More Than Half of America's 100 Richest People Exploit Special Trusts to Avoid Estate Taxes
Secret IRS records show billionaires use trusts that let them pass fortunes to their heirs without paying estate tax. Will Congress end a tax shelter that has cost the Treasury untold billions?
by Jeff Ernsthausen, James Bandler, Justin Elliott and Patricia Callahan
Sept. 28, 10:45 a.m. EDT
Its well known, at least among tax lawyers and accountants for the ultrawealthy: The estate tax can be easily avoided by exploiting a loophole unwittingly created by Congress three decades ago. By using special trusts, a rarefied group of Americans has taken advantage of this loophole, reducing government revenues and fueling inequality.
There is no way for the public to know who uses these special trusts aside from when theyve been disclosed in lawsuits or securities filings. Theres also been no way to quantify just how much in estate tax has been lost to them, though, in 2013, the lawyer who pioneered the use of the most common one known as the grantor retained annuity trust, or GRAT estimated they may have cost the U.S. Treasury about $100 billion over the prior 13 years.
As Congress considers cracking down on GRATs and other trusts to help fund President Joe Bidens domestic agenda, a new analysis by ProPublica based on a trove of tax information about thousands of the wealthiest Americans sheds light on just how widespread the use of special trusts to dodge the estate tax has become.
https://www.propublica.org/article/more-than-half-of-americas-100-richest-people-exploit-special-trusts-to-avoid-estate-taxes
FoxNewsSucks
(10,417 posts)BeckyDem
(8,361 posts)I hope we can reduce their theft soon.
Trueblue1968
(17,193 posts)BeckyDem
(8,361 posts)I am not a tax lawyer, so I have no idea how it became an unintended consequence BUT, one would hope they would have fixed it by now.
SergeStorms
(19,186 posts)when it comes to the wealthy avoiding tax liabilities there are no "mistakes". I'd be willing to bet that law was written exactly as they intended it to be, so accountants and tax attorneys could " discover" that loophole quite easily.
BeckyDem
(8,361 posts)from "unwitting" terminology?
SergeStorms
(19,186 posts)Just kidding. The answer to your query: Never. That's how often we see accommodations for the poor that originated from "unwitting" terminology. Never.
jimfields33
(15,688 posts)Its the law that needs changed. Many of these rich corporations also follow the tax laws. It just sucks that they are there for them to use.
czarjak
(11,253 posts)Turbineguy
(37,288 posts)is the length of time probate takes. With a trust everything just passes to the beneficiaries.
TreasonousBastard
(43,049 posts)estates the wrong way.
Instead of taxing estates, tax the heirs and recipients as if it was ordinary income, or even unearned income.
BeckyDem
(8,361 posts)live love laugh
(13,078 posts)pfitz59
(10,302 posts)Prune the garden for better national health...