TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, October 30, 2012

Calvin Johnson 'Skeptical' of Mitt Romney's Taxes

Huffington Post:  Tax Expert Calvin Johnson 'Skeptical' Of Mitt Romney's Taxes:

A respected tax attorney and deficit hawk wrote a letter to the editor of Tax Notes on Monday saying that, "There is good reason to be skeptical" of Mitt Romney's claim to have paid all the taxes he legally owes.

The letter, by University of Texas Law School Professor Calvin Johnson, focuses on two trusts Romney has set up: one for his children, which is worth over $100 million, and an $87 million retirement trust. These trusts have grown at an enormous rate -- Johnson notes that they have been more than 10 times as profitable as Warren Buffett's investments over the same time frame. Johnson writes that Romney may have played fast and loose with the law by undervaluing Bain Capital assets that were contributed to the trusts. By undervaluing the assets, Romney could avoid paying gift taxes.

(Hat Tip: Marty McMahon.)

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It would be nice to read the letter, except that Tax Notes does not allow that. Maybe you can work on them to be a bit more open.

Posted by: Mark | Oct 30, 2012 12:50:27 PM

He seems to think that Mitt contributed a single unified credit gift and then did no more estate planning, which is sort of weird. For all we know, Romney was using $25MM GRATs each year. Give me a client with a lot of liquid assets and a strong desire to minimize estate tax, and I'll get a trust up to that size in no time.

Posted by: jpe | Oct 31, 2012 9:02:08 AM