A tax planning service is pitching an aggressive approach to cutting federal and state tax bills for self-employed professionals and investors, claiming business owners can legally reduce their federal income tax burden by up to 90 percent through a specific trust structure.
The service, operating through spendthrift trust tax planning, centers on IRS Tax Code 643b, which addresses certain trust distributions and deductions. The company targets individuals earning at least $100,000 annually in 1099 income—independent contractors, business owners, and freelancers who receive non-employee compensation.
The Numbers Behind the Strategy
According to the company’s projections, one New Jersey business owner will save $80,794 in taxes in 2026 using this approach. The strategy also claims to eliminate various investment-related taxes, including capital gains taxes on profitable asset sales, interest income taxes for passive investors, dividend taxes for stock market participants, rental income taxes for real estate investors, and royalty income taxes.
Beyond income tax reduction, the service promises to help clients avoid the IRMAA surcharge—the Income Related Monthly Adjustment Amount that increases Medicare Part B and Part D premiums for higher earners. IRMAA kicks in when modified adjusted gross income exceeds certain thresholds, adding hundreds or thousands of dollars to annual Medicare costs.
A Little-Known Tax Code Provision
The company describes its approach as “the Secret of the Rich,” suggesting that legal tax reduction strategies using spendthrift trusts remain largely unknown to the general public despite being codified in federal tax law. Spendthrift trusts are typically known for asset protection—they prevent beneficiaries from assigning their interest in the trust and shield assets from creditors.
The service claims to stop tax obligations across 43 states for various income types, though the mechanism for state tax elimination varies significantly by jurisdiction, as states maintain different rules regarding trust taxation and residency.
Ambitious Growth Plans
For 2026, the company has set a sales target of 84 trusts—seven per month—suggesting a business model built around individual client setups rather than mass-market distribution. This target indicates confidence in both the legality of the approach and demand among high-earning 1099 workers, a population that has grown substantially with the expansion of the gig economy and independent consulting.
The promise of five-figure annual tax savings for six-figure earners represents a significant financial incentive, though potential clients would be wise to consult independent tax professionals before implementing any advanced trust-based tax strategies. Tax code provisions often come with specific requirements, limitations, and audit risks that may not be immediately apparent in marketing materials.