Yes, several billionaires, including Jeff Bezos, Elon Musk, and George Soros, have paid zero federal income tax in certain years by using legal strategies like borrowing against appreciated assets (the "buy, borrow, die" method) instead of selling them, thus avoiding capital gains taxes and realizing wealth through non-taxable loans, according to investigations by ProPublica and reports from Americans For Tax Fairness. While not illegal, this approach allows the ultra-wealthy to pay significantly lower effective tax rates than middle-class workers, as their primary wealth growth (unrealized gains) isn't taxed until sold, says Yahoo Finance.
In some years, billionaires such as Jeff Bezos, Elon Musk and George Soros paid no federal income taxes at all. Billionaires avoid these taxes by taking out special ultra-low-interest loans available only to them and using their assets as collateral.
Back in 2007 and 2011, Bezos didn't pay any federal income taxes, according to a 2021 ProPublica review of decades of IRS data belonging to America's wealthiest businessmen.
Al Capone. A federal grand jury indicted notorious gangster Al Capone, leader of the Chicago Outfit crime syndicate, with 22 counts of tax evasion totaling over $200,000 in 1931 (equivalent to more $3.8 million today).
Yes, Elon Musk pays taxes, but his payments vary significantly year-to-year, often coming in large bursts when he sells Tesla stock to realize gains from stock options, as seen with his reported $11 billion federal tax bill for 2021, a massive payment triggered by stock option exercises, contrasting with other years where he's paid little to no federal income tax due to holding appreciating stock, according to reports from Americans For Tax Fairness (2021), ABC7 (2021), ProPublica (2021), and CNBC (2021). His wealth, primarily tied to stock, isn't taxed until shares are sold, meaning he can have huge wealth growth with little income tax in certain years, but triggers massive tax bills when exercising options or selling shares, as detailed in reports from Americans For Tax Fairness (undated), CNN (2022), and The Guardian (2021).
ELON MUSK: "I'm the largest individual taxpayer in history, so I paid $10 billion in tax."
One easy way to pay no income tax is to have little or no taxable income. For tax year 2025, taxpayers receive a standard deduction of $15,750 (singles or married persons filing separately) or $31,500 (marrieds filing jointly). For heads of households, the standard deduction is $23,625 for tax year 2025.
Here's the key insight: while Swift remains a US tax resident who pays taxes on worldwide income, expats doing comparable work abroad can apply her tax strategies while ALSO leveraging powerful expat benefits she can't access.
Yes, Jeff Bezos famously paid himself a modest salary of around $80,000 per year at Amazon for about two decades, choosing equity over large paychecks to align with his founder's mindset and drive wealth through increased company value, not more salary. He felt his significant ownership stake provided ample incentive, and he was proud of this decision, which allowed him to avoid higher taxes while his stock value soared.
Under the proposal, for instance, a billionaire cannot transfer wealth or incur a debt to their children to reduce liability, cannot escape wealth taxation by transferring property to a trust, and cannot work around limits on such transfers by selling assets for less than market value.
Pop superstar Beyoncé and the IRS agree that she owes $709.20 in tax and penalties instead of the nearly $2.7 million that the agency had asserted in a deficiency notice, according to a stipulated decision approved by the Tax Court . The decision document in Knowles-Carter v.
Al Capone is likely the most notorious tax evader in history. Although well-known as the king of Chicago gangsters, the federal government couldn't put together any criminal charges that would stick until they nailed Capone for failing to pay taxes.
“Tesla: The company has used mechanisms like deferred tax assets, research and development credits, and massive deductions from Elon Musk's stock-based compensation to reduce its U.S. federal income tax to near zero in profitable years.”
From films to cricket, these icons earned massive incomes and paid crores back to the country. Amitabh Bachchan tops the list with ₹120 crore in taxes, followed by Shah Rukh Khan at ₹92 crore and Vijay Thalapathy at ₹80 crore.
The IRS 7-year rule primarily applies to keeping records for claiming a deduction for bad debts or losses from worthless securities, allowing a longer period to file for a credit or refund, but it's not a universal audit limit; it's often a recommended safe buffer for general record-keeping, with the standard IRS audit period usually being 3 years, extending to 6 years for substantial income omission (over 25%) or foreign income issues, and indefinitely for fraud.
One-time forgiveness, officially known as First-Time Penalty Abatement (FTA), is an IRS program that allows qualified taxpayers to have certain penalties removed from their tax accounts.
The higher-income household still comes out well ahead, but the income tax has narrowed the inequality. Abolishing the income tax would be a huge windfall for high-income households. Those making between $500,000 and $1 million would, based on recent tax filings, save on average $155,000 every year.
Here are five more strategies that you can use to get even more tax-free income:
The $1,000 a month rule is a retirement guideline suggesting you need about $240,000 saved for every $1,000 per month in desired income, based on a 5% annual withdrawal rate (5% of $240k is $12k/year, or $1k/month). It's a simple way to set savings goals, but it doesn't account for inflation, taxes, or other income like Social Security, so it's best used as a starting point, not a complete plan.