IRS) or other government departments.
The company’s web site makes some stark statements about the services on offer from a limited liability corporation.
“A Wyoming corporation or LLC offers its officers and directors the highest degree of protection from lawsuits filed by disgruntled creditors or overzealous plaintiff attorneys,” says the web site.
“Wyoming does not require the manager or the members of an LLC to be listed on a public database.
“You can operate your corporation and live anywhere in the world and you do not have to be a US citizen to incorporate in Wyoming.
“There are no state taxes in Wyoming on corporations. If you choose to incorporate in Wyoming, your company may not pay state taxes at all. Stop for a minute and think what you paid last year in your states income tax.”
Tax shelter reforms
Obama and the US Treasury have placed a huge amount of pressure on nations considered tax shelters to reform the way they work.
Banking secrecy in Switzerland was crushed when the Treasury discovered the nation’s financial institutions had actively conspired with US taxpayers to help them evade tax.
FATCA is holding the world’s financial system to a straightforward choice – join up and comply or forget trading in the US dollar system.
Yet the US states of Delaware, Wyoming and Nevada are home to nearly 700,000 shell corporations owned by individuals and companies from around the world which the US Treasury admits are unregulated and easy to manipulate as financial shelters.
FATCA only deals with offshore bank accounts and as these states are mainland America, the law does not apply to them.
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