Nevada As Offshore Tax Haven?

California policymakers are seeking to close the state's yawning "tax gap"-- the difference between the taxes that are supposed to be paid to the state and the taxes that actually get collected in a timely way-- and have Nevada's murky tax laws squarely in their sights. As the Review-Journal reports, a recent IRS report suggests that California officials are probably right to suspect Nevada-related tax avoidance scams:

When the Internal Revenue Service in November announced its upcoming mass audits of suspected tax dodgers, the federal agency singled out the Silver State --and Delaware and Wyoming -- as being especially susceptible to fraud abuse. Those same three states rival offshore financial centers when it comes to offering company registrations with "cloaking features," such as minimal information requirements and limited oversight, according to a year-old federal government report on money laundering.

California policymakers are asking all the right questions, and are (correctly) pursuing not just the companies and individuals who are stashing their money in tax havens like Nevada, but the unethical tax advisors who concoct the schemes that make this possible. Nevada policymakers should do their part and take a hard look at the privacy measures that currently make Nevada look like the Cayman Islands to a tax-averse corporation.