Paul L. Caron
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Sunday, September 26, 2021

Biden Could Owe As Much As $500K In Back Taxes, Congressional Research Service Indicates

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New York Post, Biden Could Owe As Much As $500K in Back Taxes, Government Report Indicates:

Republicans say a new nonpartisan report indicates President Biden improperly avoided paying Medicare taxes before he took office — raising eyebrows and the possibility that he owes the IRS as much as $500,000 in back taxes. ...

A House Ways and Means Committee draft of the bill would end the accounting trick apparently exploited by Biden and boost IRS funding for audits — but the new report, drafted by the Congressional Research Service and provided to The Post, suggests Biden owes taxes under current rules, according to the congressman who requested it.

“Joe Biden wants to raise taxes by $2.1 trillion while claiming the rich need to pay their ‘fair share.’ But in 2017, multimillionaire Joe Biden skirted his payroll taxes — the very taxes that fund Medicare and ObamaCare,” said Rep. Jim Banks (R-Ind.), chairman of the conservative Republican Study Committee. ...

Banks said the report shows Biden improperly used “S corporations” to avoid paying Medicare tax on speaking fees and book sales in 2017 and 2018.

Biden and first lady Jill Biden routed more than $13 million through S corporations and counted less than $800,000 of it as salary eligible for the Medicare tax — exempting the rest from what would have been a 3.8 percent rate, the Wall Street Journal reported.

The CRS report doesn’t name Biden but analyzes cases in which the IRS won a judgment against taxpayers who paid themselves suspiciously low salaries from S corporations and counted most of the revenue as “distributions” exempt from the Medicare tax. ...

Tax law experts told The Post that the CRS report underscores the long-standing controversy, but that it doesn’t necessarily break new ground. They say the IRS simply doesn’t have the resources to make sure that all S corporations reasonably assess what counts as salary. ...

David Gamage, a tax law professor at Indiana University Bloomington, said “the general view among tax experts is that it’s quite easy for taxpayers to get away with this form of tax planning to the point of it being very abusive.”

“This is not the sort of tax planning that should be going on as a matter of tax policy, but it’s very hard for the IRS to police,” Gamage said.

“I would hope that increased attention to this issue, whether that be through focus on a President Biden using this form of tax planning or more generally, would increase the case for reform. I think the case for both increased IRS funding and for substantive law reform this area is overwhelmingly strong,” Gamage said.

https://taxprof.typepad.com/taxprof_blog/2021/09/biden-could-owe-as-much-as-500k-in-back-taxes-congressional-research-service-indicates.html

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