How? If your business makes any income you get slammed with Self-Employment tax. I almost had a refund this year until hitting that particular line in the 1040.
You've answered your own question. If your business spends all its money and reports no profit, then it pays no tax. If you sufficiently co-mingle your personal finances with your business finances (e.g., that vacation to Hawaii was actually a business trip, yeah, that's it), I suspect you can do pretty well with driving down your taxes.
(Note: I don't actually do anything like this, but I can see how you could pull it off.)
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