How do billionaires get out of paying taxes? Can &quot;normal people&quot; do the same thing? How do billionaires avoid having to pay taxes? Can &quot;normal&quot; people with average incomes do the same thing?
By putting their finances into a complicated legal structure, moving assets and income through various jurisdictions, and lobbying to make that legal. They also employ highly skilled lawyers who understand the tax code and possible loopholes very well. I'm pretty sure that a &quot;normal&quot; person with average income could reduce their taxes to close to zero by hiring specialist lawyers, but the cost of those lawyers would exceed the tax savings. For a billionaire, the ratio between legal costs and tax savings is different.
It is certainly possible to give gifts to your relatives (or to anyone really). But, the harder question is whether or not it is really a gift. A characterization of a transaction as a gift is less likely to be questioned if it is between related parties, and it is less likely to be questioned if it isn't obviously a quid pro quo. If you told your brother that you would make a gift to him of all of the appreciation in the house, if he made the guarantee in advance, it would be a guarantee fee (or an equitable or nominee ownership) rather than a gift. But, with the timing and motives described in this post, it is certainly a closer call. The fact that the "gift" amount exactly matches the appreciation casts doubt on the theory that this is really a gift, but doesn't absolutely clearly require the conclusion that it is not. This could end up being resolved either way, and ultimately, could be very dependent upon the detailed facts and how they are presented to the person determining if tax is owed.
Yes. You could use student loan proceeds for these purposes. Student loan proceeds are not tracked or traced. If you did so on a wholesale basis (taking out loans intending to cancel your courses before tuition it due to raise money for other purposes), you might be engaged in loan fraud, but since student loans cannot be discharged in bankruptcy, while other loans can be discharged in bankruptcy, that would be a very stupid, self-defeating kind of fraud (which isn't to say that I haven't encountered it once or twice). Some tax preferred accounts (e.g. for retirement) have contribution limits based upon your taxable earned income, however, so while you could use student loan funds to put into those accounts, there would be strict limits on your contributions due to your low income.
If your LLC made 300K before paying salaries, and paid 300K total in salaries, that seems quite reasonable. You might have a point if the order of events was: LLC pays 100K in salaries, LLC gets sued for 200K, LLC raises salaries by 200K. Note that the owners have to pay income tax on 300k earnings, plus whatever else employers and employees have to pay. And an LLC doesn't pay salaries to owners, it pays salaries to employees who be sheer coincidence are also owners. It's a different matter if the company pays dividends. A company must keep dividends low enough so that it can run its business, including paying damages for lawsuits that it knows about. So if the company planned all along to pay 300k in dividends, then is sued for 200k, they likely have to reduce the dividends.
It goes into the Consolidated Fund and thereafter is used the same way as the rest of the government's money; there's no special destination for this particular set of tax receipts. That was also the case for its predecessor tax, stamp duty (which still exists for some other transactions other than the ones in land covered by SDLT). Without tracing the legislative history too far, the Finance Act 2003 created SDLT as a tax, and provided for it to be collected by HM Revenue &amp; Customs the Commissioners for Revenue and Customs Act 2005 says that HMRC must put all their receipts into the Consolidated Fund, apart from certain exceptions which don't include SDLT As a matter of policy, HM Treasury strongly prefers the &quot;one big pot&quot; system. See the Government manual Managing Public Money, 2021 ed., at 5.6.3: Proposals to create new taxes in order to assign their proceeds to new spending proposals are rarely acceptable. Decisions on tax are for Treasury ministers, who are reluctant to compromise their future fiscal freedom to make decision. The general reason here is that if there is one big pot of money, the government has a freer hand than if there were (say) separate funds that could only be spent on road maintenance, or agricultural subsidies, or whatever. Additionally, within the context of the &quot;Exchequer Pyramid&quot; also explained in that document, the one big pot is used in overnight market operations by the Debt Management Office, and having more money available for that purpose is generally useful. While this particular facet of the system has been in operation only since 1998, the general pattern of having one big pot of money has been policy since at least the early 19th century. When &quot;stamp duty&quot; originated in 1694 (5 Wm &amp; Mary c. 21) it was one of several taxes created at about that time, and intended to fund the Nine Years' War (as we now call it; obviously not a label of the time). Over the next century, it was continued and expanded, since it was found to be convenient to administer, and capable of raising good sums of money. But that time period then brushes into the modernisation of the public finances, including the creation of the Consolidated Fund as mentioned. Rather than taxes being special affairs created for specific spending needs, we had a form of government with more predictable outgoings and an interest in being systematic about the management of the national debt. In the case of SDLT, its creation involved rationalising the aspect of &quot;stamp duty&quot; that was relevant to most people's lives (buying property). One policy aim was that by severing it from the former version of stamp duty, it would become easier to provide different rules for how it could work, specific to the nature of the property market. There is no particular policy need to have it fund any given aspect of public spending, including war with France. These days, war with France would be paid for out of general funds.
Under German law, if you are sentenced to a fine because you committed a crime, that fine is measured in Tagessätze (day fine). One day worth of fines is the 30th part of your monthly income, adjusted according to the criminal's personal and economic situation. Basis for that is Criminal Code sec 40 (§ 40 StGB). There is, however, no corresponding principle for prison sentences. The reasoning behind that is, that a wealthy person would hardly be able to &quot;improve&quot; their time in prison compared to a less wealthy one. In fact, they would &quot;lose more money&quot; in the meantime.
Ignoring the question of whether knowingly trying to deceive the IRS about the nature and purposes of an organization is a crime or even a lie, running any sort of tax-exempt organization for your own benefit is tax evasion and a crime. What you propose actually does happen in the US, but it's non commonly done by claiming tax exempt status a religious organization. Instead of registering fake churches (which strictly speaking isn't necessary as user6726's answer says), it's simpler just to register a fake charity. You don't need any of those things that you've noted that the IRS says a religious organization must have. Done intelligently, people running these scam charities do just enough charitable work to avoid investigation by the authorities while diverting the majority of earnings and donations of the organization to themselves through salaries and payments to for-profit businesses they own. Done not-so-intelligently, virtually all the proceeds of the scam charity end up in the hands the people running it, and those people often get caught and end up in jail. If proven, the charges against Steve Bannon would be a notable recent example of this. While it's less common with religious organizations, people have done time for misusing a religious organization's tax exempt status. For example a Virginia couple were sentenced to prison for crimes relating to a scheme to route profits from a business through a religion organization they had set up.
The list is enormous. For example, if subpoenaed to appear in a legal case, you must appear pursuant to the order. If ordered to pay child support, you must pay child support. If you are an executive in a company, you may not act on the basis of non-private information regarding the company. Your comment that &quot;If it's not detailed on this list, you'll probably never be concerned with it, eg, gun registration laws and other situations that don't apply to most residents&quot; applies to a number of things on the list, for example most people are not called for jury duty, probably the majority of people are not subject to property tax requirements. most people do not have to register for the draft. By adding &quot;If X...&quot;, you can make these into universal rules – everybody that meets the filing requirements must file federal income taxes. Non-citizens have a few additional requirements, but they are a drop in the bucket compared to the general case, obey the law which applies to everyone.