Rare Original Guinness LP. Maybe one of the rarest on this label. The music is Folky Psych.
Tax shelter record label set up by Prelude Records. The records were never meant to be sold, but the label accountant enabled a cousin in Florida to make some cash by setting him up as a wholesale dealer.
...LEARN MORE ABOUT THIS TAX SCAM RECORD BELOW..
In the mid-1970s, some savvy individuals identified a section in the U.S. tax code in which investments in sound recordings could result in a reduction in taxes. Situations varied, and the entire process was fairly involved, but essentially, this is how it worked:
The owner of a record label would solicit potential investors to license (or lease) a master sound recording from them, which would then be turned into an album. The program outlined by the label focused almost entirely on the tax benefits, rather than profit from the venture itself.
Generally, the label wasn’t even a record company in the traditional sense, and was established solely to market master recordings. Once an investor signed on and forked over their cash—ranging from a few thousand dollars into the five figures—the label would take responsibility for overseeing the project, which included having the master evaluated by an appraiser who would place an inflated market value on the recording. There was much in the way of smoke and mirrors here.
For the next step, tapes were turned over to the packager, who was in charge of putting the finished product together, which included pressing up the vinyl and having the artwork created. Usually somewhere in the album’s credits was the name of an individual or a company listed as the copyright holder.
In addition to the mystery surrounding theses labels and the records they released, there has been much speculation as to the identity of the copyright holders, but in my research, I have confirmed that they were the names of investors. Though these investors didn’t actually own the masters, they had to be registered as such for legal reasons.
At the final stages, the packager placed the completed product in stores. The packager was also responsible for marketing, though, in reality, there wasn’t any serious attempt to promote these records. Most of the LPs that did arrive in stores just sat in the racks, as few knew they existed.
When the LPs invariably didn’t sell, the master recording was written off by the investor as a failed venture, using the inflated appraisal—which went as high as seven figures—as the basis for claiming a loss come tax season.
The label, like any other business, could write-off expenses, their much larger slice of the pie came when they leased a master recording, earning thousands of dollars per transaction.
It’s possible that hundreds—if not thousands—of tax shelter labels were created, but these companies didn’t exactly advertise their status, so their identity has largely kept record collectors guessing for years.
Two of the labels with the most known releases are Tiger Lily, which had ties to Morris Levy, the notorious owner of Roulette Records, and Guinness. The albums these labels released, many of which are now quite rare and sought-after by collectors, are commonly referred to as “tax scam records.”
Hoffman was responsible for creating the finished product and getting the Guinness albums into stores, but only a limited amount of records would have been pressed (likely 1,000 copies or less), and, again, with little to no promotion. After issuing more than 60 LPs during 1977, which was also the only year the label existed, Guinness Records quietly vanished.
