Tax Strategy

This is a term we created because nothing else adequately described the pioneering work we were doing in tax avoidance.

We found there were some favorable tax treatments in the code that nobody was taking advantage. That made us think, if tax preparers were not taking advantage of favorable tax codes, what else were they missing? It turned out A LOT.

That was more than a decade ago. Since then we have found more favorable, seldom used, tax codes. But more important, we began combining different sections of the code, that had no obvious tax savings attributes, into tax cutting strategies. Hence the term we coined.

Today we have a collection of tax strategies that we customize to fit the specific circumstances of individual clients.

We have only one significant client that was already doing everything they could to save taxes. They came to us because of our world class service. Some tax professionals have terrible service.

If you want to know more about tax strategy, make an appointment here –

Or call (970) 242-5040.

Latest News on Tax Scams

IRS offers to settle with insurance tax scammers

Since 2014, the list of Dirty Dozen Tax Scams has included “captive” insurance companies. Although the law allows companies to create captive insurance companies to insure against legitimate risk. In that case, the insured company can deduct the premiums it pays for the insurance.

“However, in some “micro-captive” structures, promoters, accountants or wealth planners persuade business owners to participate in scams that lack many of the attributes of insurance.”

The IRS has pursued hundreds of cases against such schemes in Tax Court after auditing the taxpayer companies.  After prevailing in three recent U.S. Tax Court cases, the IRS said it has decided to offer settlements to 200 taxpayers who are currently under exam. The IRS began mailing out time-limited settlement offers spell out specific settlement terms. Taxpayers who don’t receive a letter aren’t eligible for this resolution, the IRS pointed out.

“The IRS noted that it has consistently disallowed the tax benefits claimed by taxpayers in abusive micro-captive structures. While some taxpayers have challenged the IRS position in court, none have been successful to date. The IRS said it would continue to disallow the tax benefits claimed in abusive micro-captive transactions and continue to defend its position in court. The IRS has decided, though, to offer to resolve some of the cases.”

What this means is that there are probably 1000s of these situations out there, but that only a few of them have been audited. Still fewer have been taken to court.

The famous “Son of Boss” resulted in 1,165 tax cases. The IRS is apparently attempting to clear out the individual cases by offering deals. The real target of this effort is to find the advisrrs pushing the illegal schemes & prosecute them. In ‘Son of Boss’ tax fraud case, KPMG pled guilty to tax fraud.

Taxpayers are unlikely to go to prison, but their advisers are likely to.


Some tax scams:

KPMG partner David Middendorf

Three former KPMG partners

Son of Boss

IRS Dirty Dozen

Apple: Best Company in the World?

The evidence is pretty clear to me, Apple is the best company in the world. If there was a hall of fame they would be the first inductee. Their computers, iPhones, etc. are arguably the best products in the world. But on the flip side of that, from what I can tell, they are the best in the world at tax avoidance. Whatever you think of their products, that’s a one, two punch that’s hard to overlook.

NEW YORK-JULY 24 – The Apple logo on the glass of the Apple Store, Fifth Avenue on July 24 2015 in Manhattan.

One of the biggest costs any Global company has to deal with is tax. There’s 50 different states and 200 different countries with different tax rates. Apple has been the absolute best at avoiding overseas tax (& state tax) since Jobs returned to Apple in 1997. Maybe longer.

Their overseas tax has essentially been zero for the entire time. They manage that with the techniques we describe in the following services on our website: Intellectual assets, interstate taxation & international taxation. That isn’t a coincidence. Ever since I saw a GAO article about multinationals paying less tax at lower rates than privately owned businesses, I have been studying Apples & other multinationals’ tax practices. Obviously, they are not advertising this stuff, but every now and then something happens that allows me to see behind the curtain. This article resulting from a leak of secret documents from Apple’s attorneys is one of them.

Their famous Double Irish with a Dutch Sandwich cut foreign sales outside the U.S. to zero tax until 2015. That arrangement became public in 2013 when Congress held Congressional hearings and Ireland was forced to alter their taxation practices. They restructured their tax strategies in 2014. If something happens again, they’ll restructure yet again. There’s too much money on the table to be lackadaisical about it.

Note. Apple’s Irish subsidiaries claimed that almost all of their income was not subject to taxes in Ireland or anywhere else in the world. And rightfully so. They were right. The Irish government agreed with them. They did nothing wrong. No charges were ever brought. But the EU got involved and Apple had to abandon the Double Irish tax strategy for (an island of Jersy) tax strategy.

This is about as important as it can get. Without out the billions they saved in overseas tax, Apple would never have become the most valuable business in the world. Neither would Google, Facebook, Caterpillar, etc. have achieved their massive valuations. I refer to Apple and other multinationals as businesses rather than a companies, because each of them have multiple companies under their umbrella. No multinational is a single company.

A leak of secret corporate records reveals some interesting things. By quietly transferring trademarks, patent rights and other intangible assets to offshore companies, global businesses cut their tax bills dramatically. Also, Apple’s attorneys mailed 14 questions for their attorneys’ offices in the Cayman Islands, the British Virgin Islands, Bermuda, the Isle of Man, Guernsey and Jersey, asking them to “confirm that an Irish company can conduct management activities . . . without being subject to taxation in your jurisdiction.” Apple also asked for assurances that the political climate would remain friendly: “Are there any developments suggesting that the law may change in an unfavorable way in the foreseeable future?”

For more interesting tax information you probably don’t know, visit our website [https:/] or our blog [https:/].

We do the same things, absent agreements with tax jurisdictions for privately owned companies. If you qualify, you could save hundreds of thousands of dollars a year. Or, if you’re not that big, you could save thousands or tens of thousands of dollars. Apple saved billions.



More on Tax Havens

Another tax haven company.


Just to be clear. This is perfectly legal. The U.S. has tax treaties covering all of this stuff with most, or probably all, of the tax havens nationwide. Holland is a tax haven. Great Britain is a tax haven. Luxembourg is a tax haven. It isn’t just your dodgy countries. This is an valid economic strategy to attract business to their country. For instance, one of the Big 4 accounting firms, the biggest of the big is headquartered in the Netherlands (Holland). Another is headquartered in Great Britain. We can whine all we want, but we signed the treaties.

You may have noticed, this wasn’t even an issue until the administration allowed the Bush tax cuts to expire, kicking in the largest tax increase in history. That’s when tax havens and tax immersions became big news.

Now they want to “REFORM TAXES”.  Guess what the final outcome of that will be. More Taxes.

When there’s tax reform, taxpayers lose.