They exploit the IRS mistake on the Form W-9 and uses the Delaware LLC to evade taxes. Wyoming and Nevada are also popular, as explained in this footnote1.
It started in 1996 when the IRS changed the law on limited liability companies (LLC). The LLC is an invisible corporation. It does not file a tax return!
Let tell you about Boris who is from Kiev, Ukraine. He needs a U.S. bank account to park his money. He can’t have the account in his name; that would lead a trail straight back to him. So, he finds an online company to form a Delaware LLC.
This is where the “do it yourself” tax pirate can start. However, you will read, below, that to open a U.S. bank account you need to come to the U.S. Tax Pirates never use their real name so coming to the U.S. is a little tricky. This firm suggests using PayPal. But you will read a little later on another method for the tax pirate.
Below is an online business. It is an honest and legitimate business. It was not established to help the tax pirate. As with any online business, you can be sitting in on the beach as you log in.
Now, it is time to get the LLC with the IRS tax number. As you may know, an LLC owned by one person never files an IRS tax return. Matter of fact, there is no IRS tax return for the single owner LLC. Here is the order page. To get an IRS tax number, you have to have a social security card. But for a few hundred dollars more, the tax pirate can get one. Also, I can improve the U.S. appearance with a Delaware business telephone for $10 a month.
The better tax pirates don’t do things themselves. They want a U.S. bank account to launder their bounties. So, on the dark web, you find facilitators that open the LLC, get the IRS tax number, and open the bank account. All of the banks have an online bank.
The facilitator sells the LLC along with the bank account login passwords to our pirate, and he is good to go. He can receive wire transfers, take credit card payments, and make payments.
The identity theft tax pirate can always get the IRS tax number by using a stolen identity to complete the IRS online form. Oh yes, it all online and takes about five minutes.