Wednesday, July 7, 2021
Following up on my previous posts:
Slate: The Charges Against the Trump Organization Are a Master Class in Tax Evasion, by Adam Chodorow (Arizona State):
Everyone knows they didn’t get Al Capone for all the heinous acts he did as a gangster; they got him on tax evasion. Tax issues may well turn out to be the Achilles’ heel for the Trump Organization and some of its top players. Capone failed to report and pay taxes on his illicitly acquired gains. The 45th president’s real estate and licensing company now stands charged with failing to report and pay taxes on a variety of fringe benefits to key employees after an investigation by the New York State attorney general and the Manhattan district attorney. Trump’s lawyers have called the charges petty and contend they are politically motivated. Others view them as designed to put pressure on the organization’s longtime chief financial officer to turn state’s witness. As a tax professor, I see them as a fantastic opportunity to talk about tax policy and the cat-and-mouse games that people play to avoid paying their fair share.
The indictment alleges state—as opposed to federal—crimes, but the underlying basis of the claims is federal income and payroll tax fraud, with a dash of state and local tax fraud thrown in as well. Among other things, prosecutors allege that the Trump Organization funneled approximately $1.76 million in compensation to CFO Allen Weisselberg, with neither the organization nor the organization reporting the payments, thus allowing Weisselberg to avoid about $900,000 in taxes and improperly claim another $130,000 in improper tax refunds. ...
While these charges may seem relatively minor given the larger allegations of tax fraud associated with Trump’s statements to borrowers and tax authorities about the value of his various properties, they amount to serious violations of the basic tax rules, if demonstrated to be true. Tax laws are supposed to apply equally to all. That the Trump Organization and its employees are alleged to have committed graver sins should not take away from what appears to be blatant cheating that undermines the fairness of the tax system.
New York Times, In Case Against Trump’s Company, Echoes of His Father’s Tactics on Taxes