Charges Against the Trump Organization a Master Class in Tax Evasion

[NJCher]

Written by a tax professor, this article explains in detail how the tax scam worked.

Dollar for dollar, the salary was reduced for the benefits. So if the salary was $100 and the benefit was $15, the salary then became $85. How freaking obvious can you be?

I've snipped some choice paragraphs below. It is not the first four paragraphs of the article.

The Charges Against the Trump Organization Are a Master Class in Tax Evasion
BY ADAM CHODOROW
JULY 04, 202112:04 PM

snip

This leads us to the exciting world of fringe benefits, noncash payments for work done. Clearly, if your employer pays you $100,000 as a cash salary, you owe taxes on $100,000. But what if you could convince your employer to pay for your housing expenses, provide you a luxury car, and cover your children’s private school tuition, as Weisselberg is alleged to have done? Unfortunately for you, Congress is not totally out to lunch. The tax code provides that “compensation for services, including fees, commissions, fringe benefits, and similar items” are income.

That these benefits should be considered income is made crystal-clear by the fact that Weisselberg’s agreed-upon salary was allegedly reduced dollar-for-dollar by the amounts paid on his behalf. It is as if the Trump Organization paid Weisselberg and he paid his own expenses, but they decided to cut out the middleman. Even if the CFO had never touched the money, he constructively received it when it was spent on his behalf. (The same cannot be said for the alleged off-the-record cash payments he received.)

In some cases, such as with employer-provided health insurance, Congress has expressly excluded fringe benefits, with the exclusion acting as a form of government subsidy. Other examples include certain forms of parking, small life insurance policies, and so on. The general idea is that these activities produce positive externalities that employees don’t capture, such that a subsidy is necessary to maximize the public good.

snip


I hope the lawyers try to make the case that Weisselberg in a Mercedes is for the public good.

[MichMan]

1. Just curious if those rules also apply to congress itself ?

Do they declare their plethora of perks of holding office as taxable income?

[Shermann]

2. The title is sort of a paradox

If they put on a so-called "master class", there wouldn't be charges.

Even if they beat the charges, the attorneys will make off with any ill-gotten gains.

Its sort of like when your cellmate brags about how easy it is to get away with crimes. Not that I've ever had a cellmate.

[NJCher]

3. maybe the writer means

the story itself, not the organization, is the "master class."

Speaking as a teacher, we always remind students that failure is a learning experience.

However, you can be sure such instances are not rare. I know someone who works with the 3 per centers and the perks they give themselves never ceases to shock me. Some of them are executives from other countries, so I don't know what their laws are. They think nothing of $6000 a night hotel rooms, paying a courier to drive $350 worth of their kid's favorite sandwich from NYC to his college in VT, and other similar indulgences. It is what goes wrong when too much money is in the hands of a few. Needs to stop.

[Shermann]

4. Fair point, that is probably the intended meaning nt