Tag: tax
Trump's Dark Money Machine Is Designed To Deceive The Public

Trump's Dark Money Machine Is Designed To Deceive The Public

Thanks in part to the U.S. Supreme Court’s 2010 ruling in Citizens United v. Federal Election Commission, the phrase “dark money” is heard a great deal these days in connection with U.S. politics. Citizens United, with its majority opinion by libertarian then-Justice Anthony Kennedy, defined campaign and election spending as a form of constitutionally protected “speech.” And it opened the “dark money” floodgates in a major way.

Roger Sollenberger, in an article published by The Daily Beast on January 19, examines the “dark money machine” of former President Donald Trump. According to Sollenberger, that operation is only getting worse — and is purposely designed to be “confusing.”

“Just when it seemed like former President Donald Trump’s dark money maze couldn’t get any darker, it looks like someone shot the lights out,” Sollenberger reports. “At least, that’s the impression experts in nonprofit law took away from a pair of previously unreported tax filings from the dark money arm of Trump’s political machine, America First Works. Those experts said it appears from the filings and other incorporation records that the advocacy group — which raised almost no money in 2021 — has closed down its original Virginia entity and opened another one in Washington, D.C. under the same name, with the same board of directors. The question is why — and it comes as Trumpworld is laying the groundwork for a second Trump term.”

On December 21, 2022, Axios’ Lachlan Markay reported that if Trump wins the 2024 election, he “will enjoy a key asset absent from his 2017 White House transition: a sprawling infrastructure already preparing to staff a new administration and immediately enact major policies.” Allies of the former president, Sollenberger notes, cite that infrastructure as a key difference between Trump and a MAGA Republican he may be running against in 2024’s GOP presidential primary: Florida Gov. Ron DeSantis — that is, if DeSantis decides to run. Firebrand author Ann Coulter, pundits at Fox News and Fox Business and writers for the National Review have all been pushing DeSantis for 2024.

“2021 was essentially a rebuilding year for Trump’s dark money machine,” according to Sollenberger. “That work not only came at a cost, it also appears to have happened in a black box, adding another layer of opacity on top of a fundraising and advocacy network that’s already grown so convoluted even legal experts have a hard time untangling it. In this instance, not only is it hard to follow the money, it’s hard to say for sure whether there’s all that much money to follow in the first place. At least, there appears to be a lot less of it flying around in the fractious 12 months after Trump left the White House.”

Sollenberger goes on to explain why America First Works fits the definition of a dark money operation.

“AFW is a 501(c)(4) nonprofit organization, which are often colloquially called ‘dark money’ groups,” Sollenberger explains. “These groups can raise funds in unlimited amounts, and while they don’t have to disclose their donors’ identities, the organizations can use a chunk of that unattributed money for political activity. According to its 2021 tax filing, which was first obtained by The Daily Beast, AFW — which raised about $51 million the previous year — doled out millions of dollars in transfers and grants. That filing shows that the funds all went to a handful of groups that make up a financial and political support network behind the former president.”

The Daily Beast reporter adds, “Those transactions included a $3 million grant to AFW’s 501(c)(3) counterpart, America First Policy Institute, and an additional $250,000 to Make America Great Again Policies — a lesser-known entity which has reported having a cost-sharing agreement with a new pro-Trump super PAC. AFW also paid another $250,000 for ‘research’ to Republican opposition research firm America Rising, according to the document.”

Sollenberger points out that if Trump’s dark money “maze” is “maddeningly difficult to follow,” that is “almost certainly part of the point,” according to government and campaign finance watchdogs.

Interviewed by the Beast, Brendan Fischer (who serves as deputy director of government for the watchdog group Documented), discussed the drop that occurred with America First Works in 2021 and told the Beast, “America First Works served as the dark money arm of Trump’s campaign in 2020, and it is not uncommon for a politically active dark money group to see a decline in revenue during a non-election year. But this drop is precipitous, and can’t be explained by election cycles alone…. The in-kind contributions of staff time and office space indicate that AFW employees were still working and on the payroll in 2021…. It also would be understandable if AFW was just going to spend down its existing funds and close up shop, but that’s not what’s going on either.”

The “name changes” with Trump-associated “dark money” operations, according to Sollenberger, are designed to be confusing.

“Last December,” Sollenberger reports, “an AFW spokesperson told the Daily Beast it wasn’t a name change; America First Policies had been ‘sold’ to America First Works 'in a private deal’…. However, previously unreported tax filings now show that another ‘America First Works’ was created that same year, this one in Washington, D.C. AFW1 reported a $140,100 grant to the new America First Works (AFW2), which AFW1 cites as a related entity.”

Sollenberger continues, “But The Daily Beast also obtained AFW2’s tax filing, which shows that the two groups share a slate of directors and that the grant comprised all of AFW2’s revenue for 2021. Almost all the money — around $132,000 of it — was spent on a ‘security deposit,’ the document shows, though it discloses no other underlying assets. Again, all of these moves and name changes seem designed to do one major thing: confuse.”

Reprinted with permission from Alternet.

Trump Paid Little Tax While Claiming Huge Losses And Dubious Deductions

Trump Paid Little Tax While Claiming Huge Losses And Dubious Deductions

On Tuesday evening, the House Ways and Means Committee voted 24 to 16 to release information it has obtained on Donald Trump’s tax returns. Some of that information has already been made available to the public. The report shows that Trump, while running as a successful billionaire, reported massive losses on his business dealings in the years just before entering the White House.

The information released to the public includes the years 2015 through 2020. In that first year, Trump claims almost $77 million loss in the form of “other income” and claims a $21 million charitable contribution in the form of a “conservation easement.” As Laura Clawson reported back in 2020, that easement was actually part of a shady real estate deal in which Trump used one of his typically overvalued assessments to turn a money-losing golf property into a tax break that he could spread out over years of returns. That’s just one in a long list of things that the House committee found questionable in Trump’s 2015 return.

In all, over the six years of returns, Trump reported making money only in 2018 and 2019. He used a combination of reported losses and questionable deductions to keep his tax bills to $750 in 2016, $750 in 2017, and $0 in 2020. Trump did pay $641,935 in 2015, but don’t worry. He still has a “claim for refund” filed for that year based on a claim that he was owed more for “historic restoration.” If that claim is successful, it will return that 2015 money to Trump.

Trump’s taxes were kept low by two factors: reported losses and those big “charitable deductions.” That didn’t just include Trump’s big $21 million “conservation” deduction (generated by theoretically turning the entire property into home lots, assigning a $2 million per value to those lots, then valuing Trump’s contribution as if he had donated 10 of these nonexistent lots).

The nature of Trump’s reported losses is itself more than a little questionable. For example, in 2015, Trump reported that he made money from income, interest, dividends, capital gains, and other gains. Those last two added up to $43 million. Still, he ended up reporting a net loss after reporting $76 million in losses as “other income.” That huge loss was mostly a carryover of reported operating losses in previous years—losses that Trump would keep pressing forward to erase potential income year after year.

Overall, here’s what Trump reported as income year by year.

TRUMP'S REPORTED INCOME

This gives Trump a reported $54 million loss over these six years. In those years when he did pay taxes, he paid effectively four percent of his reported income in 2018, and three percent in 2019. The 2015 numbers involved paying taxes that carried over from the previous year, but Trump is still asking the IRS to reduce that year to no more than $750.

In the short time the returns have been available to the House committee, they’ve identified a number of issues with each year of the returns. That includes not just multiple questionable charitable deductions, but a lot of deductions that are reported as large “cash” payments for which there doesn’t appear to be documentation. The committee also notes the use of Trump’s 500+ sole proprietorship businesses as a means of reporting everyday costs of living, and some expensive hobbies, as if they are legitimate business deductions.

Trump also appears to have written off over $2 million in property taxes as an income deduction; the committee notes that New York law caps that deduction at $10,000.

What’s also striking is that in every single year, including 2018, Trump’s core businesses—his golf courses, hotels, and real estate—operated at a reported loss. If Donald Trump actually makes money at anything, it’s not any of the areas in which he brags about being a success. In his best year, Trump reported that he lost $11 million on real estate.

Whether the discrepancies in Trump’s taxes will lead to fines or charges of tax fraud isn’t certain. What is certain is that with an incoming Republican majority in the House, any investigation into Trump is likely to be completely discarded.

All other presidential candidates over the last two decades have released their own returns during the campaign, but Trump did not. Though the House has a legal right to review the returns of anyone, obtaining these returns involved a multi-year court battle with Trump objecting and appealing at every possible stage to delay the delivery of the returns to the Congress. He almost managed to outlast the Congress … but he didn’t quite make it.

Reprinted with permission from Daily Kos.

For Two Years, Trump Escaped Mandatory Audits In 'Massive' IRS Failure

For Two Years, Trump Escaped Mandatory Audits In 'Massive' IRS Failure

A House committee says that for the first two years Donald Trump held office, the Internal Revenue Service (IRS) did not audit him, NPR reports. And no audits were completed during his entire presidency.

This analysis comes after the House Ways and Means Committee agreed this week to release Trump’s tax filing history from 2015-2020. The committee has pursued evidence of the former president’s tax returns for almost four years.

Committee chairman Rep. Richard Neal of Massachusetts, a Democrat, said, "The Committee expected that these mandatory audits were being conducted promptly and in accordance with IRS policies. However, our review found that under the prior administration, the program was dormant. We know now, the first mandatory audit was opened two years into his presidency. On the same day this Committee requested his returns."

"We anticipated the IRS would expand the mandatory audit program to account for the complex nature of the former president's financial situation, yet found no evidence of that," Neal said. "This is a major failure of the IRS under the prior administration, and certainly not what we had hoped to find."

According to NPR, when the Democratic congressman previously asked the IRS for Trump’s tax returns from 2013-2018, the Treasury Department denied his request citing it was “not supported by a legitimate legislative purpose.”

But now, because Democrats on the committee asserted that Trump’s tax returns are imperative to the IRS's presidential audit program, the returns can officially be released. And the Supreme Court rejected Trump’s October emergency application he hoped would block the greenlight for release.

In a split party vote, House committee Republicans voted against the release.

Ways and Means Republican Leader Rep. Kevin Brady of Texas said "We urge Democrats to turn back while they still can. If they release tax returns today it will be a stain on this committee."

In a statement he released last week, Brady said, "Ways and Means Democrats are unleashing a dangerous new political weapon that reaches far beyond President Trump, and jeopardizes the privacy of every American.” He continued, "Going forward, partisans in Congress have nearly unlimited power to target political enemies by obtaining and making public their private tax returns to embarrass and destroy them."

In disagreement, Neal said, "This was not about being punitive, it was not about being malicious."

Reprinted with permission from Alternet.

Why DeSantis Can’t Snatch Disney’s Special Tax District

Why DeSantis Can’t Snatch Disney’s Special Tax District

For 55 years, Disney had a special tax/business arrangement in Florida. But that arrangement has been ended by Gov. Ron DeSantis, who was determined to get back at Disney for voicing its opposition to the controversial Parental Rights in Education Act of 2022, a.k.a. the “Don’t Say Gay” law. And according to Miami Herald reporter Mary Ellen Klas, Disney addressed its investors in a statement posted on April 21.

Disney, Klas reports, has told its investors “that it would continue to go about business as usual.”

Klas explains, “The statement, posted on the website of the Municipal Securities Rulemaking Board on April 21 by the Reedy Creek Improvement District, is the only public statement Disney has supplied since lawmakers unleashed their fury over the company’s vocal opposition to the Parental Rights in Education law, also known as the ‘Don’t Say Gay’ bill. The statement, first reported by WESH 2, quotes the statute, which says, in part, that the ‘State of Florida pledges.... it will not limit or alter the rights of the District.... until all such bonds together with interest thereon.... are fully met and discharged.’”

In its April 21 statement, Disney writes, “In light of the State of Florida’s pledge to the District’s bondholders, Reedy Creek expects to explore its options while continuing its present operations, including levying and collecting its ad valorem taxes and collecting its utility revenues, paying debt service on its ad valorem tax bonds and utility revenue bonds, complying with its bond covenants and operating and maintaining its properties.’’


Attorney Jake Schumer has said that the State of Florida has a contractual obligation not to interfere with the Reedy Creek Improvement District until the bond debt is paid off. Schumer told the Herald that the State of Florida “simply can’t go forward under the contract clause” and “would have to pass something to address this.”

According to Klas, Scott Randolph — tax collector for Orange County, Florida — “agrees with Schumer that the only way for the state to dissolve Disney’s special district is for the debt to be assumed by the county government.”

Randolph told the Herald, “Orange County gets Reedy Creek’s assets, debts and obligations…. Unless they want to cut services and cut spending elsewhere, they’re going to have to find a way to absorb $163 million.”

Reprinted with permission from Alternet.