While it is gaining in the ranks of notorious divorce cases in a city full of divorce horror stories, the break up of Frank and Jamie McCourt, owners of the L.A. Dodgers, has produced all kinds of interesting subplots. The latest comes from papers filed by Jamie McCourt’s attorneys in the couples divorce proceedings that show the McCourts made $108 million in income from 2004 – 2009, yet paid zero in federal and state income taxes during that period of time. How, might you ask, is that legally possible? A variety of perfectly legal, if morally questionable, tools can help multi-millionaires pay next to nothing in taxes, from claiming losses to “charitable” donations. How can the average tax-paying Joe get out of their taxes?
Dennis Brager, tax attorney at the tax litigation law firm Brager Tax Law Group; former senior tax attorney for the IRS Office of Chief Counsel