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Tag: internal revenue service
Inspector General To Probe IRS Audits Of Trump Critics Who Led FBI

Inspector General To Probe IRS Audits Of Trump Critics Who Led FBI

Washington (AFP) - The Internal Revenue Service said Thursday it had asked for an independent investigation into rare, intrusive audits of two ex-FBI heads who were prominent adversaries of former president Donald Trump.

James Comey, the FBI director until he was sacked by Trump in 2017, and Andrew McCabe, Comey's deputy and temporary replacement, were both subjected to the Internal Revenue Service reviews while the Republican billionaire was in office.

Individuals are supposed to be picked at random for the IRS's National Research Program audits, making the chances of Comey being singled out in 2017 about one in 30,000, while McCabe's odds in 2019 were about one in 20,000.

The revelation, first reported by The New York Times, raised questions over how two men who ran the nation's premier domestic police agency and were seen by Trump as among his most high-profile foes could both have been selected.

Trump sacked Comey in 2017 and then called on him to be arrested for treason, angered by his investigation of the then-president's extensive ties to Russia.

McCabe, who became acting FBI director after Comey's dismissal, was fired by Trump's Justice Department over accusations of lying to investigators that were never followed up with charges.

Trump smeared McCabe, too, again with unfounded treason allegations, and relentlessly pushed for his prosecution.

"I don't know whether anything improper happened, but after learning how unusual this audit was and how badly Trump wanted to hurt me during that time, it made sense to try to figure it out," Comey said in a statement to the Times.

"Maybe it's a coincidence or maybe somebody misused the IRS to get at a political enemy. Given the role Trump wants to continue to play in our country, we should know the answer to that question."

'Political Targeting'

The IRS confirmed in a statement that its head Chuck Rettig -- appointed by Trump in 2018 -- had personally asked a Treasury Inspector General for a review.

"Audits are handled by career civil servants, and the IRS has strong safeguards in place to protect the exam process -- and against politically motivated audits," IRS spokeswoman Jodie Reynolds told AFP.

"It's ludicrous and untrue to suggest that senior IRS officials somehow targeted specific individuals for National Research Program audits."

The referral earned support from lawmakers on both sides of the aisle.

Rep. Richard Neal, the Democratic chairman of the powerful House Ways and Means Committee, said in a statement the "political targeting" of Comey and McCabe marked "a crack in IRS's fragile credibility."

His Republican counterpart Rep. Kevin Brady said he supported "investigating all allegations of political targeting," adding that the IRS should never be used as a weapon against political opponents.

Trump's representatives did not respond immediately to a request for comment, although the Times reported that a spokesman said the ex-president had "no knowledge of this."

Comey's audit lasted more than a year, and he and his wife were found to have overpaid their 2017 federal income taxes and got a $347 refund.

McCabe told the Times he and his wife had paid a small amount they were found to be owing.

"I have significant questions about how or why I was selected for this," he said.

Trump Complains: ‘I’ve Been Attacked For Giving $19M To Charity’

Trump Complains: ‘I’ve Been Attacked For Giving $19M To Charity’

Donald Trump released a statement on Thursday, after agreeing to pay $2 million to settle a lawsuit against his now-defunct namesake foundation, complaining that he had been “attacked by political hacks” for donating $19 million to charity.

“I am the only person I know, perhaps the only person in history,” he claimed, “who can give major money to charity ($19M), charge no expense, and be attacked by political hacks in New York State. No wonder why we are all leaving!”

Trump recently declared himself a resident of Florida, after decades as a New Yorker. According to the New York Times, a source close to Trump said the change was for tax purposes.

The president added on Thursday that “every penny of the $19 million raised by the Trump Foundation went to hundreds of great charitable causes” and that contrary to the claims of the New York attorney general’s office, his foundation was only guilty of “some small technical violations, such as not keeping board minutes.”

He was ordered this week to pay out $2 million to several charitable groups after he admitted to misusing money raised by his foundation.

Like more than 13,000 of the other false or misleading claims Trump has made since taking office, his argument this week that he himself paid $19 million to charity is dubious at best.

According to a Pulitzer-winning Washington Post analysis, just $5.5 million of the money raised by the Donald J. Trump Foundation actually came from Trump (though a spokesperson claimed Thursday that “more than $9 million came directly from” Trump). He stopped donating to the foundation completely in 2008 and instead relied on millions in donations from other rich people — including his first Small Business Administrator, Linda McMahon.

While some of the foundation’s money did go to worthwhile causes, Trump also used it as a his personal piggy bank to fund things like a $264,631 renovation for a fountain outside one of his hotels, legal settlements for his for-profit companies, a portrait of himself, and a $7 payment to the Boy Scouts of America (which was the cost of membership at the time). He often used the foundation to make charitable donations he claimed were coming out of his personal funds.

In 2016, the foundation admitted to the Internal Revenue Service that it had engaged in illegal “self-dealing.” The same year, his legal team claimed an “unfortunate series of coincidences” lead to an illegal and undisclosed $25,000 political donation in support of then-Florida Attorney General Pam Bondi (R).

The foundation gave much of its money for political purposes, including two $10,000 donations to Project Veritas, James O’Keefe’s tax-exempt conservative group known for producing misleading “sting” videos, often with a pro-Trump message. It ceased operations in December 2016 after the New York attorney general filed suit alleging improper dealings.

Contrary to Trump’s claims of minor technical violations, a judge found he illegally used his foundation to further his 2016 political campaign — a huge no-no for tax-exempt 501(c)(3) charitable organizations — and pay business debts. As part of the settlement, Trump admitted to these violations of the law.

A 1999 examination by The Smoking Gun called Trump “The .00013% Man” based on the Trump Foundation’s “paltry” charitable giving. A 2011 follow-up found that contrary to Trump’s claims of being an “ardent philanthropist,” from 1990 to 2009, Trump donated just $3.7 million to his foundation compared to the “seven billion” he claimed to have in his bank account, making him perhaps “the least charitable billionaire in the United States.”

Published with permission of The American Independent.

IMAGE: Donald Trump addresses the media regarding donations to veterans foundations at Trump Tower, May 31, 2016. REUTERS/Lucas Jackson

 

Dear IRS: Orangutan Hairs Are Legit!

Dear IRS: Orangutan Hairs Are Legit!

Dear Commissioner,

As you know, our client is dying to share his tax returns with American voters before the upcoming presidential election. However, he has prudently chosen to wait until your agency has completed its unfair audit of his Form 1040 filings.

Mr. Trump is offended and outraged that your inspectors have questioned several business expenses that he listed under Part V of Schedule C. We will address each of these disputed issues forthwith:

1. “Miscellaneous Hair Harvesting Fees — $767,000.”

Mr. Trump’s unique mane has become a key visual emblem of his business brand. All costs associated with the maintenance and enhancement of his hair should be deductible.

The silky orange strands on Mr. Trump’s head come from the armpits of Pongo pygmaeus, an orangutan found only in the rain forests of Borneo. Authorities there are protective of these rare animals, and have imposed upon Mr. Trump a fee of $1,000 for each harvested hair.

Mr. Trump asserts that this is a legitimate business expense, and it should not be challenged by the IRS.

2. “Orangutan Pacification Program — $315,400.”

Borneo’s orangutans are mostly peaceful creatures, but when provoked they are capable of attacking human intruders. Therefore, removing armpit hairs from an adult specimen can be both challenging and dangerous.

When Mr. Trump heard that orangutans can be soothed by classical music, he immediately arranged to fly a string quartet from the New York Philharmonic Orchestra to the jungle of Borneo.

There the musicians performed Schubert’s famous String Quartet No. 14 in D minor, also known as “Death and the Maiden,” which soon caused the orangutans to fall into a deep sleep. During that time, extraction experts hired by Mr. Trump successfully removed approximately 767 hairs from several adult male and female orangutans.

The high cost of this project was borne entirely by Mr. Trump. He used his personal aircraft to transport the string quartet to Indonesia and paid full union-scale wages for the musicians’ performance. He also reimbursed them for their malaria shots.

Because no other species of wild primate produces the unusual gossamer hair compatible with Mr. Trump’s image, we contend that the Borneo trip was a legitimate and necessary business expense under the current tax rules.

3. “Replace Damaged Viola (and bow) — $6,223.”

Through no fault of Mr. Trump, one of the juvenile orangutans awakened near the end of the quartet’s performance and went after the viola player. The man escaped unharmed, but his expensive instrument was seized from him and reduced to splinters by the testy young ape.

Mr. Trump considers this loss to be a deductible expense, no different from replacing a tire that blows out on one of his jets.

4. “Solarium Upgrade at Trump Tower — $178,655.”

Because Borneo’s equatorial climate is much warmer and humid than that of midtown Manhattan, Mr. Trump hired a contractor to enlarge and upgrade the solarium and tanning salon in his penthouse.

Without such improvements, which include an orchid-scented humidifier, the orangutan hairs obtained and curated by Mr. Trump would eventually lose their texture, sheen and special ginger hue.

In time, the strands would become brittle and break free from the thermoplastic micro-staples attaching them to Mr. Trump’s scalp. Clearly, the solarium modifications are essential for Mr. Trump to maintain his current appearance, and the growth of his brand.

5. “Personal Grooming Assistance — $322,399.”

As one of the most photographed figures in the world, Mr. Trump is puzzled by your agency’s failure to understand his need for a staff to assist with his daily grooming.

Many movie stars and TV celebrities less important than Mr. Trump employ teams of such assistants. They might not be paid as highly as Mr. Trump’s, but we would argue that the fees paid to his stylists are reasonable considering the challenges they face.

Mr. Trump can’t just walk into a Supercuts for a quick trim. It requires specialized skills to painstakingly comb, layer and shape 767 delicate hairs — and to keep them flawlessly in place for scores of TV interviews and town-hall gatherings. The stylists who work on Mr. Trump earn every penny he pays them, and the IRS has no cause to disallow these expenses on his tax returns.

He is looking forward to a timely completion of your audit, and would hugely appreciate it if you didn’t leak the part about the Borneo trip to any reporters.

Carl Hiaasen is a columnist for the Miami Herald. Readers may write to him at: 1 Herald Plaza, Miami, Fla., 33132.

(c) 2016, The Miami Herald Distributed by Tribune Content Agency, LLC.

Photo: U.S. Republican presidential candidate Donald Trump speaks during a campaign rally at the Century Center in South Bend, Indiana, U.S., May 2, 2016. REUTERS/Kamil Krzaczynski

Dark-Money Political Groups Are Probably Violating Tax Laws

The world of dark-money politics may soon get a little brighter, if the IRS agrees to investigate a number of nonprofit political groups associated with political action committees and Super PACs.

The groups that are almost certainly violating tax law are nonprofits known as 501(c)(4) groups, after the section of the tax code that governs their behavior. They are very similar to 501(c)(3) groups, which are typical nonprofit charities, with one important difference: while 501(c)(3) groups are legally prohibited from interfering in politics, 501(c)(4) groups are allowed to make political contributions as long as it’s not their “principle purpose.”

501(c)(4) organizations are officially considered “social welfare organizations,” not political organizations, but that hasn’t stopped many 501(c)(4)s from engaging in politics. In fact, many 501(c)(4)s exist only to funnel money to Super PACs that run political advertisements supporting or opposing political candidates and policies. They’re like shell corporations, only they’re nonprofits that can accept tax-deductible donations. And unlike a Super PAC, which can accept unlimited corporate donations but must publicly disclose its donors to the Federal Elections Commission, a 501(c)(4) — since it’s not considered a primarily political organization — never has to register with the Federal Elections Commission or disclose the names of the individuals and corporations that fund it.

Unsurprisingly, many political operatives have seen the value in being able to accept unlimited corporate donations without telling the public, and many 501(c)(4)s have been set up to shield the identities of donors to Super PACs. For instance, Karl Rove’s Super PAC, American Crossroads, is associated with the 501(c)(4) group Crossroads GPS, and Priorities USA Action, a Super PAC focused on Barack Obama’s re-election, is associated with the 501(c)(4) group Priorities USA.

It seems these 501(c)(4) groups are breaking the law, since their primary purpose is to interfere in politics, and they could conceivably be prosecuted by the IRS. Last week, campaign finance watchdogs Democracy 21 and the Campaign Legal Center sent a letter to the IRS urging them to investigate these 501(c)(4) groups and others like them. Last October, Sen. Dick Durbin sent a similar letter to the IRS, and in April, longtime campaign finance advocate and former Sen. Russ Feingold called the creation of Priorities Action USA akin to “playing with fire.”

Recently, satirist Stephen Colbert mocked the close ties between political groups like Super PACS and supposedly non-political 501(c)(4) organizations. In a segment on his show (which can be viewed below), Colbert sets up a 501(c)(4) named SHHH! to funnel money to his SuperPAC, Americans For A Better Tomorrow, Tomorrow. His lawyer, Trevor Potter, reminds him that, legally, his 501(c)(4) organization’s “principle purpose for spending its money” cannot be politics. “No, my principle purpose is an educational entity,” Colbert replies, “I want to educate the public that gay people cause earthquakes.”

He later seems shocked that what he has just done is legal. He asks, “I can take secret donations from my [501](c)(4) and give it to my supposedly transparent Super PAC…what is the difference between that and money laundering?” Potter can only reply that “it’s hard to say.” Unfortunately for many political 501(c)(4)s, the IRS may soon come to the same conclusion.