And pay themselves just enough income to fall under the standard exemption amount. Hmmmm.
Excerpts from United States v. Bahrs, N.D. Fla., No. 1:05-CV-138-SPM, 8/29/06:
This is a suit brought by the United States to collect unpaid income taxes for the tax years 1995 and 1996 from the Bahrs, who had filed returns for those years showing no tax liability. They accomplished this by creating two trusts-American Professional Services Enterprises Business Trust ("Business Trust") and In God We Trust Family Trust ("Family Trust"). The Bahrs assigned all of their income to the Business Trust, deducted business expenses, and then paid the remainder of the money to the Family Trust, which deducted personal expenses before paying the remaining income to the Bahrs. The remaining income just happened to be the exact amount of personal exemptions and standard deductions claimed, thus resulting in tax returns showing that no taxes were owed for those years.
The main argument made by the Bahrs is that the subject property is not subject to foreclosure because it is held not by them, but by the Mission, thus shielding it from any tax liens or foreclosures.
The subject property held in the Family Trust was quit-claimed to the Mission on June 11, 1998, ostensibly as a "religious contribution". John Bahrs testified at deposition that he felt a calling to become a missionary and wanted to be associated with a "religious entity," so he decided, after conversations with representatives of the Church of Yahweh, that he would create the Mission to carry out charitable works. Notably, Bahrs does not know where the Church of Yahweh is located or what it does, he is the sole missionary of the organization, and the Mission's "congregation" consists of his three children, who assist him in caregiving for the elderly.
Comments