Business Trusts
If IRC regulation 301.7701-4(b) recognizes the "Business Trust", and IRC regulation 1.641(a)-o reveals that the entity has no filing or reporting requirements under Chapter J, Subpart B. etc., of the Internal Revenue Code, and under IRC Section 642(C) 1, the Business Trust can contribute up to 100% of its adjusted Gross Income to Charity (including a 4947(A) 1 non-exempt charitable trust, referred to as a non-operational private foundation) and take a deduction against the Annual Adjusted Gross Income, then why is the IRS declaring the use of a "Business Trust which is recognized in 28, States as a legal "Business Entity", "abusive"?
Could it be because they recognize that the "Business Trust", which has it foundation in "Common Law", and is governed by the the "Common Law of Contracts" does not fall within the purview or Jurisdiction of the Internal Revenue Code, or the Internal Revenue Service' reporting or filing requriments? I really want an indepth research of this question, and I really want an honest answer.
1 Answer from Attorneys
Re: Business Trusts
To answer your question, NO. It is not because the IRS (or Congress who voted the tax code in) recognizes that a Business Trust falls outside their jurisdiction and therefore, in the tax code it is excepted. I am certain of this and I am being honest.
The reason is that many of the hucksters and sham artist "patriots" happened to have latched onto the phrase Business Trust because they can point to a few IRS code sections taken out of context that appear briefly to allow escape of taxation. But they haven't got it all put together correctly and I've poked many a hole in their arguments. Trusts which don't pay taxes are of a sort which pass through income or profit to other entities which are generally taxable, and in so doing, "K-1" (annually distribute) the profits so that the receiver(s) pay taxes on that income; the report is still made to the IRS and the receiver treats the K-1'd income just like he'd treat wage income on a W-4 or W-2 or dividend/interest income on a 1099. The trustee has the legal responsibility to declare the income of the beneficiaries.
I can tell by the "Common Law" terminology that your source of information is one of the hucksters, quite possibly a website. Don't spend money on bad advice from a non-lawyer (whom you won't be able to sue if you get caught & heavily fined or jailed!).
It's all b.s., very cleverly designed to sound like some great secret truth. I have nothing to gain from telling you the truth here.
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