States Eye Reforms Aimed at Shell Corporation Secrecy

The United States ranks first globally for financial secrecy, according to the latest report by the Tax Justice Network and US authorities are trying to do something about it. The Pandora Papers show secretive business structures are thriving in states including Delaware, Nevada, South Dakota, and Wyoming. A few states are taking the problem seriously including New York, which debated but failed to enact the LLC Transparency Act (A9415/S8439) earlier this year. Among other things, the proposed law would require full disclosure of the beneficial owners of limited liability companies and the creation of a publicly searchable database of this information. On this episode of Talking Tax, we hear two perspectives on New York’s proposal. Ryan Gurule, policy director of the Financial Accountability and Corporate Transparency Coalition, contends the states have an important role to play to halt illicit financial flows that facilitate tax evasion and money laundering. Elizabeth “Beth” Garvey, a shareholder in the government policy practice of Greenberg Traurig LLP, cautions that New York’s proposal would create a “backdoor tax” and interfere with the state’s business development objectives. Gurule and Garvey spoke with Bloomberg Tax senior correspondent Michael Bologna. Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.