A great way to save on taxes if you can find them.
When a Congressman wants something, all he has to offer in return is legislative favors. If he pays them outright for something, that would be bribery and he could go to prison. But if he passes legislation to fund a bridge or an airport that supporter wants, that’s perfectly legal. And of course, that happens. Remember the bridge to nowhere?
In other cases it turns out to be targeted tax breaks, which is apparently legal also, even though it probably shouldn’t be. In this situation, the Congressman or Senator sponsors a bill that gives a tax break targeted at the supporter’s profession or to his company specifically.
Consider Wall Street. Wall Street traders are the largest contributor to political campaigns, so they get a lot of these favors directed their way. Here are two examples of tax breaks targeted at Wall Street hedge funds.
These breaks cut tax rates in half for Hedge Funds and their owners, from 39.6% to 20%. In this case, the company involved took it even farther with tax havens, cutting their tax rate all the way down to 1%. This is all perfectly legal. Some tax preferences are targeted at specific Wall Street traders, who shall remain nameless.
Obviously this stuff isn’t publicized, it’s hidden. But if we find it and meet the requirements, we can use it to the full extent of the law.
This isn’t anything new. It’s been around for a long time.
Here’s the reason for this post.
We’ve just found one of these. The language eliminating a tax break was published in the tax code. But the language that restored the tax break to a limited number of people was printed in another branch of the law. But it’s specifically a tax law. It carries the full impact of a tax law. Oddly enough, the requirements fit our purposes exactly. Someone up there is looking out for us.
Color me suspicious, but I don’t think that was a mistake. Those crafty devils in Congress did it on purpose.
This may seem awful, and it is, but thank God we found it. We use this stuff to save taxes for clients. If we can locate them, and if we meet the requirements, we can use them to the full extent of the law. This is what I describe as working in the seams of fully adjudicated tax law. It’s like being bullet proof.
This is where our intellect prowess comes into play. When we look at these things, we see things that other people don’t see.