In contrast to tax scams, as the following quote shows, minimizing taxes is "natural" and legal:
Since the enactment of income taxes, taxpayers have sought to reduce tax burdens. It seems as natural as breathing. Long ago, the legendary Judge Learned Hand of the United States Second Circuit Court of Appeals noted “that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. . . . [F]or nobody owes any public duty to pay more [taxes] than the law demands. . . .”(n1)
n1: Commissioner v. Newman, 159 F.2d 848, 850–51 (2d Cir. 1947) (Hand, J., dissenting). Similarly, Judge Hand, in Helvering v. Gregory, 69 F.2d 809, 810 (2d Cir. 1934), on behalf of the court, said: “Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.” (citing United States v. Isham, 84 U.S. (17 Wall.) 496, 506 (1873); Bullen v. Wisconsin, 240 U.S. 625, 630 (1916)).
In conclusion, while minimizing taxes is legal and natural, taxpayers must always avoid illegal tax schemes. It is essential to keep in mind that taxpayers have no obligation to pay more taxes than what the law demands. By taking full advantage of the tax rules and regulations, taxpayers can legally reduce their tax burden.
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Stephen R. Akers, Jonathan G. Blattmachr & F. Ladson Boyle, Creating Intentional Grantor Trusts, 44 Real Prop., Tr. & Estate L.J. 207 (Summer 2009) (SSRN link). ↩︎
I wrote this blog post with the help of an AI assistant, GrammarlyGO, an advanced algorithms and machine learning technology.