The IRS recently issued a warning to taxpayers about tax scams involving trusts.

There has been an increase in promoters of abusive tax transactions who urge unsuspecting clients 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 abusive trust arrangements will not produce the tax benefits promised by their promoters and that the IRS is actively examining these kinds of trust arrangements. In recent years there have been over a dozen injunctions obtained against such promoters, and a number of promoters, along with their clients have been criminally prosecuted. Therefore, prior to entering into any trust arrangements, you should seek the advice of a trusted tax professional.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.