It was entertaining to see the House Ways and Means Committee go through gyrations of why they thought it necessary to obtain Mr. Trump’s tax returns and then their justification for releasing said tax returns to the American public. We know there was at least one overriding reason. The Democrats hate the man and will do anything to tarnish his image. The entire matter is quite humorous while displaying the lengths to which these people will go to concoct things to justify what they do.
“The American people need to know,” was the reason given when the tax returns were released to the public. Karen McAfee, the top committee staff person, was unable to enunciate a rationale for releasing the returns and provided the non sequitur “to make sure that the audits start on time.” Enough with the Committee’s malicious malfeasance.
Mind you almost no one other than people like myself (a CPA) can decipher tax returns even when they are 30-50 pages long. Why would anyone spend their time looking at a 500-page return? I have clients with twenty investment entities (K-1s). Mr. Trump has roughly 400 investment entities. These returns are nearly impossible to analyze for even highly experienced professionals like myself. I do not think too many Americans were spending their holiday weekend reviewing the 5,000 pages released.
Upon the release of the returns, both the New York Times and Washington Post stated they had a team of journalists working to analyze them. If this doesn’t give you a belly laugh, you don’t have a sense of humor.
Journalism majors who became such because they never again wanted to do long division or add a column of numbers were setting out to analyze Trump’s 500-page annual report to the IRS. These are people who probably have 15-page tax returns … in a good year.
There is a good reason why the Wall Street Journal found this statement, “The IRS initially limited the scope of some audits, with an agent noting in internal documents that Mr. Trump’s professional accounting firm and lawyers performed the necessary activities to ensure the taxpayer properly reports all income and deduction items correctly,” according to the report.
The IRS doesn’t even have qualified personnel to understand the maize of laws Congress created. Why would anybody else? Here is another point. The Democrats continue musing how their adding thousands of auditors is going to stop those rich tax cheats. I represent a lot of those “rich” people, and I can tell you we go to great lengths to comply with the law as best it can be understood in its many contradictions and changing machinations. If we take advantage of certain aspects of the law that is because Congress created those laws, and we are following what they created. Those Congressional members who are complaining about Trump taking advantage of the laws in place should stop bitching like whiny little children.
What did all these geniuses find out? Trump was not audited enough. I don’t know why he did not call up the Obama appointed IRS Commissioner and demand to be audited more. How unpresidential of him.
They found out he may have exaggerated his charitable contributions – not on his returns – when he was being braggadocious. Instead of commending him for donating his presidential salary for three years, they attacked him for not doing it in his fourth year. Knowing Trump, I am surprised he did the first three years and I commend him for it.
They criticized him for charging his children interest on loans. Then they said it was not enough. Then they said it was odd the interest payments were in round figures. Let me explain in plain English: If someone has an entity and they make a loan to themselves or someone else, they must create a note between the entity and the person getting the loan. The note must include interest at a reasonable rate. The rate may be reduced for related parties (family, themselves) because of reduced collection risk.
There are millions of entities that don’t actively comply with the rule because they are too busy running their businesses, feeding their families, and trying to survive. The fact that Trump’s kids were paying the interest was because (my highly educated guess) he had been audited before and his tax professionals said it would be better if the interest payments were being made currently. The critics are criticizing him for complying with the law.
Here is a big one. One of his entities, which had a huge $42,965 of income, had exactly $42,965 of expenses. Lock him up. What a crime! Who cares? “Total expenses equaling total income is a statistical impossibility, the figures are not evidence something illegal was done. It just doesn’t happen,” said the CNN hand-picked expert. Wrong. It happens all the time with small corporations. In fact, we engineer a taxpayer’s salary to zero out income, so they don’t pay double taxes on their corporate income. CNN, you need a new expert.
Then there are the losses they are criticizing. Trump supposedly lost $700 million in 2009. Does anyone remember all the way back then when the real estate market collapsed and then business took a hit? Why would anyone be shocked that a major real estate player like Trump got dumped on? Congress should understand this rule since they are constantly changing the rule. If you lose money in say 2022, you can currently carry forward the loss without limitation. But it can only offset 80% of your income in a subsequent year.
If you think this is bad law, think about your local friendly restaurateur who took it in the shorts in 2020 because of COVID. We are a country with a big heart, so we allow Ms. Restauranteur to offset those losses against income she made two years back or forward until you offset the tax to recoup some of the loss from reduced taxes. If it is ok for your friendly neighbor, it is Ok for Trump even if you are a raging Trump-hater. It is a nonissue.
I wrote a column years ago when Trump decided not to release his returns; I stated he should not. I knew the returns would be this complicated. They turned out to be and more. I knew the Trump-haters would be out in force to attack him for any minuscule pimple. Now these maniacs led by Richard Neal (D-MA) have opened an ugly can of worms. I cannot wait to get my hands on Paul Pelosi’s returns. He has an important wife.
