1. Micro-Captive Insurance Companies

A business forms its own tiny “insurance company,” pays large insurance premiums to it, and deducts those premiums.

The policies often cover highly specific or unlikely risks, and the premiums can be set however the owner wants.

Later on, funds can be distributed from the captive through tax-free dividends or loans.

2. Patent Stuffing a Roth IRA

A patent or trademark is transferred into a Roth IRA at a very low valuation.

Then the operating business pays large licensing fees back to the Roth.

So the business gets a deduction… and the Roth receives enormous tax-free income far beyond the annual contribution limits.

A creative way to “supercharge” a Roth IRA.

3. Syndicated Conservation Easements

A promoter buys inexpensive land, brings in investors through a partnership, and hires an appraiser who determines the land is worth 4x–10x more than what was paid.

The partnership donates a conservation easement - generating charitable deductions worth multiples of each investor’s actual investment.

What these 3 strategies have in common:

They’re featured on the IRS Dirty Dozen list… as abusive tax shelters.

Be careful who you take advice from.