CHENEY UNDERPAID HIS TAXES!!! TAX-EVASION?!?!?

[berni_mccoy]

FROM http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=364&topic_id=931892&mesg_id=931892

Cheney made over 8 million dollars (Adjusted Gross Income) in 2005 and he fully deducted from his income donations to charities (YEAH RIGHT) of over 6 million dollars. This left him just under 2 million dollars income and he paid nearly 28% of that as taxes.

PROBLEM IS: The max deduction you can take in a given year for charitable donations is FIFTY PERCENT of your AGI. You can carry over (and keep carrying over) excess, but the most it can affect your deduction is by lowering your income by 50%. This means Cheney underpaid by at least $800K.

Unless there is some incredible LOOPHOLE here that I am not aware of, Cheney is thumbing his nose at the IRS.

Anyone think I've missed some tax rule here that Cheney has applied, speak up now...

[tandot]

1. Rules, laws, and regulations are for Democrats, not Republicans

Besides that, Bush and Cheney can do whatever they please. That is the way it works in a dictatorship.

[Wickerman]

2. any word on the charities he contributed to?

The Rebuild Trent Lott's house fund?

Victims of Shotgun "pepperings" Society?

[gatorboy]

9. Probably one of those reliable Santorum charities.

eom

[Jack Rabbit]

3. Shades of Al Capone!!

Cheney has proved to be a pretty slick crook. He's done an awful lot for which he should be locked up and the key thrown away.

But maybe if we can't get him for war crimes, torture, conflict of interest and war profiteering, we can get him for income tax evasion.

It's proved to be a good fall back against infamous criminals of the past.

[intheozone]

4. Law changed.

I think that law was changed late last year due to Katrina. I think you can now deduct up to 100% of AGI for charitable contributions. But, I haven't actually read the statute so I could be wrong. Anyone out now for sure?

[boomboom]

6. Yes

Contributions made by individuals after August 28 2005 through December 31 2005 are subject to 100% AGI limitation. Very timely for the Cheneys

[Gidney N Cloyd]

7. I wonder if he donated the 6 mil as challenge funds to

to gulf school districts to buy Neil Bush's software like Ma Bar-ker did.

[berni_mccoy]

8. He's still in trouble...

FROM THE IRS:

Temporary Suspension of
50% Limit
The 50% limit does not apply to your “qualified
contributions.” A qualified contribution is a charihere
table contribution paid in cash after August 27,
2005, and before January 1, 2006, to a 50% limit
organization (other than a section 509(a)(3) orlimited
ganization) if you make an election to have the
50% limit not apply to these contributions.
Your deduction for qualified contributions is
limited to your adjusted gross income minus
your deduction for all other charitable contribu-
tions. You can carry over any contributions you
are not able to deduct for 2005 because of this
limit. In 2006, treat the carryover of your unused
qualified contributions like a carryover of contri-
butions subject to the 50% limit.

Exception. You cannot make this election for
a contribution to establish a new, or maintain an conexisting,
segregated fund or account for which
you (or any person you appoint or designate)
has or expects to have advisory privileges with
respect to distributions or investments because
of being a donor.

ALSO: If these are stocks that are liquidated for donation, THEY ARE LIMITED TO A 30% OF AGI and there is no temporary suspension on this rule.

[onenote]

11. I kinda doubt it

I suspect this is a case where a little knowledge is a dangerous thing. I'm not a tax lawyer, but I know enough to realize that the tax code is complex and that someone like Cheney, who has earned and paid taxes at the megamillion level in previous years has the highest-priced tax advisors you can get. The error claimed in the OP is just too simple and obvious. While I await further analysis from someone who with greater knowledge, I think leaping the assumption that Cheney overdeducted is just setting yourself up to be proven wrong.

By the way, here's a copy of the Gift Administration Agreement for anyone who understands these things: http://www.factcheck.org/UploadedFiles/Cheney%20Gift%20Trust%20Agreement.pdf

[htuttle]

12. Wouldn't assume that -- Spiro Agnew made the same mistake

Lots of high priced tax advisors end up advising their clients to do illegal things. A case in point would be the illegal tax shelters set up by high-priced firm KPMG.

http://money.cnn.com/2005/09/09/news/fortune500/scandal_taxshelters/index.htm?section=money_latest

[onenote]

15. Agnew's situation was hardly the "same"

Agnew was charged with tax evasion arising out of a bribery scheme that he participated in while Governor of Maryland. Not at all the same as the issue of the extent to which publicly disclosed charitable contribution is deductible under the particular circumstances of an irrevocable Gift Administration Agreement. The agreement has been available for examination since 2001 and was even referenced in the news release describing Cheney's 2000 tax return.

The suggestion is that Cheney and his advisors simply ignored the limitations on the percentage of charitable contributions that can be deducted in one year. That limitation is so obvious, and violating it would be so obvious, that it simply foolish to jump to the assumption, given the complexities and vagaries of the tax code and how esoteric transactions involving gifted stock options might work, to assume that there has been any underpayment here.

onenote

[berni_mccoy]

16. I think there is one thing you are missing: Cheney and BushCo

Believe they are untouchable.

[onenote]

17. gee..why do they bother to pay anything then?

[berni_mccoy]

19. At 8% AGI he barely is paying anything...

I'm not a tax expert, but donating 77% of your income to charity and only paying the gov't 8% sounds a little fishy... it at least warrents an IRS RED FLAG.

I'd say that's grounds for an independent audit.

If everyone thought like you, there'd be no investigations of anything suspicious. If NOBODY calls them on it, and they've done something wrong...

And the fact is, according to the original article and his return, the donations are the results of CAPITAL GAINS from the liquidation of stock options... the law is very clear here: 30% of AGI and no temporary suspension of the rule either.

[berni_mccoy]

13. The tax law is pretty clear on this point...

But I agree that I would rather have it reviewed by AN INDEPENDENT CPA than just trust the Cheney's Tax Attorney's did it right... the guy is paying less than EIGHT PERCENT on his AGI... if that's not wrong for someone WHO MADE 8 MILLION, then I DON'T KNOW WHAT IS.

[Kansas Wyatt]

18. Yes, and there is a reason that the tax code has become so complex.

It is to shift the taxation burden to those, who can least afford it, get the least from the government, and least deserve to pay income taxes, especially on their labor.

They have been using the 'New Deal' the last few decades, as a way to laminate layers of regressive taxation on to the working class (lower & middle classes), while still making it appear like progressive taxation. Bait & Switch, and most of America hasn't caught on yet as Congress just sits there grinning.

All while giving the Wealthy Elite all of the benefits in the system and corporations obscene welfare, along with all of the free rides their Empires want.

[Maine-ah]

5. 6m in donations?

I want to know who the fuck he gave 6m to.

[onenote]

10. here's who the contributions went to:

George Washington University Medical Faculty Associates, Inc. for the benefit of the Cardiothoracic Institute, the University of Wyoming for the benefit of the University of Wyoming Foundation, and Capital Partners for Education for the benefit of low-income high school students in the Washington, D.C. area.

[TheLeftyMom]

20. Wow.

I'm speechless that he seems to have actually been a bit genuinely philanthropic.

[Flavin]

14. donations and limits

The rules for donation limits have changed a bit dependent to what your donations were for. The Tax code has been changed in relationship to donations for Katrina relief raising the limit bar well above the 50% limit. I'm not going to state what the limit is on these donations because I don't quite remember and don't want to disseminate bad info. my gut says it is 100% deductibility if it's Katrina donations but I might be wrong.

Flavin

[VolcanoJen]

21. Meanwhile...

... I saved $2.13 at the grocery yesterday, using my Kroger Plus Card.

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[Independent_Liberal]

22. Spiro Agnew!

That's the first name that popped into my head when I read this.