So where was the IRS when this happened? He made the dubious claim, submitted his tax form, and the IRS let it through? Why? How? What happened?Those are such obvious questions. The tax filings were made nearly a quarter of a century ago. The "dubious" position Trump's lawyers took — doing what tax lawyers do, minimizing taxes — was entirely conspicuous. The IRS accepted these tax filings. That seems to resolve the question.
The Times calls attention to the change that was later made in the law to eliminate the provision for the advantage Trump took. That shows there was something in the law that needed to be changed, so this too is evidence that the "dubious method" Trump's lawyers saw in the law was really there.
And so we are back to the issue that Trump has openly embraced: Taxpayers look at the tax law and do what they can to pay as little as is legally possible.
Trump had a lot of money at stake so he paid a lot of money to have lawyers look quite intently at the complicated law and find the path for him. The NYT hints that there's something slimy about using lawyers to handle complex transactions and labyrinthine legal codes: "Clever tax lawyers found a way...." But it has to be said:
On the campaign trail, Mr. Trump boasts of his mastery of tax loopholes and claims no other candidate for the White House has ever known more about the tax code. This background, he argues with evident disgust, gives him special insight into the way wealthy elites buy off politicians and hire high-priced lawyers and accountants to rig the tax system — just as, he claims, they rig elections.Credit to the NYT for putting that paragraph into the article. It's buried, but it's there. It's written to prompt readers to think Trump is disgusting and he knows it, but the intelligent, skeptical reader may say: It's the law that is disgusting, and it takes an unusual person to operate in that disgusting place.
What sort of person would you be if you operated within the disgusting place that is the tax law and came out as successful as Donald Trump? Maybe you'd be such a monster everyone would think you're completely barred from switching over to the government side.
But are those who've operated from within the disgusting government side any less monstrous? Oh, but they are the monsters we're accustomed to seeing inside the government.
We know we are choosing a monster this time.
Posts
113 comments:
What Trump did was legal at the time. On the other hand, Hillary's private email server and her handling of classified of material was always illegal.
I would say the NYT's shilling for Hillary was shameless but it has no shame.
"Tax experts who reviewed the newly obtained documents for The New York Times said..."
Who got these newly obtained documents? Who supplied them? Was it Putin? Does the New York Times think it's just great to not only obtain private documents but show them to "tax experts" and ask for opinions on them?
What a crock!
That whole NYT essay, from headline to down-column-inches paragraphs, is a steaming pile. I don't like Trump, but c'mon, children, learn a little journalism.
Whenever I suggest that the IRS be dissolved, everyones eyes glaze over.
They'd rather bitch about people with lawyers minimizing their taxes, then fundamentally change the country.
Income tax has failed to fund the country. We have 100's of trillions in unfunded liabilities, and 21 trillion in debt. Is this the signs of success?
What to do? Yes, get rid of the agency (well, 90% of it), and move the country to a consumption tax. Pay as you go. If the revenue comes short, increase the consumption tax. If people quit consuming, lower the tax.
Waiting for the NYT to dig into Warren Buffet's tax avoidance thru loop-holes.
The only reason the article exists is because the candidate is Republican. Can you imagine this happening to a Democrat? Trump is guilty of SWR (Speaking While Republican), and this piece is just a reminder to us all that he has no business doing what he’s doing and must be punished, for the sake of all decent Democrats everywhere. There is so much of that going around....
If the candidate were Democrat, there would be no scolding and no “scandal.” Those very ideas would be absurd.
I believe the country is currently spending $1 to recover every penny in taxes.
If the IRS law was thrown out, about 50 million lawyers and another 50 million accountants will have to go find a real job.
When is someone gonna ask Hillary if getting that debate question from Donna Brazile is part of what Trump means by "rigged".
Famous Monsters of Flim-Flamland
What would be really impressive is for the NYT to assign a gang of reporters to examine how many Hillary staff have taken the fifth under oath, ask whether any of these untrustworthy people will continue to be employed by her, examine the lax supervision of ALL employees in the Obama years (was anyone ever fired for the IRS breaches and harassment, the gunwalking, the bad data security, the Obamacare rollout, the way Hillary disobeyed every rule Obama laid down (like a red line) in his admin? Any of it?); or it would be admirable to just see a little curiosity from the press about Hillary negotiating those secret side deals with Iran, how she came to believe assassinating Khaddafi was a good idea or what exactly changed in the TPP between her publishing her phony memoir when she launched her campaign praising it as the "gold standard of trade dxeals" and now when she holds a somewhat opposite position.
Have they ever assigned any reported to look at these important issues in the campaign?
It took five reporters to render this tripe?
"Mr. Trump, for example, owned all three of his Atlantic City casinos through partnerships, an arrangement that allowed casino profits to flow directly to his personal tax returns when times were good."
Uh, Mr. Tax Reporter, that's not a good way to flow on income. You may not have heard the news that personal income taxes are high.
Chelsea Clinton hired some experts to look into the Clinton Foundation and she didn't much like what they found. The Times could follow up on that.
I'm joking, of course.
Reason #1,267 to love the Althouse blog. A tidily brilliant takedown of the Times. I thank Althouse for reading the Times, so I don't have to.
But... (there's always a "but"...)
Isn't it a tragedy, that it takes Ann Althouse -- a skeptical, reluctant supporter (if she is a supporter) of Trump to put an articulate, intelligent spin on defending Mr. Trump? Because it seems no one in Trumpland -- least of all Donald J. Trump -- can do it for him.
Trump -- the supposed natural tv star and media wizard -- can't seem to communicate effectively above from a nightclub/barroom level. He complains about the media, when he is supposed to be someone uniquely knowledgeable about mass communication.
I'm sure that Trump - one solitary citizen - has paid thousands of times more tax than the average American tax payer. Isn't it a little hypocritical to be bitching about him not paying enough when he's actually paying part of your share for you? What would you think about a club where a few members are forced to pay the dues for most of the other members and everybody gets the same vote on club decisions?
You mean Trump used to his advantage tax laws written by Democrats?
With the exception of 4 years in the late 1940s, Democrats controlled the House, including the its important Ways & Means Committee (the tax law writing body), from 1932 to 1994. Like Clinton's own problems, Democrats created the issue.
If you have a business, being familiar with every line in the tax laws affecting you and taking advantage of everything you can find in your favor makes the difference between a tidy profit and just breaking even or taking a loss and going out of business. And it is the laws as written that counts; you are not required to have second sight and divine what might have been the writer's intent.
I take the standard deduction loophole.
I believe the jornolist thought for the day is taxes.
The question about Trumps communication comes down to its purpose. Who is he talking to?
Not us here for the most part. There aren't a lot of actual voters that would read beyond the headline, should they even see it, much less the rebuttal.
This is the myopia of the intellectual cogniscenti. We have our hobby, but it's not everyone's hobby.
Taxes paid are essentially an expense that delivers almost nothing in return, so to pay more than you have to is irresponsible and an incompetent management of the resources that support your stockholders, employees and their families, not to mention your own. It's equivalent to letting someone rob you or start fires in the building. An employee or outside accountant who allows it should be fired, and if possible, sued. Do you want to have your paycheck reduced so that your boss can pay more taxes? I'm sure the fine people in Washington will make better use of your money than you could. I hear they may use it to figure out how to reduce your health insurance premium by $2500/year.
coupe said:
"If the IRS law was thrown out, about 50 million lawyers and another 50 million accountants will have to go find a real job."
ahhh.......theres the rub
The IRS accepted these actions as legal. If there was the slightest doubt, Trump would've been slammed by the IRS for back taxes and penalties. Who among us does not take advantage of every possible "loophole" when preparing our taxes?
So, at the Times it's Donald ducks his taxes and might as well have Creamer for the byline. There's a surprise.
OH I forgot the other jornolist thought for the day. Russia, since Harry Reid disclosed a classified briefing supposedly. How a political party can have that piece of crap as leader is beyond me.
Can someone ask these fine members of the Lickspittle Media what exactly is wrong with paying the taxes you are legally required to pay and no more?
So where was the IRS
Apparently illegally leaking his tax return information to the NYT.
Alarmed by the obvious potential for abuse, Congress and the I.R.S. made repeated efforts during the 1980s to curb this brand of tax wizardry before banning its use by corporations altogether in 1993.
This seems even more on point than the section Althouse highlighted. If they had identified it as a "loophole" in the 80s it clearly existed to use.
John Shelton Reed in his book Whistling Dixie told of the two approaches to income taxes:
One approach regards it as a murky swamp. One can wander pretty far out and still keep their nose above water. Don't fall into a hole hidden by the murk, though.
The other, what he called the HR Block approach, is to regard it as a cliff and stay well back from the edge. In other words, a very cautious approach.
Trump, like most successful people, takes the first approach. If a deduction or advantage can be justified, no matter how tenuously, take it. If the IRS complains, argue about it. If they really complain, offer to settle. If that doesn't work, pay up and pay the penalty. Nothing wrong, morally, with having to pay on a disallowed penalty. It is not like it was fraud or criminal.
The big problem with the tax code is that nobody including the IRS understands it. That's why the differences of opinion on what is legit and what is not.
John Henry
Call it out-of-this-world instead of dubious and hedge on whether it's praiseworthy or dubious.
I love this:
The language used in tax opinion letters has a specialized meaning understood by all tax professionals. So, for example, when a tax lawyer writes that a shelter is “more likely than not” going to be approved by the I.R.S., this means there is at least a 51 percent chance the shelter will withstand scrutiny.
What kind of idiots work for the NYT?
Next week they'll tell us the highly technical phrase "against the law" means "illegal".
This sort of non-story story happens regularly with the NYT, and other big newspapers. The dead giveaway is the number of reports in the byline. They researched the bejesus out of it, tying up limited NYT resources, and really had nothing to show for it. But they have to run it anyway. Remember the silly story about McCain and the lobbyist back in '08? Similar thing.
Who among us does not take advantage of every possible "loophole" when preparing our taxes?
I've taken a basis for an old capital gain as zero because it's too much work to figure out.
Your time is worth something too.
Those NYTimes reporters have evidently never filed anything but a straight forward 1040EZ and obviously never dealt with the rapacious IRS because I guarantee you, the IRS did not let TRUMP and his tax lawyers get away with anything. The IRS squeezes every dime they can out of the taxpayer. And sometimes comes back for more, with interest, years after the tax return was filed.
Althouse asks: What sort of person would you be if you operated within the disgusting place that is the tax law and came out as successful as Donald Trump?
Better question: how big a monster must Hillary! be to operate in the disgusting place that is the DNC, the Clinton administration, the Clinton Foundation, and the Obama State Department and come out as successful and rich as she has?
"Legally Dubious". Is that like smoking Colorado purchased marijuana in Alabama?
Meanwhile, Clinton Lobby crime world - the stench.
According to a financial disclosure statement prepared by Mr. Trump’s accountants, he was under audit by the tax authorities as of 1993, only a year after he avoided reporting hundreds of millions of dollars in taxable income because of this legally suspect tactic. But the results of that audit are unknown, and the agency declined to comment on Monday.
It's interesting the NYT appeals to ignorance here. They're revealing confidential information on one return but not the others? Why? If their source was holding back why not pressure them for the additional returns? Unless you see yourself as a partner instead of a journalist.
But Trump was audited the first year the NOL applied which means the IRS audited and accepted the NOL. [If not the entire accusation he didn't pay taxes is wrong]. But the NYT intentionally stopped short of reporting it, acting as if it's unknowable.
Blogger AprilApple said...
Waiting for the NYT to dig into Warren Buffet's tax avoidance thru loop-holes.
Never happen.
The biggest loophole Buffet has though, if it does happen, is that he has relatively little income. As I understand it, he has about $40-50mm in annual income. It used to be a lot less 10-20 years ago, down around $1mm or so.
Most of Buffet's $60-70bn wealth is in Berkshire Hathaway stock. It pays no dividends, thus he has no income from it.
He gets something like $100-150m in salary plus benefits and a big bonus. He does have other investments outside of B-H where the other monies come from.
If he paid at a 40% rate on $50mm, he will pay about $20mm in income taxes. $20mm on his wealth (untaxed in the US) is about 0.03%
Jeff Bezos is worth even more than Buffett and pays even less. Bezos has income of $3-4mm and wealth of $70bn or so. Pretty much all from Amazon salary which is low for a CEO at a company Amazon's size. Amazon pays no dividends. Doesn't even make a profit most years.
It why whenever you hear a politician, like Crooked Hilary but Repos too, talk about taxing the wealthy you should assume they are either dumb as dogshit or lying. Or both.
John Henry
As a practical matter, the approach Trump, Buffet, Google, Microsoft or any other large taxpayer, individual or corporate, would take would be to take the maximum legally defensible deductions allowed, and then negotiate final tax liability with the IRS. But this offends the tender sensibilities of the NYT (which, as a corporation, does the same thing).
If, at the 11th hour, this is all the NYT has on Trump, I'm starting to suspect that, after a dozen "Hail Marys" & "Our Fathers" as penance, Trump may well be a candidate for canonization.
Timothy Geithner could not be reached for comment....
Blogger Bob Boyd said...
Chelsea Clinton hired some experts to look into the Clinton Foundation and she didn't much like what they found. The Times could follow up on that.
Perhaps it was not as widely reported why she didn't like what she found. She thought staffers were stealing money from her mom and dad.
Can't have employees skimming. They wind up in a hole in the desert when that happens. Only the owners of the foundation get to steal.
John Henry
As I recall, this whole leftist conceit of "It's stealing if you don't pay as much tax as possible", which they apply to not only Donald Trump but any corporation (you should read the shrieking leftists do about companies like Apple and Google, who take advantage of international law to try to shield billions from rapacious taxes), is explicitly against Supreme Court law.
The Supreme Court has officially stated it is not illegal or immoral to try to pay as little income tax as possible. Personally, I think we should pass a law at 100% income tax, with an unlimited deduction for charitable donations to recognized Christian charities, child expenses, etc.
In other words, only conservatives get to escape taxes. Liberals can pay and pay and pay, since they love themselves high taxes.
Or is that they love high taxes.... on someone else? Not them, of course: they are too important to pay taxes. Just ask John Kerry, right?
--Vance
When you accept donations from Saudi Arabia and Qatar through an charity organization operating as a front to enrich yourself and your friends, is that legally dubious or just plain illegal?
When you sell access to the United States State Department through the charity/slush fund is that legally dubious, or just plain illegal.
Seems Trump took a tax deduction that was legal, and accepted by the IRS. So what?
While the NYT rummages through 25 year old tax returns:
"John Podesta's Best Friend At The DOJ Will Be In Charge Of The DOJ's Probe Into Huma Abedin Emails"
http://www.zerohedge.com/news/2016-10-31/doj-tells-congress-it-will-work-expeditiously-review-abedin-emails-there-just-one-pr
The NYT starts with the answers (Trump is evil!) and then works to find evidence to support the conclusion. Nonetheless, possibly questionable (but apparently successful) tax-avoidance strategies from a quarter-century ago come across as pretty weak sauce.
Especially as it all but invites speculation as to what everyone from big Wall St firms to potentially hostile foreign leaders bought with their "contributions" to the Clinton Foundation.
The New York Times all but declared war on a Trump candidacy back in April; what is unfortunate is that this debased journalism still provides cover for much of the rest of our national media to follow, as the NYT brand apparently retains enough prestige in newsrooms to provide cover for those who run similar stories elsewhere.
Two monster? Nope. Only one.
Trump is a good guy.
The stench of swamp news Media spinning non-news is revolting.
They accused trump of not paying a Tax he did not owe because he used a legal deduction.
Tomorrow they will accuse him of having his epidermis show.
And The Russian Computers ordered him to do it.
I take the NYT's desperate, stammering flailings as a good sign.
"What sort of person would you be if you operated within the disgusting place that is the tax law and came out as successful as Donald Trump? Maybe you'd be such a monster everyone would think you're completely barred from switching over to the government side."
Sounds like when companies (or the government) hire hackers to find and fix security problems in computer systems.
Bagoh20 said: Taxes paid are essentially an expense that delivers almost nothing in return, so to pay more than you have to is irresponsible and an incompetent management of the resources that support your stockholders, employees and their families, not to mention your own. It's equivalent to letting someone rob you or start fires in the building
This cannot be stressed enough. Only a gigantic fool would pay more taxes when the legal system allows you to use the laws and methods to reduce (not avoid but reduce) your tax burden. Trump is many things but not a gigantic fool.
Legally using the laws provided is a smart thing.
Trump used "legally dubious methods to avoid taxes" = guilty.
Clinton uses illegal email server to avoid sunshine laws = not really guilty.
If not for double tandards, they'd have no standards at all.
Who got these newly obtained documents? Who supplied them? Was it Putin? Does the New York Times think it's just great to not only obtain private documents but show them to "tax experts" and ask for opinions on them?
Will somebody ever ask a reporter "When leaked info harms a Democrat, the leak is always the story, but when it harms a Republican, the info is always the story. Why?"
It's interesting the NYT appeals to ignorance here. They're revealing confidential information on one return but not the others? Why? If their source was holding back why not pressure them for the additional returns? Unless you see yourself as a partner instead of a journalist.
Did they lambaste Comey for his letter on Friday? Because that'd be some good irony right there.
As I recall, this whole leftist conceit of "It's stealing if you don't pay as much tax as possible", which they apply to not only Donald Trump but any corporation (you should read the shrieking leftists do about companies like Apple and Google, who take advantage of international law to try to shield billions from rapacious taxes), is explicitly against Supreme Court law.
Ironically, they are less upset when a Democrat who writes the tax law ignores them wholesale, as Rangel did for years.
This cannot be stressed enough. Only a gigantic fool would pay more taxes when the legal system allows you to use the laws and methods to reduce (not avoid but reduce) your tax burden. Trump is many things but not a gigantic fool.
Even better: IF Trump paid more than he had to tax in taxes, the Progs would use that as proof that he is really stupid with money.
Anybody doubt that they would?
gspencer said...
You mean Trump used to his advantage tax laws written by Democrats?
Yes, the bastard! It's like that tiny handful of millionaires back in the 1960s who used the loopholes in the existing tax code to avoid having to pay any income taxes. What an outrage! As a result, Congress passed the Alternative Minimum Tax (AMT) on "the rich." Of course, being morons, they didn't index the AMT for inflation so now millions of families are being hit by a tax aimed at "the rich."
No one is required to pay more than his or her legal obligation on taxes. You can freely choose to donate more money to the government if you wish. Funny how those rich liberals who are for higher taxes don't take advantage of that option, isn't it?
You know I bet the employer of the five nitwit reporters (but I repeat myself) at the New York Times hires clever tax lawyers as well. If they didn't the owners of the Times should be sued for business malpractice. Render unto Caesar what is rightfully Caesar's and not one red cent more!
Why, if only rich people like Trump paid more federal taxes, then . . .
What, exactly?
In 2014 General Electric made almost $6 billion in profits and paid just over $50 million in federal corporate income tax. In case you are math-challenged that's a tax rate of just under than 1%. In 2010 they did even better -- on profits of $4.25 billion they received a tax rebate of another $3.25 billion. Must be nice when your CEO (Jeff Imelt) is a friend of the Obamas.
Yup, big businesses take advantage of tax loopholes, and Trump as much as Democrat-favored GE or any other company. In some instances they donate millions to a political party (surprisingly often the Democrats, notwithstanding the conventional wisdom that the Republicans are the party of big business) and get billions in loopholes written into the tax law.
Flat tax anyone?
This is the nefarious scheme, as I understand it. Three of his casinos were operated as partnerships (I would guess limited partnerships, but that isn't discussed, and was, apparently, beyond the range of the reporters). Profits flow through a partnership, like they don't flow through a Sub-C corporation (Sub-S corps are taxed like partnerships) (in a Sub-C corp, you have double taxation, 35% or so federal corporate tax plus applicable state taxes (roughly 5% in CO), and then personal federal and state income taxes on the remainder that gets distributed as dividends). The key there is that you organized back then as (probably limited) partnership back then precisely to avoid double taxation. (Now you also have LLPs, LLCs, etc, which are also taxed as partnerships).
Profits and losses flow through to the partners of a partnership without having to pay federal and state corporate income taxes. Losses are usually fine too, since they can be applied against other income, reducing your net income subject to tax. But, there is another catch here, and that was that much of the funding for the project was through junk bonds. They were essentially using Other People's Money to fund the projects. Which is typical of a lot of big real estate deals. It is something called "leverage". If you are paying 5% on the borrowed money, and earning 12%, you are making an additional 7% on all that borrowed money. Something that Trump, and most other real estate developers do on a routine basis. But, and here is the catch, if you default on a loan, the IRS treats the defaulted or forgiven portion of the loan as income. In many cases, it isn't really income, but they have to asses the defaulted or forgiven portion of the debt as income, since they are allowing the borrowers to treat their side of the deal as a loss against their income. So, it is very possible to find yourself in a position where you owed money for a defaulted or forgiven loan, and you really didn't benefit from the principal. For example, a lot of people saw this with the real estate crash, where they found themselves underwater in their mortgage loans, and when they walked away, the difference between what the lender could sell the property for, and the remainder of the loan, was treated by the IRS as income to the (former) borrower, even if they never saw a dime of the money.
So, with the casinos going south, Trump and his partners were potentially facing hundreds of millions in taxable income, that they probably never saw, as a result of defaulting on the junk bonds financing their projects. They found a way around the problem by having the junk bond holders buy portions of the partnership, instead of just defaulting. This turned the transaction into a purchase of equity in the partnership, instead of a default on loans. I should note that you see similar maneuvers in most big bankruptcies, such as the recent GM and Chrysler bankruptcies, where debt is exchanged for equity.
As a note, you can maybe see why there has been a growth in LLPs and LLCs since Trump was involved in those casinos, and the tax laws were tightened to make it more difficult. The LL means "limited liability", which means that the partners or shareholders are not typically personally liable on the loans that the LLPs or LLCs take on, and so often aren't assessed the defaulted or forgiven debt as income.
Donna Brazil's casual cheating is a tell that she thinks nothing of violating ethics to give an edge to her side. There are other tells that indicate a person is ethically compromised. One is when a person makes the assumption that "everyone does it." Thieves are known to greatly overestimate the amount of theft that goes on, and the psychological reasons for doing so are clear enough. When Trump sees corruption everywhere, it suggests he is engaged in self-justification himself. The "everything is rigged" charge is another way of saying he would have rigged things himself if given the chance.
Trump's legal tax avoidance is not particularly serious (although neither is it evidence of genius of anyone besides Trump's accountant), but it does fit a larger pattern of pushing things over the edge and seeing if anyone pushes back or notices. After all, in the year Trump took this exemption, he was personally 2% of the entire nation's use of that rule. If you were outraged by Donna Brazil's passing of a debate question - a person who is not in an elected position, but have not looked into Trump's non-payment of small contractors on the flimsiest of excuses or clear evidence of his falsifications of building permits over his career, you shouldn't really claim neutrality.
"Does the New York Times think it's just great to not only obtain private documents but show them to "tax experts" and ask for opinions on them?"
-- Does whatever ethics/board or whatever committee for tax experts/lawyers allow them to look at documents like this and offer an opinion? This sounds like trying to get a doctor to give you a diagnosis with partial information. Responsible doctors may try and do that, but they'd provide loads of caveats.
"Trump's legal tax avoidance is not particularly serious (although neither is it evidence of genius of anyone besides Trump's accountant), but it does fit a larger pattern of pushing things over the edge and seeing if anyone pushes back or notices."
He was not pushing to any edge in this case. He identified a legal method to reduce his takes, filed his return on that basis for the IRS to see and the IRS accepted the return. He had no moral or legal obligation to do anything else. Braziile violated known ethical duties to her employer and the public. News people are not supposed to tip off candidates on questions in advance in presidential debates. She used her well paid position at CNN for political advantage.
If Trump routinely refuses to pay for services rendered and negotiates down a debt incurred in performance of a contract according to its terms, he is culpable. But he claims that the cases involved less than adequate performance. There's really no way to tell who is right on this from the evidence available. It could be an unsavory pattern. Or it could be a political hit job. You act as if you know the answer. But you don't.
The NYT is simultaneously angry at Trump for following the tax code laws, and angry at the FBI for investigating Hillary for NOT following the secrecy and document retention laws.
Leftists, if you don't like the law, go about changing it. Don't bitch about people following the law, nor about holding someone to account when they break the law.
"But, and here is the catch, if you default on a loan, the IRS treats the defaulted or forgiven portion of the loan as income."
There is a big difference between a defaulted and a forgiven loan. Default in itself does not trigger indebtedness. Forgiveness of the debt does.
I have talked to accountants about corporate taxes before. One of them was very proud of a "dubious" loophole that he exploited. His opinion was that he was not sure if the tax law in question applied to the his company but he was really not sure that the law did not apply, so they took the tax break and sent the IRS a long document explaining why they thought they were qualified. The IRS accepted it. It is quite possible that the IRS did not know if the law applied or not. Lots of tax laws are not well defined.
Honestly, Trump does some shady stuff but following the tax law, no matter how dubious said tax law is, does not remotely qualify.
There is the smell of Democrat desperation in the air.
Bob Ellison said...11/1/16, 8:33 AM
Who got these newly obtained documents? Who supplied them?
They seem to be only papers included with casino bankruptcy filings, evidently mainly formal tax opinion letters, never carefully looked at before by newspaper or magazine writers, and bond offering disclosure statements.
The only thing else may have been the previously receieved and reported cpies of the first pages if Donald Trump's 1995 New York State, New Jersey and Connecticut state income tax returns.
Now maybe somebody tipped them off to it.
Well it does explain how the national debt got so big. Let someone lose a lot of money and two people get to write off the loss, the ones who actually lost and the one who pretended to lose. You realize that the creditors who took worthless equity in exchange for trump's worthless debt also got a write-off.
Analysis of the news like this turned me from someone who accepted global warming as the probable truth to a full blown skeptic. Althouse is a New York Times denier!
That's why when Hillary sells inside information, it's for cold cash!
Top of today's list of Things I Wish I Could Claim Credit For Writing:
damikesc said...
Trump used "legally dubious methods to avoid taxes" = guilty.
Clinton uses illegal email server to avoid sunshine laws = not really guilty.
If not for double tandards, they'd have no standards at all.
The Times calls attention to the change that was later made in the law to eliminate the provision for the advantage Trump took. That shows there was something in the law that needed to be changed
Maybe. But it is not necessarily true that the government changing a law is evidence that the law needed to be changed.
David said...11/1/16, 10:42 AM
There is a big difference between a defaulted and a forgiven loan. Default in itself does not trigger indebtedness. Forgiveness of the debt does.
Donald Trump needed tghe loan to be officially forgiven in order to maintain his casino licenses.
If a loan is forgiven because of insolvency, I think generally it is not taxable income. But this was a bit different.
The tax manuever that Donald trump used was a debt for equity swap. If the stock was valued at the same amount as the loan, and who is to say what stock is "worth" there would be no income form a forgiven loan, although I still see Donald Trump deducting a pre-dilution loss (the loss is separate form the loan) and never accounting for the subsequent dilution
I think the law of 1993 restored the ability to use net operating loss to offset all future income, from whatever soirce derived, even unrelated businesses (provided the loss was to someone in the real estate business) and removed the avoidance of the recapture of forgievn loans by corporations. But Donald Trump's casinos were structured as a partnership between himself and a specially created corporation, which allowed income and losses to be passed through to himself personally. The debt for equity swap manuever was repealed for partnerships also in 2004 - Hillary Clinton did indeed help get rid of a tax loophole he used - but it was not retroactive.
The New YorK Times labels the tax avoidance method dubious because the tax opinion letter said there was “substantial authority" for him to do it, and that generally translates into a statement that the I.R.S. can be expected to rule against the taxpayer roughly two-thirds of the time.
“substantial authority' for it = 33.3% chance the IRS will accept it.
"More likely than not" to accept it = 51%.
"should = 75%
"will" = All but certain.
Those are not real percentages probably.
The law that was changed probably went further than the doubtful questions.
readering said... 11/1/16, 10:50 AM
Let someone lose a lot of money and two people get to write off the loss, the ones who actually lost and the one who pretended to lose. You realize that the creditors who took worthless equity in exchange for trump's worthless debt also got a write-off.
Well, that's only speculation that they deducted it.
Maybe the stock was valued at X by Trump and at Y by the bank. Probably the equity was only written off in a different year.
I've been sayng theer wasa doule deduction for some time. I thought this was black letter lawm but evidently Trump needed to do something special to avoid having the forgiven debt added back to his income. But I think even switching it for equity, isn't heer a problem with dilution? It's not new money that's being invested. Or does he actually "pay back" the loan, and then get an equal amount invested as equity? Still, somebdy else's investment is paying back the loan, and his losses are being replenished by new investment.
Michael The Magnificent said... 11/1/16, 10:40 AM
The NYT is simultaneously angry at Trump for following the tax code laws, and angry at the FBI for investigating Hillary for NOT following the secrecy and document retention laws.
And NOT angry at the FBI for investtigating Trump's campaign for ties to Russia, even though that could affect an election. Some of the leads they were givenwere outright false, but it gave them a right to rummage around in records.
I think you're not summarizing quite accurately--as I read it, Trump's tax lawyers thought on most issues that the odds were that IRS would not buy the accounting. If they thought the odds were favorable, at least 51 percent, their letter could be used to prove that Trump filed the return in good faith. Apparently Trump went ahead without the legal cover and got away with it.
Writ Small said...11/1/16, 10:22 AM
After all, in the year Trump took this exemption, he was personally 2% of the entire nation's use of that rule.
No, 2% of the net operating losa.
The issue discussed today is how Trump avoided adding back the amount of forgiven loans to his income.
Bob Ellison said...11/1/16, 8:52 AM
"Mr. Trump, for example, owned all three of his Atlantic City casinos through partnerships, an arrangement that allowed casino profits to flow directly to his personal tax returns when times were good."
Uh, Mr. Tax Reporter, that's not a good way to flow on income. You may not have heard the news that personal income taxes are high.
It avoids double taxation.
Besides which, for Trump it was good, since he never had any income for years.
Michael McClain said... 11/1/16, 9:09 AM
The IRS accepted these actions as legal. If there was the slightest doubt, Trump would've been slammed by the IRS for back taxes and penalties.
Not penalties, as having a formal tax opinion letter from someone recognized by the IRS as a tax law expert invariably avoids that. The letter writers have their own reputation to uphold, though, and could even be disqualified from giving tax advice or worse.
They probably exaggerate the probability of it being accepted. People want at least a MLTN statement in a letter (More Likely Than Not)
I think it could still qualify as good faith, as the words they used to describe a 1/3 probability, were "substantial authority"
The lawyers gave him a backup plan, in which he could at least spread the tax payments over years,,
What I was taught in tax class in law school was that when you file your tax forms, it's an offer and you see if the IRS accepts it.
Writ Small wrote -
"...have not looked into Trump's non-payment of small contractors on the flimsiest of excuses or clear evidence of his falsifications of building permits over his career..."
Writ Small,
These sound tailor made to trot out a gaggle of these contractors and/or building permits and "swift boat" Trump with them. And yet instead of picking this low hanging fruit, the NYT accuses Trump of essentially staying within the tax law a quarter century ago. Why is that?
Aren't you asking for readers to draw the conclusion you (might) have made? Scary how high a premium plausible deniability costs these days. Compared to Obamacare, the deductibles are off the charts.
Maybe Ann can post on the legal issues surrounding the Weiner email probe: https://goo.gl/bJj2DX
The presidency may mellow Trump. It will not make an honest woman of Hillary.
Of course, being morons, they didn't index the AMT for inflation so now millions of families are being hit by a tax aimed at "the rich."
Oh, they knew exactly what they were doing. Don't kid yourself.
My only problem with Hillary is that I can't really afford to give enough to the Clinton Foundation, should I get into some kind of trouble.
Blogger Luke Lea said...
"Maybe Ann can post on the legal issues surrounding the Weiner email probe: https://goo.gl/bJj2DX"
The legal issues don't matter much. One of Podesta's pecker-touching buddies from DOJ, Peter Kadzik, is now in charge of the investigation.
Although the idea that Weiner put the emails on his computer without Huma's knowledge raises lots of interesting factual and legal possibilities.
@Sammy - thanks for the clarification between treatment of forgiven and defaulted upon debt.
Martha said... [hush][hide comment]
Those NYTimes reporters have evidently never filed anything but a straight forward 1040EZ ......
I disagree. I expect those reporters write off everything from pencils to iPads as job expenses. Every dinner and trip written off. Cell phones and office space written off. Vehicles and any transportation costs written off.
Any one who complains of loopholes should file short form and refuse to take mortgage interest deductions, as a way to "protest"
If even one classified email is found on that PC, does that now mean that Yahoo is on the hook for handling classified information that as a company they are not authorized to do? Would said classified information even now still be on Yahoo servers and/or backup tapes somewhere?
Refering to Huma and Mr. Dick-Pick...
Picking a monster?
I think Obama is a monster and incompetent.
I don't think that Weiner put the emails on the computer with no permission from his wife. Rather, I suspect that they jointly configured the email program on the computer so that she could access her email account(s) using it, but never/rarely did. Probably forgot about it, esp after their separation. I suspect that the problem arose by defaulting to using POP3 instead of IMAP to access her email account(s), and using default email settings. POP3 is effectively write-only, which means that that her emails would probably have been fairly routinely downloaded, and wouldn't have been deleted on this laptop, even if deleted in the underlying account(s), as would have been the case with IMAP.
I moved all my email programs to IMAP from POP3 recently after finding it impossible to keep my email accounts synchronized otherwise. It wasn't bad when I had a computer running IMAP and an iPhone mirroring it with POP3. But now I have an iPhone, 3 iPads, 2-3 laptops, and at least one desktop computer. At least 7 devices. It wasn't painless either - I typically had to guarantee that there were no important emails in the POP3 Inbox or Sent folders, delete the account, then recreate as IMAP. Life is much easier now. I should add that I never had the Weiner family problem of accidentally (probably) mirroring, on a write only basis, everything sent to my email accounts by carefully configuring my email settings on my various devices, immediately turning off automatic downloads of any type by POP3 accounts. Started doing this after starting an email program at some point, and it attempting to immediately download several thousand emails. When it happened in Thunderbird, I had to kill it, disconnect from the Internet (so it couldn't download the email when I restarted it), restarted it, and reconfigured.
So 25 years ago Trump legally filed his taxes using legal methods to reduce his tax obligations legally in a way that that the IRS accepted and found legal.
Wow! SEND HIM TO JAIL NOW! Can't have presidential candidates who obey the law. We need to have one who proudly evade FOIA laws. Who proudly violate national security laws by sending classified information through non-secure means. Who unlawfully attempt to evade subpoenas by deleting those emails en masse. Who cheat in debates by getting debate questions in advance from their willing co-conspirators in the press. I mean, where will we be as a nation if presidential candidates are expected to obey laws like ordinary people?
readering said...
Well it does explain how the national debt got so big. Let someone lose a lot of money and two people get to write off the loss, the ones who actually lost and the one who pretended to lose. You realize that the creditors who took worthless equity in exchange for trump's worthless debt also got a write-off.
Trumps losses have absolutely no effect on the national debt. However preferring the UAW over the General Motors bond holders has an enormous effect on the National debt.
This background, he argues with evident disgust, gives him special insight into the way wealthy elites buy off politicians and hire high-priced lawyers and accountants to rig the tax system
And guess which party continually argues against simplified a tax code.
the wolf said... [hush][hide comment]
This background, he argues with evident disgust, gives him special insight into the way wealthy elites buy off politicians and hire high-priced lawyers and accountants to rig the tax system
And guess which party continually argues against simplified a tax code.
11/1/16, 1:44 PM
Would that just happen to be the same one that fights against voter ID laws and voter integrity efforts?
Am I the only remember this nugget, "the Clintons had gone so far as to deduct $2 for underwear donated to charities."
$2 for soiled, dirty underwear. Which one speaks to one's character $920Million property loss or claiming $2 for donating soiled dirty underwear.
Some right-wing nut job publication
The big problem with the tax code is that nobody including the IRS understands it.
When I was running my own small business decades ago, my [CPA] Accountant told me that there are several conventions every year for CPAs, the high end software companies and the IRS. At these, the IRS would inevitably give instructions on how to deal with matters where the tax law was ambiguous or self-contradictory. So as long as everyone put item X on line Y, they wouldn't be audited [just for that.]
The list of these types of things was long. Anyone with complex taxes who doesn't use, and listen to, a CPA is nuts.
The NYT is a monstrous affair.
Trump was once caught going 70 mph.
Of course it was legal because the speed limit was 75 mph.
But in some places, it's speeding.
So Trump is guilty or something.
This election takes the cake, The Clintons accuse Trump of lying, womanizing and being devious.
Mad Boston Arab said... [hush][hide comment]
Am I the only remember this nugget, "the Clintons had gone so far as to deduct $2 for underwear donated to charities."
$2 for soiled, dirty underwear. Which one speaks to one's character $920Million property loss or claiming $2 for donating soiled dirty underwear.
No longer underwear. Currently "collectors items".
It blows my mind that no one has mentioned the implications behind Weiner labelling this cache of e-mails as "Life Insurance". Who's life was he insuring? Was this his protection against a potential onset of vincefosteritis? I wonder what he would be willing to spill on the Clinton Crime Family (Does this election pit the Donald against La Donna?)if he were promised an all-expenses-paid vacay to Los Isla de las Pervos. He'd probably want to be sure WJC wasn't holidaying there at the same time. Could end up a real cock-fight. Literally
Has anyone seen the NY Times tax return?
Well, we don't knopw further context of this "life insurance" and do you even know if it is true? Can you tell me more?
The Clintons also deducted the cost of maining and manageing the private server.
It was treated as a business expense of their speechmaking business.
I have not tried to do my own taxes since the first time I consulted an accountant when I was a resident.
We were going to owe more than with holding and, in desperation, we went to a guy in west LA who did a lot of other residents taxes.
His name was Ephraim Sales on Robertson Blvd. If he was still alive, I would go to him now.
I still remember his name. We paid nothing and got all our withholding back and I never did my own taxes again.
There simply are not enough tax records available to speculate on the Trump Tax situation.
Go-home gadfly, you're drunk.
well chaim saban, the head of univision, had to pay a 250 million dollar fine for phony tax shelters, the times had nearly that level of loss two years ago,
This notion that you should pay more taxes than legally required has me slack-jawed. Who does that? N.O.B.O.D.Y. And, yes, taxes are complicated and sometimes ambiguous. Whose fault is that? Are the Dems advocating tax changes that would sweep all this crap aside? No, they want even more of it.
Avoidance of taxes is legal, and in most people's minds, moral and ethical.
It is evasion of taxes that gets one in trouble.
Like if one uses a charity to hide bribes.
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