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Tuesday, November 6, 2012

Romney Haunted by Missing Tax Returns as Campaign Draws to Close

Huffington Post:  Mitt Romney Haunted by Missing Tax Returns as Campaign Draws to Close:

As the GOP presidential candidate faced pressure over the past year to release more financial information, it was widely presumed that at some point he would buckle and follow a tradition started by his father, who released 12 years of tax returns. People who knew him, however, warned that there was no chance he'd release the returns.

They were right. Mitt Romney made it. But the journey has left him broken and battered. ...

"Romney's refusal during his campaign to release his past tax returns betrayed a contempt for the electorate and for the democratic process, which relies on voters having the requisite information to make informed decisions," said University of Southern California law professor Ed Kleinbard. "The reason for the tradition of releasing past tax returns -- not returns prepared in the years an individual is running for the presidency -- is to demonstrate that the candidate fully and fairly complied with the tax laws when the spotlight of the election was not already on him." ...

Both Bain and Romney flirted with the edge of legality by using sham derivative transactions to mask investments in U.S. stocks, lowering their American tax burden. The IRS has been cracking down on this activity since 2010, as HuffPost reported in August. Thousands of pages of Bain documents released by Gawker also reveal that Bain gamed its management fees in order to help its investors avoid paying taxes –- a tactic that is straightforwardly illegal, according to Victor Fleisher, a tax expert and professor of law at the University of Colorado. ...

The sheer scope of Romney’s personal tax avoidance efforts also shed light on iniquities in the tax code. Very wealthy Americans have many perfectly legal options to reduce their tax burden -– tactics not available to poor and middle-class taxpayers. ... "The most interesting thing he disclosed was what we saw initially on the 2010 return -– the vast array of offshore investment vehicles that plainly reflected a lot of aggressive tax planning," said New York University Law School professor Daniel Shaviro. ...

"Governor Romney's limited disclosures revealed hints of troubling issues, and his stonewalling of the electorate therefore left many troubled by the unknown breadth of the gulf between the carefully cultivated image of the candidate, on the one hand, and the authentic man, on the other," Kleinbard said. ...

In the closing days of the campaign, University of Texas law professor Calvin Johnson penned an op-ed for Tax Notes suggesting that Romney illegally undervalued his investments in order to dodge taxes on two enormous trust funds. Bloomberg detailed Romney's use of a bogus charity to reduce his tax burden, a tactic which the IRS banned just months after Romney had set up his own, which he continues to profit from.

Update:

http://taxprof.typepad.com/taxprof_blog/2012/11/romney-haunted-by-missing.html

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Comments

Some people are so full of hate that they don't even quit when it's over.

Posted by: Woody | Nov 6, 2012 4:58:01 PM

More disinformation from the statists. Rev. Proc. 92-73 does not, contrary to Prof. Fleisher's statement, make the practice illegal. A Rev. Proc. is not law, it is merely the IRS' position; it does not even have the authority of a Treasury Regulation. The duplicity of these supposed tax experts is disgusting -- especially when they are quiet about situations such as Charlie Rangel still being on Ways & Means, the violations of IRC 6103, and the like. No real thought, just a lot of argumentum ad hominem.

Posted by: TexEcon | Nov 7, 2012 8:08:39 AM

Since Charlie Rangel was re-elected, apparently many voters have no problem with cheating on taxes.

Posted by: Woody | Nov 7, 2012 10:13:44 AM