Paypal has this FAQ which might help understand implications:
The US government and Congress have perfected the art of harassing honest small business and individual tax payers, imposing greater and greater burdens on them while letting billionaires go scot free.
The onerous FATCA/FBAR filing requirements for foreign bank accounts caused many foreign banks to close accounts of expat Americans. All it did was greatly inconvenience many honest taxpayers who suddenly lost direct deposit and other essential financial services.
The U.S. government has long condemned prominent offshore financial centers, where liberal rules and guarantees of discretion have drawn oligarchs, business tycoons and politicians.
But a burgeoning American trust industry is increasingly sheltering the assets of international millionaires and billionaires by promising levels of protection and secrecy that rival or surpass those offered in overseas tax havens. That shield, which is near-absolute, has insulated the industry from meaningful oversight and allowed it to forge new footholds in U.S. states.
This is the story of the incredible cloning tax break.
In 2004, David Baszucki, fresh off a stint as a radio host in Santa Cruz, Calif., started a tiny video-game company. It was eligible for a tax break that lets investors in small businesses avoid millions of dollars in capital gains taxes if the start-ups hit it big.
Today Mr. Baszucki’s company, Roblox, the maker of one of the world’s most popular video-gaming platforms, is valued at about $60 billion. Mr. Baszucki is worth an estimated $7 billion.
Yet he and his extended family are reaping big benefits from a tax break aimed at small businesses.
Mr. Baszucki and his relatives have been able to multiply the tax break at least 12 times. Among those poised to avoid millions of dollars in capital gains taxes are Mr. Baszucki’s wife, his four children, his mother-in-law and even his first cousin-in-law, according to securities filings and people with knowledge of the matter.