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Planet Money

The leaked tapes that show how the rich avoid taxes

Planet Money

NPR

News, Business

4.630.5K Ratings

🗓️ 27 May 2026

⏱️ 26 minutes

🧾️ Download transcript

Summary

Tax avoidance -- that is, legally reducing your tax bill -- is as American as apple pie. But the line between tax avoidance and tax evasion is often a grey one. 

On today’s show, a collaboration with Tax Notes, we listen in on the secret tapes that show how the wealthiest Americans avoid taxes. 

We trace the lifecycle of a tax loophole: how it was born (in Malta), how it grew, how the Feds cracked down, and how the industry came to its rescue -- with the help of one high-ranking Trump administration official.  

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This episode was produced by Luis Gallo and Emma Peaslee and edited by Marianne McCune. It was fact-checked by Sierra Juarez and engineered by Cena Loffredo and Robert Rodriguez. Alex Goldmark is Planet Money’s executive producer.

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Transcript

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0:00.0

This is Planet Money from NPR.

0:06.0

People go to incredible lengths to pay the smallest amount of taxes.

0:11.5

Sometimes in legal ways, sometimes in less than legal ways, in the shadows.

0:17.2

And it's not always clear which is which.

0:19.8

Figuring that out, that used to be the job of Carolyn Schenck.

0:23.8

She spent nearly two decades at the IRS.

0:26.4

And she says the way the IRS uncovered the newest, hottest tax crimes ran the gamut.

0:33.1

Surveillance, wiretaps, old school trash pools, which is obviously a phenomenal source of information. Yeah? Kind of dirty, but, you know, could be very fruitful. I'm shocked y'all still do that. That's incredible. Then, of course, there are the times when people reach out to them and say, I've got information. I'd like to whistleblow. We've seen people come forward and sit with, you know, in a dark room or a bag on their head, and they've gone through the most intricate banking details. Have you been in one of those interviews? Not with a bag over my head. She says the bag thing is just a term of art. Sometimes, though, people are afraid to talk even anonymously. Carolyn says one time after a long day at a conference, she got to her hotel room.

1:15.1

And someone shoved, and I'm not sure how they even did it because it was so thick, an enormous

1:21.3

manila envelope with a whole bunch of bank documents in it underneath my hotel room door,

1:26.3

which was totally unnerving because...

1:28.5

How did they know where I was staying?

1:30.2

Exactly.

1:31.3

She says she changed rooms, and the documents, they turned into a case.

1:35.6

Can you say any more details about it?

1:37.3

No, other than I was extremely freaked out.

1:40.8

And I also was thinking to myself, you know, what if this thing got shoved and stuck?

1:46.2

Like, they should have put it in two different envelopes, right?

1:48.4

Yeah, come on, guys.

1:50.0

Right.

1:50.8

The case I wanted to talk with Carolyn about came from a much less dramatic tip.

1:57.2

And it really paints a picture of how hard it is to draw a clear line between what is okay and what is not when it comes to taxes.

...

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