Showing posts with label Taxes/IRS. Show all posts
Showing posts with label Taxes/IRS. Show all posts

September 22, 2016

The Gig is Up for The Trump Foundation





 Trump with Bundi, the person who declined an investigation to the Trump University Complaints the day after getting  a donation from the trump Foundation which also brooke the law since Tax exempts cannot give to money to politicians

The Trump Foundation is a charity and its money is only supposed to be used for charitable purposes, but The Washington Post argues that Trump actually used his foundation’s money to pay off business fines.

According to the Post, two of Trump’s businesses, a club in Florida and a golf course in New York, got into legal trouble. As part of the settlement of those legal issues, Trump agreed to make a donations to charity. That money was supposed to come from his businesses, but, instead, he took money out of his charity’s account and used that to pay off his business’s obligations. What makes this story even more disturbing is the fact that the majority of the Trump Foundation’s money comes from people other than Trump.

The incident in Florida is particularly hypocritical considering the real estate developer’s supposed support for veterans. His club put up a flag pole that was much taller than the city’s code allowed. Rather than take it down, Trump decided to fight the city. He eventually lost and incurred $120,000 in fines. The city agreed to drop the fines if his club would make a $100,000 donation to a particular veteran’s charity. Instead of using his club’s money, though, he took that money out of his charity’s account.

David Fahrenthold, the author of the article, argues that this was illegal. He alleges that it was a violation of the “self-dealing” rule which states that, if you are the head of a charitable organization, you cannot take money from the charity’s account and use to to buy things for yourself or to help your for-profit businesses.

If Fahrenthold is correct, then Trump could be facing legal trouble. He would likely be required to reimburse his foundation and would likely have to pay penalties for filing a false IRS return. It’s possible that his foundation could even lose its non-profit status.

It should be noted that the Trump Foundation is currently under investigation by New York’s Attorney General. Since the organization is headquartered in New York, it’s likely that the investigation will examine the Florida case. There’s no estimate on when the investigation will be completed or if it will be before the election.


July 2, 2016

Trump Could Be in Trouble with IRS over $12k Tebow Gear




                                                                          
Donald Trump posed with the helmet he won at a live auction 
at a charity fundraiser in Palm Beach, Fla. in 2012. (Capehart Photography)




Donald Trump, the presumptive Republican nominee, has many tremendous friends. Tom Brady of the Patriots is a tremendous friend. And maybe Tim Tebow is a tremendous friend too, because The Donald spent, according to the Washington Post, $12,000 of his foundation’s money on a Tebow Broncos helmet and jersey several years ago.

The original story actually comes from the Palm Beach Daily News, which wrote about a Susan B. Komen charity auction back in 2012.

During the first dinner course — the club's trademark lump crabmeat timbale -- Tom Quick conducted the live auction, which included the surprise additions of four tickets for Celine Dion's upcoming concert at The Mar-a-Lago Club, donated by Donald Trump, and an autographed Tim Tebow helmet, which sold to Donald Trump for $12,000 at the very moment that Tebow was having his halo hammered by Tom Brady.

The Donald giveth, and The Donald payeth. Blessed be the name of The Donald.
Indeed. Twelve large for a Tebow helmet ain’t nothing to sneeze at, even during the height of Tebow's powers -- this was in late January 2012, shortly after Tebow and the Broncos stunned the Steelers with a walk-off touchdown pass to Demaryius Thomas.

But as noted, it was also during the 45-10 drubbing the Patriots put on the Broncos the next week.

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Fast forward to today and the Washington Post digging through Trump's charitable giving history. What the newspaper found was Trump paid the Komen through another non-profit organization, the Donald J. Trump Foundation. Which, depending on what Trump did with the helmet and jersey, could be considered an IRS violation.

Afterward, three experts on tax law questioned whether Trump had violated IRS rules against “self-dealing" -- which are designed to keep nonprofit officials from using their charities to help themselves.

Those rules ban the "furnishing of goods" by private foundations -- like Trump's -- to their own officers. If the rule is broken, the person who breaks it must notify the IRS and may have to pay a tax penalty. There could also be penalties for signing a tax return that failed to mention the violation. In 2012, the tax return for Trump’s foundation checked the boxes for "no," it did not break the self-dealing rule.

The Trump camp did not provide a comment to the Washington Post concerning the whereabouts of the helmet and jersey.

According to the Post's experts, simply giving them away to another charity would meet any qualifications needed in order to make this point null and void.
It would also be a net loss regardless: Tebow Broncos gear is pretty much worthless at this point, even if it’s autographed. [What an eye for deals! that depreciate]

The idea of jumping down someone's throat over getting burnt on a $12,000 purchase of a helmet and jersey (now valued at less than $500) is pretty crazy. Such is life in the spotlight for presidential candidates.

February 17, 2016

IRS Grants Welfare Tx Exempt to Karl Rove’s Dark Political Machine



                                                                     

In a farcical abuse of common sense and the American taxpayer, the Internal Revenue Service has granted Crossroads GPS, the dark-money machine of Karl Rove, the Republicans’ guru of attack politics, status as a tax-exempt “social welfare” organization. This means it can keep its deep-pocketed campaign donors secret. The ludicrous I.R.S. finding that the group is not primarily what it so obviously is — a strident G.O.P. operation that should be required to name its donors — is essentially a license for it to run amok in the current federal election cycle with anonymous, unlimited donations.

The ruling, quietly made in November and brought to light this week by the Center for Responsive Politics, signals a shameful retreat by the I.R.S. from enforcing regulations intended to prevent abuses of the nonprofit tax law by campaign operatives. The agency had come under attack from Tea Party and other right-wing groups for questioning their claims to be “social welfare” exemptions, and the Rove ruling is the latest result. It can only invite more partisan operatives to pretend to have society’s nonpolitical interests at heart as they fill campaign troughs with money from hidden donors.

Since pioneering this fiction, Mr. Rove has proved to be no Mother Teresa of a social welfare advocate, as he strategizes obsessively for Republican hegemony. His group has spent $330 million on election ads and candidate support since it was created in 2010, after the Supreme Court freed corporations and unions from political spending limits, according to the center’s watchdog blog, Open Secrets. The dodge has become bipartisan, with President Obama’s re-election helped by the Democrats’ Priorities USA Action operation as a “social welfare” organization under section 501©(4) of the tax code. 

When he first ran, Mr. Obama promised to fight for reform of big-money politics, but he failed to follow through. Similar vows are being heard from the candidates for the Democratic nomination this year. Senator Bernie Sanders so far has been riding a wave of small donations, while Hillary Clinton, aided by “super PACs” and small donors, is promising to rein in the special-interest money driving the current campaign. Republican candidates would rather talk about walling off Mexico and ending Obamacare, even as they profit from operations like Mr. Rove’s.

The public’s voice is sorely needed on an issue that is at the very heart of concern over an affluent minority’s growing power in American politics. Trying to portray sheer check-writing power as a “social welfare” benefit insults honest taxpayers. “Operating for the benefit of one particular candidate or party, it’s hard to say that’s not private benefit,” Marcus Owens, the former I.R.S. director of exempt organizations, told ProPublica in reacting to the agency’s misguided blessing of the Rove machine.

New York Times

October 22, 2015

Internal Revenue is Recognizing Same Sex Marriage No Matter the Origins



                                                                    
                                                                 I   R   S

The IRS is making it official: The tax agency says it will now recognize same-sex marriages regardless of where they were performed.

The IRS and the Treasury Department also said they will interpret the terms "husband" and "wife" to apply to same-sex spouses as well as opposite-sex spouses.

The IRS proposed the regulations Wednesday to implement the Supreme Court's decision in June legalizing same-sex marriages in every state.

The Supreme Court ruled 5-4 that the Constitution provides a right to same-sex marriage. Before the ruling, there were 13 states that did not recognize same-sex marriages. Since the ruling, agencies across the federal government have been updating their regulations to reflect the change.

Treasury Secretary Jacob Lew said the regulations would ensure "that all are treated equally under the law."

"These regulations provide additional clarity on how the federal government will treat same-sex couples for tax purposes in light of the Supreme Court's historic decision on same-sex marriage," Lew said.

The IRS has recognized same-sex marriages for tax purposes since 2013, as long as the marriages were performed in states where same-sex marriage was legal. Same-sex marriages are now legal in every state.

The IRS said the regulations would apply to all federal tax provisions in which marriage is a factor, including filing status, exemptions, the standard deduction and employee benefits. The proposed regulations would not apply to domestic partnerships, civil unions or similar relationships, the IRS said.

Taxes are a decidedly mixed bag when it comes to marriage. Married couples generally must file their federal income tax returns using either the "married filing jointly" or "married filing separately" filing status. Some couples are able to lower their tax bills by getting married, while others pay a marriage penalty.
Some of the biggest tax savings go to couples in which one spouse relies on the other for employer-provided health insurance. By law, employer-provided health insurance is tax-free for the vast majority of workers, married spouses and dependent children. But if a worker's unmarried partner is covered, those benefits, which can be worth thousands of dollars a year, are taxed.

Some wealthy same-sex couples could do well, too, if one spouse inherits a lot of money from the other. That was the central issue in the 2013 Supreme Court case that struck down the federal Defense of Marriage Act, or DOMA.

In the 2013 case, Edith Windsor of New York sued to challenge a $363,000 federal estate tax bill after her partner of 44 years died in 2009. Under federal law, married couples can inherit unlimited amounts of money from their spouses, tax-free.

August 30, 2013

IRS New Rules for Gay Couples Allows to File Jointly


The government on Thursday said that all legally married gay couples will be able to file joint federal tax returns even if they reside in states that do not recognize same-sex marriages.
The decision came in rules issued by the Treasury Department and the Internal Revenue Service designed to implement the tax aspects of the Supreme Court's decision in June that invalidated a section of the 1996 Defense of Marriage Act.
"Today's ruling provides certainty and clear, coherent tax filing guidance for all legally married same-sex couples nationwide," Treasury Secretary Jacob Lew said in a statement.
"This ruling assures legally married same-sex couples that they can move freely throughout the country knowing that their federal filing status will not change," Lew said.
Chad Griffin, president of the Human Rights Campaign, the nation's largest gay rights group, praised the government's action.
"With today's ruling, committed and loving gay and lesbian married couples will now be treated equally under our nation's federal tax laws, regardless of what state they call home," Griffin said in a statement.
The Treasury said that with the new rules, same-sex couples will be treated as married for all federal tax purposes including income and gift and estate taxes.
The rules will cover all federal tax provisions where marriage is a factor including the taxpayer's filing status, personal and dependent exemptions and standard deductions.
The new rules will cover any same-sex marriage legally entered into in any state where such a marriage is recognized. It will also cover such marriages recognized by U.S. territories, foreign nations and the District of Columbia.
The government said that the statute of limitations for filing a refund claim was generally three years from the date the return was filed or two years from the date the tax was paid, whichever was later. As a result, the government said that refund claims can still be filed for tax years 2010, 2011 and 2012.

The new IRS and Treasury regulations follow rules changes and guidance that have already been issued by other federal agencies including the office of Personnel Management and the departments of Defense and Health and Human Services.
The Supreme Court ruling came in a case filed by Edie Windsor, a resident of New York, who was forced to pay federal estate taxes after the death of Thea Spyer, her lesbian spouse.  

May 17, 2013

Gays Used to Be The Evil Ones and The IRS Burnt Us Under The GOP


Before there was the Tea Party, there was Big Mama Rag, Inc.
It was a radical feminist collective in the 1970s, and it devoted itself to lectures, seminars, a free library, and publishing a newspaper to voice its ideas, namely the Big Mama Rag. The group applied for nonprofit status from the IRS, and was initially refused for, among other reasons, “the articles, lectures, editorials, etc. promoting lesbianism.”
It wasn’t the end of the IRS taking a discriminatory tone toward nonprofit groups that dealt with homosexuality, however.  In 1996, the Gay and Lesbian Adolescent Support System, a group devoted to helping young people deal with harassment and prejudice due to their sexuality, applied for tax exempt status. In response, an IRS official wrote that the group could be viewed as “tending to encourage or facilitate homosexual practice and propensities by the young and impressionable,” and asked the group to “describe in detail the procedures and safeguards in place to assure that counselors and participants do not encourage or facilitate homosexual practices or encourage the development of homosexual attitudes and propensities by minor individuals attending your programs.”
Which brings us to the IRS scandal of the moment, in which tax officials screened applications for status as a social welfare organization based on whether they included “Tea Party” or “Patriots” in their name.
The Inspector General’s report on the Tea Party scandal paints a picture of mid-level IRS employees being extraordinarily insensitive to the fact that their method of screening applications to form a “social welfare organization” for possible excessive political involvement was by definition rigged against the conservative groups that exploded in number in the early years of the Obama administration. Even after being told to stop using politically tilted methods of screening the groups for review in 2011, the Cincinnati IRS office charged with reviewing the applications reversed course in early 2012 and went back to screening based on the group’s name.
There are two big similarities with the IRS’s struggles over groups dealing with homosexuality in decades’ past. 
The most clear-cut similarity is that when legal standards around nonprofit groups’ tax treatment is vague, it leaves far too much power in the hands of tax collection bureaucrats.  In a 1980 ruling on the Big Mama Rag case, the U.S. Court of Appeals found against the IRS, writing that “applications for tax exemption must be evaluated . ..   on the basis of criteria capable of neutral application. The standards may not be so imprecise that they afford latitude to individual IRS officials to pass judgment on the content and quality of an applicant’s views and goals and therefore to discriminate against those engaged in protected First Amendment activities.”
Sounds about right. But now, 23 years later, IRS officials have done it again.  The Big Mama Rag case was about 501(c)3 tax status, the Tea Party scandal is about 501(c)4 social welfare organizations, but the original sin is the same: The standards for deciding whether a 501(c)4 is engaging in excessive political activity are impossibly vague, which inevitably assigns too much latitude to IRS staff to use their instincts and judgment.  They are allowed to engage in political activity, but not as a “primary” activity. Which means the IRS has to decide what counts as political activity, and what counts as primary. As Brad Plumer notes here, the IRS itself calls this a “facts and circumstances” decision, which a whole range of factors are to be weighed against each other. “Politics is not an exact science,” the IRS’s own guidelines say, understating things.
But here’s a second similarity with the anti-gay IRS cases of the past, though this one is harder to prove. When standards are vague, it leaves too much room for IRS agents’ decisions to be colored by their own instincts. They’re human beings, after all.
It’s easy to believe that the IRS officials involved in crafting the comments quoted above in the tax treatment of groups dealing with gays were, on some basic level, a little skeeved out by gay people. This may have colored their skepticism of nonprofit tax treatment of Big Mama Rag and GLASS.
It’s similarly easy to believe that the same applied in the Tea Party situation today. If you’ve spent your life as a tax collector, you’re naturally going to be a little unsettled by a surge in anti-tax activism. And you thus are going to be less attuned to the possibility that you are screening cases in a way that puts an ideological bias into the tax code.
In the investigations and self-examination that will follow the Tea Party case, lawmakers and the IRS need to carve out some time to think about this core issue: How can the rules around political activism by social welfare groups be crafted to make for more specific, quantifiable measures of where the line is, rather than giving so much leeway to the IRS bureaucrats? For example, a 501(c)4 might be allowed to spend 25 percent of its funds on political activity, defined as activity reportable to federal and state electoral conditions. There would still be plenty of disputes over what exactly should count as political activity, but at least there would be a common frame of reference to determine where the lines are.
For the last word, here’s what Jeffrey L. Yablon had to say in 1998. He is a tax lawyer who wrote the article for the “Journal of Taxation of Exempt Organizations” from which the descriptions of the IRS’s issues around gay-focused nonprofits in this piece are derived.
“There is no hint of a cease-fire being called anytime soon in the cultural wars that are being fought on the American political landscape,” wrote Yablon, who is now a partner at law firm Pillsbury Winthrop. “Not surprisingly, some of the combatants believe strongly and complain bitterly that the IRS has become a partisan for the other side. The only solution is to remove the IRS from the battlefield. The current vague and subjective rules must be replaced with a set of bright line’ tests that require little factual analysis and legal interpretation. The war will go on, of course, but there will be less chance of respect for tax laws becoming a casualty.”
Fifteen years later, it is still so.
 The Washington Post was the source for this article

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