Poor Stallman

>>396 part 6 https://www.stallman.org/archives/2020-jul-oct.html#4_October_2020_(What_we_have_learned_from_the_conman's_tax_returns) -- A thorough report on what we have learned from the conman's tax returns. -- https://www.deccanherald.com/international/world-news-politics/donald-trump-did-not-pay-income-tax-in-10-of-last-15-years-894048.html -- Donald Trump did not pay income tax in 10 of last 15 years -- Sep 28 2020

The “consultants” are not identified in the tax records. But evidence of this arrangement was gleaned by comparing the confidential tax records to the financial disclosures Ivanka Trump filed when she joined the White House staff in 2017. Ivanka Trump reported receiving payments from a consulting company she co-owned, totalling $747,622, that exactly matched consulting fees claimed as tax deductions by the Trump Organization for hotel projects in Vancouver and Hawaii. Ivanka Trump had been an executive officer of the Trump companies that received profits from and paid the consulting fees for both projects — meaning she appears to have been treated as a consultant on the same hotel deals that she helped manage as part of her job at her father’s business. When asked about the arrangement, the Trump Organization lawyer, Garten, did not comment. Employers can deduct consulting fees as a business expense and also avoid the withholding taxes that apply to wages. To claim the deduction, the consulting arrangement must be an “ordinary and necessary” part of running the business, with fees that are reasonable and market-based, according to the IRS. The recipient of the fees is still required to pay income tax.

The IRS has pursued civil penalties against some business owners who devised schemes to avoid taxes by paying exorbitant fees to related parties who were not in fact independent contractors. A 2011 tax court case centred on the IRS’ denial of almost $3 million in deductions for consulting fees the partners in an Illinois accounting firm paid themselves via corporations they created. The court concluded that the partners had structured the fees to “distribute profits, not to compensate for services.” There is no indication that the IRS has questioned Donald Trump’s practice of deducting millions of dollars in consulting fees. If the payments to his daughter were compensation for work, it is not clear why Trump would do it in this form, other than to reduce his own tax liability. Another, more legally perilous possibility is that the fees were a way to transfer assets to his children without incurring a gift tax. A Times investigation in 2018 found that Trump’s late father, Fred Trump, employed a number of legally dubious schemes decades ago to evade gift taxes on millions of dollars he transferred to his children. It is not possible to discern from this newer collection of tax records whether intra-family financial manoeuvrings were a motivating factor. However, the fact that some of the consulting fees are identical to those reported by Trump’s daughter raises the question of whether this was a mechanism the president used to compensate his adult children involved with his business. Indeed, in some instances where large fees were claimed, people with direct knowledge of the projects were not aware of any outside consultants who would have been paid.

On the failed hotel deal in Azerbaijan, which was plagued by suspicions of corruption, a Trump Organization lawyer told The New Yorker the company was blameless because it was merely a licenser and had no substantive role, adding, “We did not pay any money to anyone.” Yet, the tax records for three Trump LLCs involved in that project show deductions for consulting fees totalling $1.1 million that were paid to someone. In Turkey, a person directly involved in developing two Trump towers in Istanbul expressed bafflement when asked about consultants on the project, telling The Times there was never any consultant or other third party in Turkey paid by the Trump Organization. But tax records show regular deductions for consulting fees over seven years totalling $2 million. Ivanka Trump disclosed in her public filing that the fees she received were paid through TTT Consulting LLC, which she said provided “consulting, licensing and management services for real estate projects.” Incorporated in Delaware in December 2005, the firm is one of several Trump-related entities with some variation of TTT or TTTT in the name that appear to refer to members of the Trump family. Like her brothers Donald Jr. and Eric, Ivanka Trump was a longtime employee of the Trump Organization and an executive officer for more than 200 Trump companies that licensed or managed hotel and resort properties. The tax records show that the three siblings had each drawn a salary from their father’s company — roughly $480,000 a year, jumping to about $2 million after Donald Trump became president — although Ivanka Trump no longer receives a salary. What’s more, Donald Trump has said the children were intimately involved in negotiating and managing his projects. When asked in a 2011 lawsuit deposition whom he relied on to handle important details of his licensing deals, he named only Ivanka, Donald Jr. and Eric.

On Ivanka Trump’s now-defunct website, which explains her role at the Trump Organization, she was not identified as a consultant. Rather, she has been described as a senior executive who “actively participates in all aspects of both Trump and Trump branded projects, including deal evaluation, predevelopment planning, financing, design, construction, sales and marketing, and ensuring that Trump’s world-renowned physical and operational standards are met. “She is involved in all decisions — large and small.” Hair stylists, table linens, property taxes on a family estate — all have been deducted as business expenses. Private jets, country clubs and mansions have all had a role in the selling of Donald Trump.

“I play to people’s fantasies,” he wrote in “Trump: The Art of the Deal.” “People want to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole. It’s an innocent form of exaggeration — and a very effective form of promotion.” If the singular Trump product is Trump in an exaggerated form — the man, the lifestyle, the acquisitiveness — then everything that feeds the image, including the cost of his businesses, can be written off on his taxes. Trump may be reporting business losses to the government, but he can still live a life of wealth and write it off. Take, for example, Mar-a-Lago, now the president’s permanent residence as well as a private club and stage set on which Trump luxury plays out. As a business, it is also the source of millions of dollars in expenses deducted from taxable income, among them $109,433 for linens and silver and $197,829 for landscaping in 2017. Also deducted as a business expense was the $210,000 paid to a Florida photographer over the years for shooting numerous events at the club, including a 2016 New Year’s Eve party hosted by Trump. Trump has written off as business expenses costs — including fuel and meals — associated with his aircraft, used to shuttle him among his various homes and properties. Likewise the cost of haircuts, including the more than $70,000 paid to style his hair during “The Apprentice.” Together, nine Trump entities have written off at least $95,464 paid to a favourite hair and makeup artist of Ivanka Trump.

In allowing business expenses to be deducted, the IRS requires that they be “ordinary and necessary,” a loosely defined standard often interpreted generously by business owners. Perhaps Trump’s most generous interpretation of the business expense write-off is his treatment of the Seven Springs estate in Westchester County, New York. Seven Springs is a throwback to another era. The main house, built in 1919 by Eugene Meyer, the onetime head of the Federal Reserve who bought The Washington Post in 1933, sits on more than 200 acres of lush, almost untouched land just an hour’s drive north of New York City. “The mansion is 50,000 square feet, has three pools, carriage houses, and is surrounded by nature preserves,” according to The Trump Organization website.