The leaked tapes that show how the rich avoid taxes
5/27/202626 min
Tax avoidance -- that is, legally reducing your tax bill -- is as American as apple pie. But the line between tax avoidance and tax evasion is often a grey one.
On today’s show, a collaboration with Tax Notes, we listen in on the secret tapes that show how the wealthiest Americans avoid taxes.
We trace the lifecycle of a tax loophole: how it was born (in Malta), how it grew, how the Feds cracked down, and how the industry came to its rescue -- with the help of one high-ranking Trump administration official.
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This episode was produced by Luis Gallo and Emma Peaslee and edited by Marianne McCune. It was fact-checked by Sierra Juarez and engineered by Cena Loffredo and Robert Rodriguez. Alex Goldmark is Planet Money’s executive producer.
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Transcript preview
First 90 secondsSpeaker 00:00
This message comes from Avalara. What's it like running a business with Avalara? No thinking about tax and compliance. It's handled. Calculating, filing, validating accurately and audit defensively. Avalara, agentic tax and compliance with confidence.
Lauren Lauricchio· Guest0:16
This is Planet Money from NPR.
Nick Fountain· Host0:23
People go to incredible lengths to pay the smallest amount of taxes, sometimes in legal ways, sometimes in less than legal ways, in the shadows, and it's not always clear which is which. Figuring that out, that used to be the job of Carolyn Schenk. She spent nearly two decades at the IRS, and she says the way the IRS uncovered the newest, hottest tax crimes ran the gamut.
Carolyn Schenk· Guest0:49
Surveillance, wiretaps, old school trash pulls- Ooh ... Um, which is obviously a phenomenal source of information.
Nick Fountain· Host0:57
Yeah?
Carolyn Schenk· Guest0:57
Kinda dirty, but, you know- [laughs] ... Could be very, uh, fruitful.
Nick Fountain· Host1:01
I'm shocked y'all still do that. That's incredible.
Carolyn Schenk· Guest1:03
Mm-hmm.
Nick Fountain· Host1:04
Then, of course, there are the times when people reach out to them and say, "I've got information. I'd like to whistleblow."
Carolyn Schenk· Guest1:10
We've seen people come forward and sit with, you know, in a dark room or a bag on their head, and they've gone through the most intricate banking details.
Nick Fountain· Host1:17
Have you been in one of those interviews?
Carolyn Schenk· Guest1:18
Not with a bag over my head.
Nick Fountain· Host1:19
[laughs] She says the bag thing is just a term of art. Sometimes, though, people are afraid to talk even anonymously. Carolyn says one time, after a long day at