Word: taxing
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Dates: during 1960-1969
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...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...
...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 things as cars, general-expense accounts and life-insurance policies...
Absolute Secrecy. Nowhere was ABC more energetic than in California, where it mixed its usual shrewd salesmanship with strong appeals to patriotism. Describing a typical approach, Dr. Jack Hagadorn, a Costa Mesa physician, said that ABC representatives displayed a right-wing tract denouncing the use of tax money to aid Communist countries. By depriving the Government of such money, they argued, an individual could decide how it should be spent...
...basic flaws in ABC's tax-saving system, the state's fiduciary experts explained, were that: 1) the founder of the trust never really relinquished his control or interest in it; and 2) he never redly intended it to be set up exclusively for charitable purposes. Though ABC knew that this was contrary to federal statutes governing tax-free foundations, the state charged, the outfit tried to conceal the fact by enjoining its clients to absolute secrecy. "The cleverness of the scheme," said California Deputy Attorney General H. Warren Siegel, "was to get you to join by saying...
...others pleaded guilty. None received jail sentences, but they were placed on probation for up to three years and given fines as high as $7,000. Hayes and Walsh, among others, said that they would appeal on the ground that no criminal intent was involved, but their careers as tax consultants have already been ruined. ABC is virtually out of business...