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IRS targets five illegal trusts Tags: Consumerism Trust Wealth Protection The Internal Revenue Service (IRS) has started cracking down on five types of trusts that they have judged to be illegal. The IRS says that, of the three million active trusts in the U.S. today, nearly 6%, are considered "highly suspicious." And, according to the IRS’s director of Operation for Criminal Investigations, even if you are just a buyer of one of these trusts, you can face fines and jail. Keep in mind, howev [MORE....] The Internal Revenue Service (IRS) has started cracking down on five types of trusts that they have judged to be illegal. The IRS says that, of the three million active trusts in the U.S. today, nearly 6%, are considered "highly suspicious." And, according to the IRS’s director of Operation for Criminal Investigations, even if you are just a buyer of one of these trusts, you can face fines and jail. Keep in mind, however, that not all trusts are being targeted by the IRS, and the government has said that the majority of trust holders have nothing to fear. Millions of individuals and businesses are using trusts to set aside funds for certain individuals, corporations or organizations and are not the focus of this campaign. The trust arrangements that concern the IRS ignore the true ownership of assets or the substance of transactions. According to the IRS, promoters of these illegal trusts have made the claim that they allow the owners to retain full benefit of business or personal assets while reducing or eliminating taxes. The arrangements usually involve more than one trust. For example, a person may put business assets in an unincorporated business trust, transfer its business equipment to an equipment trust, place his home in a family residence trust, and set up a foreign trust to hold the other trust units and to receive trust income. In short, it's a "family of trusts" and the IRS says they are created solely to evade taxes. The IRS has issued warnings for you to be wary of arrangements claiming to make personal living expenses deductible, to create charitable deductions for payments benefitting you or your family or that may otherwise result in you having to pay no tax while not changing your control over your assets. The IRS has said that promoters of these arrangements are advertising "investment seminars" or "tax seminars" in local media, such as radio personal-finance shows and on the Internet. The IRS says the trusts may have names that refer to constitutional issues, fairness, equity or patriotic themes, but more often have names similar to common business organizations and legitimate trusts. The Criminal Division of the IRS has identified the five trusts it is targeting: Business Trust The owner of a business transfer the business to a trust (sometimes described as an unincorporated business trust) in exchange for units or certificates of beneficial interest, sometimes described as units of beneficial interest or UBIs (trust units). The business trust will make payments to the trust unit holders or to other trusts the owner has created(usually characterized as deductible business expenses or deductible distributions) that are purporting to reduce taxable income of the business trust to such an extent the where little or no tax is due from the business trust. Equipment or Service Trust The equipment trust is formed to hold equipment that is rented or leased to the business trust at inflated rates. The service trust is formed to provide services to the business trust, again often for inflated fees. Under these arrangements, the business trust claims to reduce its income by making allegedly deductible payments to the equipment or service trust. The equipment or service trust also attempts to reduce or eliminate its income by distributions to other trusts. Family Residence Trust The owner of the family residence transfers the residence to a trust. The trust claims the exchange resulted in a stepped-up basis for the property, while the owner reports no gain. The trust claims to be in the rental business and alleges to rent the residence back to the owner. In most cases, however, little or no rent is paid. Charitable Trust The owner transfers assets to a purported charitable trust and claims that either the payments to the trust are deductible or payments made by the trust are deductible charitable contributions. Payments are claimed to be made to charitable organizations, but, in fact, the payments are for the personal, educational, living or recreational expenses of the owner or his family. For example, the trust may pay for the college tuition of a child of the owner. Final Trust *In some multi-trust arrangements, the U.S. owner of one or more fraudulent trusts establishes an additional trust known as the final trust that acts as the trust for the others and receives all income from the other trusts. A final trust often is formed in an offshore that imposes little or no taxes on the trust. In some arrangements, more than one foreign trust is used, with the cash flowing from one trust to another until the money ultimately is distributed or made available to the U.S. owner, purportedly tax-free. This has been judged by the IRS as being nothing more than a money-laundering scheme. If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office. The Internal Revenue Service (IRS) has started cracking down on five types of trusts that they have judged to be illegal. The IRS says that, of the three million active trusts in the U.S. today, nearly 6%, are considered "highly suspicious." And, according to the IRS’s director of Operation for Criminal Investigations, even if you are just a buyer of one of these trusts, you can face fines and jail. Keep in mind, however, that not all trusts are being targeted by the IRS, and the government has said that the majority of trust holders have nothing to fear. Millions of individuals and businesses are using trusts to set aside funds for certain individuals, corporations or organizations and are not the focus of this campaign. The trust arrangements that concern the IRS ignore the true ownership of assets or the substance of transactions. According to the IRS, promoters of these illegal trusts have made the claim that they allow the owners to retain full benefit of business or personal assets while reducing or eliminating taxes. The arrangements usually involve more than one trust. For example, a person may put business assets in an unincorporated business trust, transfer its business equipment to an equipment trust, place his home in a family residence trust, and set up a foreign trust to hold the other trust units and to receive trust income. In short, it's a "family of trusts" and the IRS says they are created solely to evade taxes. The IRS has issued warnings for you to be wary of arrangements claiming to make personal living expenses deductible, to create charitable deductions for payments benefitting you or your family or that may otherwise result in you having to pay no tax while not changing your control over your assets. The IRS has said that promoters of these arrangements are advertising "investment seminars" or "tax seminars" in local media, such as radio personal-finance shows and on the Internet. The IRS says the trusts may have names that refer to constitutional issues, fairness, equity or patriotic themes, but more often have names similar to common business organizations and legitimate trusts. The Criminal Division of the IRS has identified the five trusts it is targeting: Business Trust The owner of a business transfer the business to a trust (sometimes described as an unincorporated business trust) in exchange for units or certificates of beneficial interest, sometimes described as units of beneficial interest or UBIs (trust units). The business trust will make payments to the trust unit holders or to other trusts the owner has created(usually characterized as deductible business expenses or deductible distributions) that are purporting to reduce taxable income of the business trust to such an extent the where little or no tax is due from the business trust. Equipment or Service Trust The equipment trust is formed to hold equipment that is rented or leased to the business trust at inflated rates. The service trust is formed to provide services to the business trust, again often for inflated fees. Under these arrangements, the business trust claims to reduce its income by making allegedly deductible payments to the equipment or service trust. The equipment or service trust also attempts to reduce or eliminate its income by distributions to other trusts. Family Residence Trust The owner of the family residence transfers the residence to a trust. The trust claims the exchange resulted in a stepped-up basis for the property, while the owner reports no gain. The trust claims to be in the rental business and alleges to rent the residence back to the owner. In most cases, however, little or no rent is paid. Charitable Trust The owner transfers assets to a purported charitable trust and claims that either the payments to the trust are deductible or payments made by the trust are deductible charitable contributions. Payments are claimed to be made to charitable organizations, but, in fact, the payments are for the personal, educational, living or recreational expenses of the owner or his family. For example, the trust may pay for the college tuition of a child of the owner. Final Trust *In some multi-trust arrangements, the U.S. owner of one or more fraudulent trusts establishes an additional trust known as the final trust that acts as the trust for the others and receives all income from the other trusts. A final trust often is formed in an offshore that imposes little or no taxes on the trust. In some arrangements, more than one foreign trust is used, with the cash flowing from one trust to another until the money ultimately is distributed or made available to the U.S. owner, purportedly tax-free. This has been judged by the IRS as being nothing more than a money-laundering scheme. If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office. http://www.assetprotectioncorp.com/5illegaltrusts.ht

Did you mean, Lil Charlie and the peas?

I glad to hear your back (NIR) You got the best connections available. Sorry to hear your brother in law (M) is in trouble again. If he would only hear you more often.

This is the second time i hear this, I hope its not true. But this is Iraq, so we dont know what is going to happen. Any way Its good thing to know we have a "new Guru in town".

Dear members, before you go on pissing on your boss and scolding him, take a deep breath calm down and wait till this is confirmed. This sudden urges don’t speak well of a millionaire to be. Also if this happens to not be true, there going to piss at you back and the fire you. How are you going to explain to your wife you’ve been fired and pissed at on the same day and no money to show for.

Sure, he wants his business to last longer.

Nice post Niko. I dont know how this + thing works but i give you a + too.

Excelent Thanks/

So if you feel VIP is important and are interested in a month trail at my expense just "PM" and tell me why you think it's important. INCLUDE A GOOD JOKE. If you not good spirited, have a sense of humor, and enjoy life......just hit that little red negative sign. SMILE EVERYONE LIFE IS SHORT! I think Vip is as important as this RV for many of us that depend on giving our families and friends a chance for a better living. A JOKE? my whole life has been a joke but Im full of hope for all the big Dinarvets family we are and wish you all this hapens soon. Really soon. Thanks Gerald.

Great post

Great Post Barboza

Nice post, We are a family. At least I see it that way.. God bless you and this site.

Thanks Sonny

Nice thanks Superfly

We are all adults here just blowing off steam. I can tell it's getting down to the wire. God always does things in His timing so we can see what we are really made of! Are you proud of who you've become over this? I am proud to be on this ride with all of you fine people, and I can handle getting my cat kicked once in a while if it bears some of your burden Teresa You just made me proud of you. Great comment, you’re so intellectual. That’s the way to go.