For a while, the Law Office of John H. Eggertsen had a good thing going. In 1998, Eggertsen, a Michigan attorney, bought up "J & R's Little Harvest" for $500. He changed the name, reorganized the corporation, and created a stock ownership plan. Due to Eggertsen's clever tax maneuvering, Eggertsen and the Law Offices avoided paying taxes on income for years.
And it was all perfectly legal -- until it wasn't. In 2001, Congress released its mistake, closed the loophole Eggertsen was taking advantage of and gave companies four years to come into compliance. Eggertsen didn't and that failing ended up costing him dearly in a recent Sixth Circuit case.