Fraud: A Taxing Experience

The pitch was disarmingly simple. If the superrich could set up tax-free trusts and foundations, why couldn't the moderately wealthy also build cozy little shel ters from income and inheritance taxes?

The answer, according to an Illinois-based outfit called Americans Building Constitutionally (ABC), was a decided yes. ABC's expert tutors showed businessmen, small industrialists and well-to-do professionals how to set up family foundations, hire themselves and their relatives as directors, and then all but thumb their noses at federal and state tax collectors. The trick was to minimize income taxes by paying themselves small salaries and by writing off such...

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