Re: Why I Pay Too Much in Taxes

From:	IN%"frissell@panix.com"  "Duncan Frissell" 10-MAY-1996 19:11:58.23

>Such a list could be published openly in any case since discussing
>techniques of tax fraud is legal.  Even advocay would be legal in almost all
>cases.  (Since tax fraud is a non-violent crime, you don't have any of these
>'agitating an angry mob' scenarios.)  As long as you avoided conspiring with
>anyone, you can discuss techniques all you like.  Some *participants* might
>like to subscribe anonymously however.

	There are, however, some possible difficulties with this.
	A. If the Feds know about some scheme, they are more likely to be able
to thwart it. The extent to which this is true, of course, depends on the
method(s) being used.
	B. Sting operations.

	These are arguments for the list being closed in format, with some
form of security check. The major problem with this is that the security check 
will break the anonymnity of participants... you may not want to trust whoever
is doing the checking, even if they're public (as they should be for this).
	-Allen

There's no particular need for tax fraud, except by little guys. The big 
guys have lots of legal techniques. A prime example was the notorious 
$1000->$100,000 cattle futures transaction that Hillary Rodham Clinto 
did, just before entering the White House. Clearly, it wasn't an 
investment: it was a scheme to let some rich Arkansas guy pay a bribe - 
legally.  A cooperative broker sets up a "short" position and a "long" 
position on a trade - then the positions get assigned, after the market 
has made its move, such that the guy "loses" the $100k  and Hillary "has 
a profit".

On Sat, 11 May 1996, Alan Horowitz wrote:

> There's no particular need for tax fraud, except by little guys. The big 
> guys have lots of legal techniques. A prime example was the notorious 
> $1000->$100,000 cattle futures transaction that Hillary Rodham Clinto 
> did, just before entering the White House. Clearly, it wasn't an 
> investment: it was a scheme to let some rich Arkansas guy pay a bribe - 
> legally.  A cooperative broker sets up a "short" position and a "long" 
> position on a trade - then the positions get assigned, after the market 
> has made its move, such that the guy "loses" the $100k  and Hillary "has 
> a profit".
> 

The technique is called "parking", and it has been illegal for many 
years. Basically it requires at least 2 people to conduct the "resource 
shifting". Two accounts are established, one takes all losses against a 
commodity and the other gets the wins. This is rolled over almost 
exponetially by "pyramiding" contracts on margin. As such, the person or 
institution who requires the "loss" handles the losing account directly. 
The other account may or may not be handled by the first party, but they 
have access to it, or use an intermediary such as a broker to funnel the 
"wins" accordingly.


...Paul