Will Not Shelter Income.
Most professional observers agree that income tax avoidance schemes are on the rise.
This may be because of a reduction in Internal Revenue Service personnel, or increasing public familiarity with trusts and other entities, or a fundamental shift in the levels of greed and gullibility on the part of taxpayers. The problem is aggravated by the widespread use of the internet in deceptive marketing of abusive tax schemes. Trusts, family limited partnerships, limited liability companies and other devices may have legitimate tax-saving purposes or effects. When a promoter insists that creation of a trust allows an individual to treat all personal expenses as business deductions, or permits the individual to avoid taxation altogether based on an alleged provision of the U.S. Constitution, the scheme will be subject to challenge. The IRS has begun to step up its attacks on so-called Constitutional trusts , pure trusts and similar devices.