Romney’s Tax Evasion Scheme Was Legal When he Began Doing It

Romney has used the tax-exempt status of the Mormon Church to defer taxes for more than fifteen years!  All the time that he was (and still is) benefiting, the trust provided the church with less than what current law requires.

This is according to tax returns obtained by Bloomberg this month through a Freedom of Information Act.

In general, charities don’t owe capital gains taxes when they sell assets for a profit.  Trusts like Romney’s permit funders to benefit from that tax-free treatment.

Jonathan Blattmachr, a trusts and estates lawyer who set up hundreds of such vehicles in the 1990s, says:  “The main benefit from a charitable remainder trust is the renting from your favorite charity of its exemption from taxation.”   Despite the name, giving a gift or getting a charitable deduction “is just a throwaway,” he said. “I used to structure them so the value dedicated to charity was as close to zero as possible without being zero.”

Congress aggressively cracked down on this rich man’s scheme in 1997, but Romney was grandfathered in because he established his tax shelter in 1996 while he was an executive at Bain Capital.

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