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Medicare tax on his wage income yearly. Medicare tax, unlike
other payroll taxes, is not capped. The idea was that if
petitioner could reduce his wage income and convert some portion
to lease payments instead, he could reduce his overall tax
burden.
Even though petitioner stated that he was legally entitled
to lower his taxes, he was adamant about doing so in an
appropriate and legal manner. The leasing arrangement was ideal
for petitioner, because it was not merely a tax avoidance
vehicle; rather, he would earn a return on the equipment, and he
expected the venture to be profitable.
Moreover, petitioner specialized in the use of the leased
equipment in a class action setting. It was a point of pride
with petitioner that he have the most modern computer graphics
and videotape equipment. He wrote articles and delivered
lectures throughout the United States on the use of technology in
practicing law, particularly in the use of video reenactments,
videotape settlement brochures, and videotape mock trials. His
lectures would address the kinds of equipment to purchase, what
prices to pay, and the level of skill required of employees to
operate the equipment. To illustrate the complexity of the video
reenactments, petitioner testified that in one instance the law
firm charged over $80,000 for an elaborate recreation of a fiery
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