How the Rich Avoid Taxes

For once I actually am not using this phrase sarcastically. It’s through art, and is a form of tax fraud.

Maybe you’ve heard of it but it goes something like this. You buy a piece of art for $100 (let’s say a banana stapled to a piece of plywood), then your art appraiser buddy comes in and values that piece of art at $100,000 a year later. You, being a generous benefactor, donate your piece of art to the local museum. And then you write off $100,000 on your taxes as a charitable donation.

The IRS isn’t dumb and knows that people are doing this and are warning wealthy taxpayers to not fall for these schemes. The IRS is also actively investigating promoters of these schemes. To date, audits of this type of tax fraud have resulted in $5M in tax revenue.