One of probably the most intriguing and little-known corners of the music business’s huge, seedy underbelly facilities round a bunch of uncommon data launched between 1976 and 1978 for one objective solely: Scamming the IRS. During this two-year interval, a mixture of artful and bumbling crooks took benefit of a tax loophole that — not in contrast to the plot hatched in Mel Brooks’ The Producers — allowed labels to jot down off losses on albums that had supposedly flopped.
Writer Aaron Milenski, in his contribution to writer Eilon Paz’s new compendium on file collectors and accumulating, Dust and Grooves Vol. 2: Further Adventures in Record Collecting, digs into the historical past of those tax rip-off labels, explaining how the fraud labored and highlighting among the most notable and intriguing releases. As Milenski notes, many of those albums comprised unreleased recordings or outtakes, generally by recognizable names (Sly Stone, Richard Pryor, and Charlie Daniels all had recordings launched on tax rip-off labels). But usually, finishing up this scheme required recording and releasing new music — and probably the most adept exploiters of this tax loophole knew that one of the best ways to not arouse suspicion was to enlist musicians and artists who may really play.
As a end result, these tax rip-off labels wound up creating catalogs stuffed with fascinating albums that span numerous genres, from onerous rock, R&B, and loner people to funk, psych, and prog. In the many years since, uncommon copies of those albums have change into extremely sought-after grails for collectors. In the excerpt under (which has been edited and condensed from the model you’ll discover in Dust & Grooves Vol. 2), Milenski digs into the rise and fall of those tax rip-off labels, the interior workings of the con, and that perennial stress within the music enterprise between revenue and artwork.
In early 1976, infamous shyster Morris Levy, recognized for mob connections and working a profitable file label with out paying a cent to any artists on it, made a discovery. He couldn’t declare vital tax losses for low-selling data on his Roulette label. Still, if he created a wholly new label that misplaced (or appeared to lose) bundles, this might offset any income he made by Roulette. Voila: Tiger Lily Records was born!
Word by some means unfold, and shortly, there was an abundance of comparable labels: Guinness, Dellwood, Western Hemisphere, Album World, Tomorrow, Illusion, C.C., Rocking Horse, Tribute, Baby Grand, and TSG. By 1978, these labels had been no extra. The loophole had been closed due to a subsequent court docket case involving the apparent tax fraud perpetrated by way of C.C. Records confirmed that the scheme was unsustainable. Yet, throughout two wonderful years, a plethora of fascinating albums had been unleashed on the world. Collectors have been scurrying to search out what are actually generally known as tax rip-off data ever since.
To create a music label for optimum cheat-the-IRS impact, Levy needed to press up some precise vinyl, and he and his cronies produced as many various particular person releases as they may in a brief interval. How did they do that? Take no matter is in your vault: canceled releases, in-progress releases that may now as a substitute be relegated to obscurity, and demo tapes that had been rejected or nonetheless wanted to be assessed. Then make a couple of bodily copies of all these data, dump them into cutout bins and warehouses, perhaps even destroy a few of them, and with intelligent accounting, declare that you just launched 1000’s and 1000’s of albums whereas promoting just about nothing.
In most instances, the artists had no thought their recordings had been ever launched. instance is the Snowball Album on Guinness. It’s a wonderful pop-rock LP with a couple of mildly psychedelic moments, recorded in 1971 by Joey Carbone and Richie Zito, years earlier than they’d succeed as musicians and producers. When I found this file, I discovered an e-mail handle for Joey Carbone and wrote him about it. Within minutes, I acquired a reply saying, “This was launched?” In another instances, the artists knew concerning the undertaking and will use it as a tax dodge of their very own. They may declare losses for the prices of studio recording and musical gear. In some instances, the label gave them the chance to market their very own launch on a tiny scale. There is an current video of John Scoggins, whose energy pop album is one in all Tiger Lily’s absolute best releases, hawking it on an area TV present.
Unintentional as it could be, these data are tailored for collectors. They are primarily main label-quality, some are by well-known artists, and a few are excellent (or not less than very bizarre), but they’re as uncommon because the tiniest little non-public press file.
Thes One (one-half of duo People Under the Stairs), who has been profitable within the music business as each a performer and on the manufacturing and enterprise finish, famous: “I got here from extra the soul and funk facet of accumulating, and it simply so occurs that among the rarest stuff is on tax scams. Once I ended up in that zone, I puzzled what else was on the market.”
The C.C. label is probably the most incredible instance of learn how to create a ton of one thing out of nothing. Unlike different tax rip-off labels, they weren’t affiliated with a extra distinguished label, however had been run by an accountant with purchasers within the music world. They would make investments cash in C.C. to say tax losses and get paperwork displaying they misplaced ten occasions as a lot because the precise funding.
The data had been put collectively rapidly in a hilarious vogue. The genius behind the scenes (who requested anonymity) had pals with a studio, in order that they despatched a couple of bands there to rapidly file as a lot as potential. These periods had been credited to a number of fictitious bands. Also in his employment was a cell engineer despatched to native bars in New York and New Jersey to surreptitiously tape stay reveals of native cowl bands, none of whom had any thought what was taking place! As a end result, the label launched every little thing from these stay cowl variations to blues piano instrumentals to tone generator experiments to jams and full freakouts. The latter grew to become the quite outstanding LP Dreams Of The Deep, credited to Frigate, and is a serious collectible amongst psychedelic and outsider music followers. The perpetrators of C.C. ended up in court docket, and the primary argument towards them was that it was apparent from listening to those releases that they had been by no means anticipated to be commercially profitable.
Bart [Bealmear, a collector and writer], famous that regardless of all makes an attempt to fail, many of those data ended up being of high quality in a method that will make Mel Brooks proud: “When I first heard concerning the tax rip-off, I simply assumed they’d all both encompass songs by dreadful bands or be stuffed with nature feels like wind rustling. But I quickly discovered there was a shocking quantity of A&R concerned, not less than with Tiger Lily. It appears Morris Levy knew that the LPs launched on T.L. ought to attain some customary by way of inventive high quality. If the I.R.S. got here calling, a case could possibly be made: “Hey, we took an opportunity, however no one purchased it.” Perhaps this is the reason Levy by no means confronted the type of authorized strain C.C. Records did.
Collin Makamson owns numerous tax rip-off data and has ideas each good and dangerous about them: “I suppose to me it simply lays naked and reveals what, at its coronary heart, the music business will do or is prepared to do, which is to extend income irrespective of the implications. Even although the loophole that the tax scammers had been capable of exploit solely existed for a handful of years, it says all of it: that the individuals in cost are prepared to strive something and do something to earn money. I do know Sopranos memes are enjoyable, and Hesh is a cool character, however I wouldn’t purchase a horse from Morris Levy. Would you? This comes off as very excessive and mighty, besides that I’ve been accumulating tax rip-off data since I discovered about their existence. I’ll admit they’re a kind of private fetish object for me.
“The attract is simple, and it often has little to do with the music and definitely not the graphic design. Some, nonetheless, are wonderful, and it’s a disgrace that nice albums by John Scoggins, Stonewall, Glenn Faria, or Terea ended up as simply one other line merchandise in some accountant’s ledger.” Geofrey Weiss, a collector who labored within the music enterprise, additionally notes the attraction: “In the surreal dance of creativity and commerce that was the 20th century music enterprise, little was extra unlikely than the tax rip-off file: thrown-away leftovers, repositioned as a enterprise fraud, reclaimed as forgotten gems.”
More than a decade later, as proof you possibly can’t preserve a superb criminal down, a number of of the Tax Scam figures discovered new methods to cheat individuals. Morris Levy was concerned in a Eighties scheme whereby MCA Records offered warehouses of data to traders, promising giant portions by well-known artists like Lynyrd Skynyrd. Instead, they pocketed the cash and left the suckers with a whole lot of 1000’s of LPs no one wished. (This story is documented within the e-book Stiffed by William Knoedelseder.) Album World resurfaced as Album Globe. This time, they tried to revenue by overtly repackaging titles by well-knowns like Led Zeppelin, Cheap Trick, the Beach Boys, and Barbra Streisand. These had been mastered from LPs, not grasp tapes, and launched with out the permission or data of the artists or authentic file firms.
The most shameless tax-related act of all was a collection of ads in music magazines, and even a how-to file, providing to help traders in tax shelter schemes involving supposed problems with beforehand unreleased recordings by well-liked artists. These data by no means got here to be, however remarkably, the adverts included the names of everybody concerned on this unlawful scheme!
Bart Bealmear owns a duplicate of this LP, which he describes as “fairly dry listening.” Still, he notes that tax shelters are technically authorized, and the precise ledger sheet included with this LP reveals that perhaps they lastly discovered a protected solution to run this sort of rip-off with out fearing authorized motion. Still, even these guys ultimately went too far. Bart says, “UM Leasing licensed the recordings used on Happy Michaelmas, a group consisting of Beatles Christmas messages; a court docket later dominated they’d no proper to take action.” It’s one more chapter within the ongoing story of music executives on the lookout for methods to beat the system. Just a few years later, the 1987 film Wall Street popularized the catchphrase, “Greed is nice.” Whether it’s or not, it definitely led to the discharge of some memorable data.
Dust and Grooves Vol. 2: Further Adventures in Record Collecting is out there for buy now.
