Charity's promised back pay to Roy Moore was not reported to IRS as income

[demmiblue]

Source: The Washington Post

The Alabama charity once led by Senate candidate Roy Moore did not report to the Internal Revenue Service that in 2011 it guaranteed him $498,000 in back pay, according to an income report provided to The Washington Post by the charity itself.

Five tax law and accounting specialists said it appears the guaranteed payment should have been reported as compensation, a disclosure that would have triggered a federal tax bill of more than $100,000.

Moore and his campaign have not responded to questions about whether he paid the taxes, or to requests that he release his income tax returns.

John Bentley, a board member and former chairman of the charity, the Foundation for Moral Law, said Moore once told him that he had sought advice on the financial arrangement from an accountant. Moore said he was told the compensation was not taxable until he cashed in on the promised back pay, Bentley said. Moore has not yet done so, he said.

Read more: https://www.washingtonpost.com/investigations/charitys-promised-back-pay-to-roy-moore-was-not-reported-to-irs-as-income/2017/10/19/fa31ab9c-b042-11e7-99c6-46bdf7f6f8ba_story.html?hpid=hp_hp-top-table-main_foundationtax735pm%3Ahomepage%2Fstory&utm_term=.8b70fe79675c

[ck4829]

1. Silly liberal, actually following the law is only for little and/or non-white people

[kimbutgar]

2. So much evidence Moore is a lying corrupt tax cheating person

Yet he will win overwhelmingly because he has an (R) by his name and is Alabama.

Our country has become an embarrassment to me as an American.

[mahatmakanejeeves]

3. I am not a CPA or a tax attorney.

Last edited Fri Oct 20, 2017, 12:29 PM - Edit history (1)

From the article:

John Bentley, a board member and former chairman of the charity, the Foundation for Moral Law, said Moore once told him that he had sought advice on the financial arrangement from an accountant. Moore said he was told the compensation was not taxable until he cashed in on the promised back pay, Bentley said. Moore has not yet done so, he said.

I do not understand all the intricacies of tax law. I too think that there is a difference between income that you will receive (a "guaranteed payment" ) and income that you have received (you know, the amount in box whatever of your W-2), and that you report that which you have received, not that which you will receive eventually.

People who know more about this than I do came to a different conclusion. Also from the article:

Five tax law and accounting specialists said it appears the guaranteed payment should have been reported as compensation, a disclosure that would have triggered a federal tax bill of more than $100,000.

I come from a long line of accountants, and I am aware that there are many places in the tax code that are subject to interpretation. The United States Tax Court is right across the street from me. I've never been in there, but I'm guessing they do a brisk business.

[Cryptoad]

4. I am no expert either,,,,

but I do know that their are different methods of accounting some count money when it is received and others count money when it is promised. Both are correct but u can't jump from one method to another at will. ......

[turbinetree]

5. What is truly remarkable is that this asshole is tied with Doug Jones

in Alabama, and the citizens of that state go around and brag about there law and order, well, the governor had to resign had a affair, there appointed senator who use to work in the AG office basically let the governor have a get out of jail free card, and were not even mentioning the Thad Cochran and what he trying to do against the country and other citizens, like taxes, and health care



So to stop this fanatic that likes to look like Roy Rogers on his horse trigger, and his fanatical wife living the good life using that money for her benefit also scamming and not reporting and paying taxes from a scam operation

You think there Alabama that someone that convicted three KKK assholes and has done more for community, than having disgraced judge that thinks he is above the law because of his god says that its a okay................

Time to elect some integrity and someone with principles

https://secure.actblue.com/donate/doug-jones

[TexasBushwhacker]

6. You don't get taxed until you receive the money

This is why some executives enroll in defered compensation programs.

Moore would only be taxed on the amount reported on a W2 or 1099.

[Princess Turandot]

7. The reason the tax experts say it was taxable:

Normally, individual taxpayers are taxed upon compensation when they actually receive it. A quick example: you started working at the Big DU Company on 1/01/2017. You get paid every two weeks on a Friday, such as today, 10/20/2017. The check is for the payroll period ending 10/13/2017, because processing the information needed to determine payment amounts and create checks when you have a lot of employees doesn't happen instantaneously. So, while they definitely owe you your earned salary for 10/16 to 10/20/2017, until you receive payment for it, it's not income to you and you don't owe taxes on it as of today. And because you agreed to the payment timing, you can't demand that they pay you for those 5 days today.

What happened here is that they owed Moore $498,000 in back compensation, based upon whatever salary arrangement they had previously made with him. If that's where it stood today, the $498,000 would likely not yet be taxable.

But that's not where it ended: they gave him something of value, even if it was not 'cash', which guaranteed the money. From the article:

In early 2011, the charity’s board agreed to pay Moore for “arrearages of salary during the past four (4) years,” according to the charity’s record of the meeting. The board issued a promissory note for $393,000 and arranged a second mortgage on the group’s building to back it up. In December of that year, the note and the mortgage were updated to guarantee Moore $498,000.

“The entire principal balance will be due and payable on demand,” said the updated promissory note on Dec. 19, 2011.

The mortgage arrangement meant the note had actual assets behind it. That last sentence gave him something of value from them on the day they signed the note, the right to immediately claim the funds under any circumstances. That's why the experts think it immediately became taxable income at that time.

[Scruffy1]

8. I have run into this before.

thanks for the explanation.