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by MrEfficiency 2823 days ago
That is the dream.

But remember that the IRS doesnt care much about the 90%. They DO care about the 0.1%.

Doing something like that is a high risk way of getting audited.

4 comments

But it's very hard to prove such fraud. If you artificially pump the value of an artist by a few well placed public auctions - the art might have been bought by a front man for the owner, then the IRS doesn't have a leg to stand on, as a "market value" for the artist has been established (my mother worked on auctions for a time and there were a lot of shady schemes to pump up value of collectibles).

The 0.1 have access to the very best tax advisors money can buy (and probably some IRS insider info as well).

There was just an article about how the IRS is doing fewer audits in recent years due to lack of resources and political cover.
Propublica: After Budget Cuts, the IRS’ Work Against Tax Cheats Is Facing “Collapse”

https://www.propublica.org/article/after-budget-cuts-the-irs...

Getting audited is bad, why? The point is: can the IRS make their case and prove that whatever behavior by a taxpayer is not actually sound and proper?

If you make a seemingly reasonable decision, even with an ultimate (very) beneficial tax outcome, there is not much that can be challenged if no laws have been broken.

Add to that the army of lawyers that on meaningful cases will keep pushing things out forever, and you should have an understanding as to why tax authorities around the world do not like to challenge the very wealthy that much. They often also control companies and assets that employ people, which can be used as leverage in negotiations.

Its not easy going after the super rich. They can, and do, hire the best and brightest.