Misuse of trusts

There has been an increase of promoters of abusive tax transactions who have been urging taxpayers to transfer their assets into trusts. These promoters promise a variety of benefits, such as the reduction of income subject to tax, deductions for personal expenses paid by the trust and reduction of gift or estate taxes. Everyone should be aware that these kinds of trust arrangements do not produce the tax benefits being promised by their promoters, and that the IRS is actively examining these types of trust arrangements. In recent years there have been close to a dozen injunctions obtained against such promoters, and a number of these promoters, along with their clients have been criminally prosecuted. Accordingly, prior to entering into any trust arrangements, always seek out the advice of a trusted tax professional.

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