Abusive Trust Schemes and Off-shore Credit Cards

You've heard the old saying, "You can catch more flies with honey than with vinegar". In this case it means that even though the penalties may be stiff, some people rely on the historically low audit rates, and still try to 'put something over on the IRS'. On the other hand, we show every business owner how to make more money by just using just the 'good tax laws' passed by Congress, and avoiding trouble in the first place. We show you how to increase your after-tax profit, by correctly apply the laws Congress passed to benefit your business. We help you stay within the existing tax laws, with the extra after-tax profit that grows your business and improves your lifestyle. So, even if you aren't afraid of the IRS, listen up - Here are two areas that you Want to avoid for your own piece-of-mind.

The IRS is currently pursuing two different tax avoidance schemes - Abusive Trusts, and credit cards issued by offshore financial Institutions.

The trust-busting efforts of the IRS have been ongoing for at least the last 5 years, and shows no sign of letting up. The main target of their efforts are arrangements called "Pure Trusts", "Business Trusts", "Equipment Trusts", and a few others. These trusts are being promoted as ways to deduct things like normal household expenses by putting your home into a trust, or double-deducting equipment used in a business.

I don't care how much you paid for the seminar where they sold you the trust, or what 'authorities' they claim agree with what you have done, most business trusts are bogus, period.

The fact is, putting your business into a trust could also be one of the worst business decisions you ever made. The highest tax bracket is not reached by an individual or corporation until net income reaches nearly $300,000. A trust reaches that same high tax bracket with only about $8,000 in net income. Clearly not a wise choice.

The main 'hook' used by promoters of these schemes is that a trust will better protect your assets. There are other, legitimate, means to achieve asset protection. Check with your personal or business attorney for better ways.

In the mean time, if you have one of these trusts, you should call my office immediately, and begin the process of replacing your bogus trust with a legitimate entity, before the IRS does it for you.

The second IRS initiative is centered around tracking down people who are using credit cards issued by offshore financial institutions.

They have found that by back-tracking through these credit card transactions, they are able to identify people with money hidden in offshore tax havens in efforts to avoid paying tax on their world-wide income.

There are a huge number of these people, even though the estimate is down from the over one million offenders the IRS originally expected because they are finding that many of the credit card users are doing so for legitimate purposes like the inability to obtain credit from US banks, international travel, and international business.

Also, they have found many inactive cards, small-dollar accounts, and duplicate cards issued to the same individuals.

Taxpayers are being offered the opportunity to come forward, pay taxes owed, and avoid criminal prosecution if they turn over information about the promoters of this scheme.

For more information on this opportunity, send an e-mail inquiry to: VCI@irs.gov. Avoid these and other questionable tax schemes. Use the "good tax laws" that Congress passed for your small and home-based business, and you won't have to keep looking over your shoulder for that dreaded IRS Special Agent.

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