These Rare '70s Albums Are Now A Collector's Jackpot
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The 1970s was a rich, rewarding decade for music lovers. It gave us groundbreaking songs, tunes that left everyone saying "huh?," and everything in between. It's in that latter in-between space that albums known as "tax scam" LPs exist. They were created as part of a short-lived scheme that ran between 1976 and 1978, in which labels deliberately put out albums that would sell poorly, wrote them off as losses, and consequently paid less tax to the IRS.
Although a slew of tax scam LPs were pressed across several musical genres, they were usually done in minuscule quantities — sometimes featuring known names, but not always with the artists' knowledge. While much of this vinyl was dumped, some of it landed on record store shelves, and the surviving copies are a notable point of interest among vinyl collectors. One of the most valuable tax scam records is the 1976 self-titled album "Stonewall" under the Tiger Lily label. Recorded and then released without the band's knowledge, it took until 2019 for it to be released officially — five years after one of its first pressings sold for over $14,000 in an online auction.
Other rare finds include Frigate's 1977 album "Dreams of the Deep" from CC Records (described as an "absolutely FRIED psych rock mind wiper" in a Facebook post by Belltower Records), as well as "Newban" and "Newban 2," both highly sought-after LPs issued by Guinness Records. Included in the tax scam record mix are Mario Sprouse's "Sounds of the City Experience" and John Scoggins' "Pressed for Time," but these two artists knew their albums were being produced — they just genuinely believed that Tiger Lily was a legitimate music label.
One man was originally behind the tax dodge, but others quickly followed
According to Aaron Milenski, a contributing author to "Dust and Grooves Volume 2: Further Adventures in Record Collecting," music business entrepreneur and mob associate Morris Levy was the mastermind behind the tax scam albums. Levy, who owned Roulette Records at the time, realized that, for tax purposes, the company's profits could be offset by losses from a separate label. However, physical vinyls still had to be pressed for the scheme to work — hence the limited quantities of tax scam records. Before long, Levy wasn't the only one exploiting the tax loophole at the expense of a range of musicians. Label owners raced to press anything they could get their hands on, regardless of what it was or which artists were responsible for it.
While many albums the dodgy labels produced were of poor to middling quality — they were never meant to be listened to, after all — that wasn't the case for all of them. To throw some plausible deniability into the mix, some labels (notably Tiger Lily) funneled enough resources into a few supposed junk LPs to make them sound good, which delighted collectors who were fortunate enough to stumble upon these limited pressings.
Production of the tax scam albums ended in 1978, but unscrupulous labels and individuals continued to try and game the system throughout the 1980s. Around the same time, collectors caught wind of the rare albums and began seeking them out. Although some of the records put out during the peak of the tax dodge scheme have been reissued, including "Pressed for Time," eager vinyl fans continue to scour flea markets and estate sales for many tax scam originals in hopes of turning up some hidden treasure.