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The Legend Of The Tax Scam Album

Blog > The Legend Of The Tax Scam Album

Written by Luke Sardello

Posted December 2nd, 2020

The 1970s was a wild time in America. Things were free and loose. New York City was a veritable Wild West with disco ruling the clubs and the mob ruling everything else, including flexing their muscle in the music industry by getting involved with record labels to record huge losses that didn’t exist. How did it work? In essence, they set up record labels as tax shelters, pressed records by anybody and everybody (oftentimes in small quantities) and would inflate the costs spent on them, thus reporting huge losses on tax returns that never actually existed. Originally they started by releasing albums by unknown artists and demo tapes that had been laying around, but some of the labels had become so brazen that they were releasing albums by mega artists that were signed to major labels like James Brown and The Beatles. As for the unknown recordings and demo tapes, oftentimes the labels never cleared rights to release any of the music and the artists were not informed or compensated. Some of the band names and song titles were even changed and some artists wouldn’t discover their music had been released until years later. Because of that, the artwork used on the covers generally had generic images with no pictures of the band. The IRS eventually caught wind of the scam and by the early 80s the gig was up.

Some of the labels in question include Tiger Lily, Baby Grand, Tomorrow, Guiness, TSG, Album Globe & Koala. Album Globe & Koala were a bit different than the other labels in that they were located in the South, where the others were either New York or LA-based. They also ran their scam well into the 80s and were the most egregious as they eventually just resorted to bootlegging albums by major artists.

Collectors started to realize in the mid 80s that some of these albums were produced in very low numbers and some of the LPs have become extremely rare and collectible. The labels never really intended on promoting the releases and oftentimes they ended up in some dusty warehouse or were destroyed altogether. Some have taken on mythical status with a handful numbering in the low single digits of known copies.

Top 10 Tax-Scam Releases From the 70s and 80s, in no particular order

Stonewall – Self Titled – Tiger Lily – 1976

Ricardo Marrero & The Group – A Taste – TSG - 1976

Newban – 2 – Guinness – 1977

Jackson Sisters – Self Titled – Tiger Lily – 1977

C.A.T. – Self Titled – Magna Glide – 1977

Frigate – Dreams of The Deep – CC – 1977

Sounds of the City Experience – Self Ttied – Tiger Lily – 1976

Carlos Franzetti – Grafitti – Guinness – 1977

Spanky Lee & Johnny Lee – Spanky & Johnny – Tiger Lily – 1976

Terea – Self Titled – Baby Grand – 1977