Abusive Trust Tax Evasion Schemes - Law and Arguments (Section VI)


A Genuine Charity Must Benefit in Order to Claim a Valid Charitable Deduction

Charitable trusts that are exempt from tax are carefully defined in the tax laws. Arrangements are not exempt charitable trusts if they do not satisfy the requirements of the tax law, including the requirement that their true purpose be to benefit charity. Furthermore, supposed charitable payments made by a trust are not deductible charitable contributions where the payments are really for the benefit of the owner or the owner's family members. See Fausner v. Commissioner, 55 T.C. 620 (1971).