> According to Detwiler, Tennessee did not bother to notify him in advance that he was in violation.
Why would they? The people who use these "loopholes" know exactly what they're doing.
Why would they? The people who use these "loopholes" know exactly what they're doing.
You can get married in multiple states - though some states may share, most don't share marriage registration. Nothing will stop you. But you're still breaking the law of bigamy.
The person in question was arrested and charged with tax evasion and filing a false sales tax return. What he is alleged to have done is illegal.
The state was under no obligation to alert him to the fact that they believed he had committed tax evasion and filing a false sales tax return before they arrested him and charged him with a crime.
What he seems to have expected was an opportunity to pay to settle a criminal charge before it landed him in cuffs. This I should be able to pay to make it go away attitude seems especially prevalent in American society today.
This Montana car registration scheme is, I believe, often referred to as "loophole" not because it's legal but because so many people have been able to get away with it without consequence that it is seen by many as relatively low-risk.
It works for the billionaire class, why shouldn’t it work for everyone else?
This is what’s ultimately going to kill what’s happening in the US today: when people in power decide that the rule of law is just a suggestion, they’re going to find that there are people willing to use that against them in ways that they’re not going to like.
As George Carlin said, "It's a big club...and you ain't in it!"
When it comes to financial crime, billionaires get benefits, plebs get prison.
Gregory v. Helvering, decided by the US Supreme Court in 1935.
Edit: So if it's a legal arrangement that reduces taxes, then yes, it's legal.
https://www.canada.ca/en/revenue-agency/programs/about-canad...
TLDR: if the only reason for a transaction is tax avoidance, it may not be "illegal", but it may be disallowed (and presumably incorporated in subsequent legislation).
Similar is "wash sale" legislation: for example, selling a security for a tax loss and
- buying it back within 30 days
- buying a call option on that security.
I will guess that the former might get you just a reassessment (the first time). The latter... well, you're smart enough to know about options and tax-loss sale, now you need to demonstrate that you didn't do it for tax avoidance.
Not sure what US law (federal and gazillion states) has on this.
The tax evasion comes in when you fail to pay the use tax due and make false declarations or intentionally omit information when you make representations to the government (i.e. in tax filings).
The individual in question could have set up a Montana LLC, purchased a vehicle through it, paid the use tax due when he moved it to Tennessee and changed the registration within the 30 day limit.
Of course, there is no benefit of going out of your way to buy a car in Montana if you don't intend to drive it there, but the charges against this person relate to his failure to pay tax, not the mere fact that he set up an LLC.
If its just a monetary fine then there’s little reason to arrest somebody to immediately release them when you could’ve just told the accountant he needs to pay a fine or he’s going to be arrested.
It's akin to intentionally defrauding the state.
A quick Google search indicates that willful tax evasion is a Class E felony in Tennessee, with a potential prison term of 1-6 years.
The parent commenter seemed to be saying that if you could reduce your tax burden by putting something through a business then that's illegal even if you've not broken any specific laws.
Both hits are the same, resulting damage/death same. Law differentiates on (proven or disproven) intent and resulting sentencing difference may be huge. Or at least should be. World and people are unfortunately anything but simple generic use cases.
Million other cases proving there are good reasons to take intent into account, even if surface for mistreatment is not small. Unjustice otherwise would be bigger IMHO.
The world isn't simple and absolute, and the law isn't a computer program.
Government doesn't just give up power like that. And they sure don't give it up over the kicking and screaming of the myriad of industries that benefit as middle men and over the kicking and screaming of the "there ought to be a law" class of useful idiots that exist for every exist of policy.
You cannot reasonably create a law that covers all situations in their entirety. Even if you could, it would become obsolete the second it's in effect
When it comes to law, "simple" and "absolute" are basically mutually exclusive.
If the law is written simply, then lawyers will pick apart even the slightest ambiguity and the spirit of the law becomes irrelevant.
If the law is absolute, then it becomes verbose in order to close the loopholes.
If doing something isn't legal, then it's not a loophole. It's just something that someone thought they could get away with if the government didn't notice.
Sounds like this was never legal in Tennessee; calling it a "loophole" isn't correct.
However, it is not a loophole for tax obligations you might incur later in your use of the vehicle. If you continue to keep and use that vehicle in another state, that state may require you to register and tax the vehicle there, regardless of your valid MT registration.
The law permits the behaviour, don’t like it? Change it.
The problem is that this was hard to enforce, so now they have changed the law to something much simpler: if any corporate officer or beneficial owner is a resident of California, then the business is subject to Californian taxation.