Q: Is it considered tax evasion to form an LLC for an online business in any state using a virtual mailbox address?
A: In California, merely forming an LLC for an online business using a virtual mailbox address is not, in itself, tax evasion. However, if one uses this setup to intentionally misrepresent their business operations, earnings, or other pertinent financial information to avoid paying taxes, it could be viewed as tax evasion or fraud. When forming an LLC, the chosen registered address should be able to receive service of process. Moreover, California requires businesses operating within the state to register and pay appropriate taxes on income earned in California, regardless of where the LLC is formed. It's essential to accurately report all income and adhere to tax obligations based on the actual business activity. If there's doubt about the correct procedures or potential tax implications, consulting with a tax professional or attorney is recommended.
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