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Interesting "Tax Avoiders"-Related Tidbit

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Turns out the company that published Tax Avoiders had its own run-in with the government...

 

http://ftp.resource.org/courts.gov/c/F2/874/874.F2d.584.88-1765.html

http://cases.justia.com/us-court-of-appeals/F2/872/898/172421/

 

I don't fully understand it, but American Videogame Leasing was apparently part of some tax shelter scheme. That jibes with what was said in this 2004 thread:

 

http://www.atariage.com/forums/topic/47898-more-tax-avoiders-insight-kinda-long-revela/

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Seems pretty straightforward, certain business losses are non-taxable. So, what these guys did was talk to wealthy "investors" and got them to buy video games valued at $35 (or probably $50 or $60 whatever). Then, when they sell the games for $5, or the games don't sell at all, everyone who invested get's to claim a loss of income, dropping down into a lower tax bracket or otherwise paying less taxes.

 

However, I think the way that everyone makes serious money on this is that the investors don't pay the full price of the game, imagine this scenerio:

 

The "games" are supposedly worth 50 bucks. The investor only pays 5 bucks, but get's to count his losses as 50 bucks, because that's what the game company "told" him it would sell for (really everyone involved knows what's going on). So the game company makes 5 bucks, and the investor gets to hide 50 bucks from the government.

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Let there be no doubt that Darrell Wagner and Todd Clark Holm, mentioned on the front cover, are real people. It looks like Wagner is a tax consultant in Oregon. Holm was given a 30-day suspension by the SEC in 1984 (http://www.sec.gov/news/digest/1984/dig091984.pdf). Holm was also based in Oregon. I don't know if that's where H&L Schwartz was.

Edited by CRV

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Go here, click on "Name," search for "Dunhill Electronics," and you'll find records pertaining to hundreds of software titles done for American Videogame Leasing and Educational Computer Program Leasing.

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