Through declaring tens of millions of dollars in losses, he often has no tax liability and thus has little or no tax bill with the IRS. We know this from examining his tax returns that Trump released unwillingly late last year. Trump has naturally called the hubbub surrounding his tax history a witch hunt.
He doesn’t think avoiding taxes is criminal but rather a smart gambit that legally follows the tax code the way it is written.
These are just smart business practices, according to Trump.
The Dominoes Are Starting to Fall
But he has something else hanging over his head. One of his loyal honchos is in jail for tax fraud. The chief financial officer for the Trump Organization is wrapping up a stay at Rikers Island in New York after pleading guilty to a whopping 15 felonies for various transgressions related to taxation practices.
Five Months for Donald Trump Financial Executive
Trump financial fixer Allen Weisselberg is serving five months for his crimes. These include giving non-taxable “bonuses and perks” that allowed the Trump Organization to illegally save funds. This went on for 15 years. So instead of the Trump Organization paying taxes legitimately on executive compensation, Weisselberg saw to it that Trump employees instead received school tuition, luxury cars, and apartment rent. The Trump Organization itself was fined $1.6 million for the tax avoidance scheme.
Another Witch Hunt, Trump Says
Trump took to Truth Social to air the latest grievance against what happened with Weisselberg. “I can’t get over the fact that a casualty of the greatest Witch Hunt of all time, Allen Weisselberg, my long time employee and chief financial officer, is sitting in a prison cell in Rikers Island for a type of case that has never been brought before in the history of our Country,” Trump wrote.
CFO Takes the Fall
Trump doesn’t think paying employees with non-monetary compensation is wrong and Weisselberg shouldn’t be blamed for what he is accused of doing and what he pleaded to. The former CFO has to pay $2 million in fines and back taxes. He pleaded guilty to “grand larceny tax fraud and falsifying business records.” Weisselberg also arranged for other executives to be paid as contractors which meant that the Trump Organization did not have to pay payroll taxes associated with traditional full time employment.
Donald Trump May Not Be Out of the Woods on This One
Trump himself wasn’t charged even though Weisselberg said the former president knowingly signed the checks during the scheme. Manhattan District Attorney Alvin Bragg stated Trump is still under investigation for the practices.
Can’t He Just Pay His Fair Share?
You’ll never get Trump to admit wrongdoing in this case or others relating to his taxes. He believes he is being unfairly targeted for doing what other firms and executives do, write off revenue losses to reduce his tax liability to minimize what he owes the IRS. But detractors point out that Trump likely illegally inflated and falsified those losses to enable the real estate developer to avoid the correct amount of taxation.
It remains to be seen if other executives who were privy to additional alleged tax avoidance practices will “flip” and testify against Trump in what might be a longer investigation into the Trump Organization. Where there is smoke there is fire, will be the mantra of those who are prying into Trump’s tax returns. Trump believes once again that he is being unfairly targeted for political reasons and that he is the victim of hoaxes and government prosecutorial overreach.
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The court of public opinion may be confused because of the high number of legal maladies that have been roped around Trump’s neck. He hopes that his supporters and those he thinks will vote against President Joe Biden will ignore the latest tax entanglement.
Author Expertise and Experience: Serving as 19FortyFive’s Defense and National Security Editor, Dr. Brent M. Eastwood is the author of Humans, Machines, and Data: Future Trends in Warfare. He is an Emerging Threats expert and former U.S. Army Infantry officer. You can follow him on Twitter @BMEastwood. He holds a Ph.D. in Political Science and Foreign Policy/ International Relations.