One example
of how the Trump tax fraud scheme worked
The Trump
siblings put the value of the Park Briar complex (photo above) in Queens at
over $17 million before their brother Fred Trump Jr. died in 1981.
But as the
executors of his estate, Donald J. Trump and his father, Fred Trump claimed on
a tax return that it was worth only $2.9 million. [Photo by Dave Sanders for The New
York Times]
Shocking lead-in
sentence: President
Trump participated in dubious tax schemes during the 1990’s, including
instances of outright fraud, that greatly increased the fortune he received
from his parents, an
investigation here from The New York Times.
(My note:
Highlights below more or less).
Mr. Trump
won the presidency proclaiming himself a self-made billionaire, and he has long
insisted that his father, the legendary New York City builder Fred C. Trump,
provided almost no financial help.
But The Times’s investigation, based on a vast trove
of confidential tax returns and financial records, reveals that Mr. Trump
received the equivalent today of at least $413 million from his father’s real
estate empire, starting when he was a toddler and continuing to this day.
Much of this money came to Mr. Trump because he helped
his parents dodge taxes. He and his siblings set up a sham corporation to
disguise millions of dollars in gifts from their parents, records and
interviews show.
Records indicate that Mr. Trump helped his father take
improper tax deductions worth millions more. He also helped formulate a
strategy to undervalue his parents’ real estate holdings by hundreds of
millions of dollars on tax returns, sharply reducing the tax bill when those
properties were transferred to him and his siblings.
These maneuvers met with little resistance from the
Internal Revenue Service, The Times found. The president’s parents, Fred and
Mary Trump, transferred well over $1 billion in wealth to their children, which
could have produced a tax bill of at least $550 million under the 55 percent tax
rate then imposed on gifts and inheritances.
The
Trumps paid a total of $52.2 million, or about 5 percent, tax records show.
The
president declined repeated requests over several weeks to comment for this
Times article. Mr. Trump’s lawyer, Charles J. Harder, provided a written statement
on Monday, one day after the Times sent a detailed description of its findings.
Harder said (sic): “The New York Times’s allegations of fraud
and tax evasion are 100 percent false, and highly defamatory. There was no fraud
or tax evasion. The Times allegations are extremely inaccurate.”
Mr. Harder sought to distance Mr.
Trump from the tax strategies used by his family, saying the president had
delegated those tasks to relatives and tax professionals, saying: “President
Trump had virtually no involvement whatsoever with these matters. The affairs
were handled by other Trump family members who were not experts themselves and
therefore relied entirely upon the aforementioned licensed professionals to
ensure full compliance.”
The Times’s findings raise new questions about Mr.
Trump’s refusal to release his income tax returns, breaking with decades of
practice by past presidents.
According to tax
experts, it is unlikely that Mr. Trump would be vulnerable to
criminal prosecution for helping his parents evade taxes, because the acts
happened too long ago and are past the statute of limitations.
There
is no time limit, however, on civil fines for tax fraud.
The findings
are based on interviews with Fred Trump’s former employees and advisers and
more than 100,000 pages of documents describing the inner workings and immense
profitability of his empire. They include documents culled from public sources,
e.g., mortgages and deeds, probate records, financial disclosure reports,
regulatory records, and civil court files.
The
investigation also draws on tens of thousands of pages of confidential records,
e.g., bank statements, financial audits, accounting ledgers, cash disbursement
reports, invoices, and canceled checks.
Most
notably, the documents include more than 200 tax returns from Fred Trump, his
companies and various Trump partnerships and trusts.
While the records do not include the president’s
personal tax returns and reveal little about his recent business dealings at
home and abroad, dozens of corporate, partnership and trust tax returns offer
the first public accounting of the income he received for decades from various
family enterprises.
[11
takeaways from
The Times’s investigation]
What emerges
from this body of evidence is a financial biography of the 45th president
fundamentally at odds with the story Mr. Trump has sold in his books, his TV shows
and his political life.
In Mr.
Trump’s version of how he got rich, he was the master dealmaker who broke free
of his father’s “tiny” outer-borough operation and parlayed a single $1 million
loan from his father saying (“I had to pay him back with interest!”) and
turning that into a $10 billion empire that would slap the Trump name on
hotels, high-rises, casinos, airlines, and golf courses the world over.
In Mr.
Trump’s version, it was always his guts and gumption that overcame setbacks.
Fred Trump was simply a cheerleader. “I
built what I built myself,” Mr. Trump has said, a narrative that was long
amplified by often-credulous coverage from news organizations, including The
Times.
Story
continues at The NY Times link – a must read.
My 2 cents: What will come from this? Not much likely
since seasoned savvy criminals like in this case always have away out – like
two sets of books or clever fancy lawyers who get – them off the hook with some
plea deal and slap on the wrist with a few millions paid in fines but not much
else.
Which all underscores how clever the Trumps were and have been for 40-50
years. Nice gig if you can skate this freely, isn’t it?
Now we wait on fall out – still I wonder how this
all ties into Russian money before the 2016 election and perhaps even so today?
Stay tuned and thanks for stopping by.
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