These Rare 1970s Albums Have Become a Collector’s Windfall

The 1970s were a remarkable era for music fans, delivering landmark records, oddball releases, and everything in between. In that latter category fall the so-called “tax scam” LPs: records produced during a brief scheme from 1976 to 1978, when labels intentionally issued albums that were expected to flop, wrote them off as losses, and reduced what they owed the IRS.

Tax scam LPs turned up across many genres, but they were usually pressed in tiny numbers. Some featured recognizable names, though not always with the artists’ awareness. Most copies were discarded, but a few made it onto store shelves, and the survivors have become especially interesting to vinyl collectors. Among the most valuable is the 1976 self-titled album “Stonewall” on the Tiger Lily label. It was recorded and released without the band’s knowledge, and an early pressing later fetched more than $14,000 at an online auction. The album would not receive an official release until years later.

Other hard-to-find titles include Frigate’s 1977 album “Dreams of the Deep” on CC Records, described in a Belltower Records Facebook post as an “absolutely FRIED psych rock mind wiper,” along with “Newban” and “Newban 2,” both sought-after LPs from Guinness Records. Also part of the tax scam catalog are Mario Sprouse’s “Sounds of the City Experience” and John Scoggins’ “Pressed for Time,” though those two musicians knew their albums were being made; they simply believed Tiger Lily was a legitimate label.

The scheme began with one man, then spread quickly

According to Aaron Milenski, a contributing author to “Dust and Grooves Volume 2: Further Adventures in Record Collecting,” music entrepreneur and mob associate Morris Levy was the force behind the tax scam album strategy. Levy, who owned Roulette Records, figured the company’s profits could be balanced by losses from a separate label for tax purposes. But the plan still required physical records to be pressed, which helps explain why the releases were so limited. Soon, Levy was not the only one taking advantage of the loophole, as other label owners rushed to press whatever they could, regardless of the music or who was responsible for it.

Many of the albums created under these shady arrangements were of poor or middling quality, since they were never intended to be listened to. Still, that was not true across the board. To preserve some credibility, certain labels — especially Tiger Lily — invested enough in a few supposed throwaway LPs to make them sound good, which later thrilled collectors lucky enough to find them.

Production of tax scam albums ended in 1978, but dishonest labels and individuals kept trying to exploit the system throughout the 1980s. Around the same time, collectors started learning about these rare records and began hunting them down. Although some titles from the height of the scheme have since been reissued, including “Pressed for Time,” many vinyl fans still search flea markets and estate sales for original copies in hopes of discovering a hidden gem.