It
is perhaps well to remember that whilst the cronyism,
venality
and often
industrial scale corruption
of national governments is well known in
history,
here in Australia we appear to hold the quaint notion that as a
democracy we will not
be
led by the likes of a
Pahlavi,
Marcos or Putin.
Men
who sought not
only authoritarian
power but also to enrich themselves
from
the public purse and their nation’s resources.
But
does the
example of the former Morrison Government and what
is happening in the U.S. right now not make one wonder if we here
in Australia need
to clearly
define
limits
to the powers held by
a prime minister and, perhaps also require all members of any
federal Cabinet or outer ministry to present their tax returns to
the Parliament for
formal audit every year they are in government?
For
that matter, perhaps it is well past time that members of a federal
government are denied
access to
taxpayer
funds to defray court ordered financial penalties & legal costs in relation to
defamation or sexual harassment proceedings.
Both
Morrison & Trump ignored democratic principles and processes
whenever they chose, with Trump’s action being perhaps the more
egregious.
However, one
has to wonder if profiteering from public office was something both
national governments did – if
not to the same scale at least with the same frequency.
In
Australia we will never know because we have such weak mechanisms to monitor or prevent such things. The Parliament often being reluctant to police members' specific pecuniary interests, the Constitution not shutting the door firmly
enough on profiting from the Crown and the
Register
of Members’ Interests
being nothing more than
a risible fig leaf covering suspected dodgy trusts and self-managed super funds.
Consider
former U.S. president Donald Trump’s financial affairs and ask
yourselves: Could some of the prime ministers and/or ministers in
office between September 2013 and May 2022 have conducted their own
financial
affairs in a similar manner?
To
call the business structure
that Donald
John
Trump
built – carried with him into the White House and
back out again -
‘Byzantine’ is being kind.
It
appears to be a maze of est.
500
inter-related
companies, subsidiaries, partnerships,
trusts,
overseas
bank accounts
and possibly
shells,
potentially
designed
to literally push financial
bullshite
uphill until a business
income
loss or tax credit could be established on paper for
personal benefit.
During
his first presidential election campaign in
2016 Trump
self-reported
net wealth of almost
US$10 billion with debts of at least US$265 million
– thought at the time to be achieved
by an
exaggeration of property and
brand values
and that his net
wealth would be closer to est.
US$4.1
billion.
There were calls to show his tax return. He promised
to reveal his tax returns
but didn’t.
As
president he continued to falsely complained that his tax affairs were under
almost continuous Internal
Revenue Service (IRS)
audit so it was impossible for him to release them.
Once
the nation voted him out of office Trump went to the U.S.
Supreme
Court
in an attempt to stop the release of his tax returns for the years
2015
through to 2020.
A
legal battle he lost in TRUMP,
DONALD J., ET AL. V. COMM. ON WAYS AND MEANS, ET AL
on
22 November 2022.
He
was so successful
in his resistance up
until then that
only one incomplete mandatory
IRS audit
occurred during
his presidency - being ordered in September 2019 for the tax year
2016, but never completed and
appears to have been quietly abandoned.
Trump
appointee as IRS Commissioner, Charles P. Rettig, reportedly
excused the then president from the mandatory auditing process sometime during his tenure as commissioner.
On
16 June 2021 the U.S.
Congress House Committee of
Ways
and Means
wrote
to the Treasury
Secretary
seeking
details of the
required annual mandatory audits of Trump’s personal tax returns
during his presidency, unaware of the true state of affairs.
This
letter requested
all audit materials
from 2015
to 2020
with particular reference to:
whether
an IRS examination of the returns took place and the present status
of the audits, the applicable statutes of limitations, and the issues
considered:
1.
The Federal income tax returns of Donald J. Trump (Form 1040),
2.
The Federal income tax returns of the Donald J. Trump Revocable
Trust,
3.
The Federal income tax returns of DJT Holdings LLC (Form 1065),
4.
The Federal income tax returns of DJT Holdings Managing Member LLC
(Form 1120-S),
5.
The Federal income tax returns of DTTM Operations LLC (Form 1065),
6.
The Federal income tax returns of DTTM Operations Managing Member
Corp (Form 1120-S),
7.
The Federal income tax returns of LFB Acquisitions Corp (Form
1120-S),
8.
The Federal income tax returns of LFB Acquisition LLC (Form 1065),
and
9.
The Federal income tax returns of Lamington Farm Club, LLC d/b/a
Trump National Golf Club-Bedminster (Form 1120-S).
Trump’s
personal tax returns were joint filings with his wife Melania and
listed
one son as a dependent. He stated his main source of income was
derived
from “Management
Services”,
“Aviation”,
“Speaking
Engagements”,
“Real
Estate”,
“Golf”,
“Ice
Skating Rink”,
and
“Restaurant”.
For
a man who repeatedly
bragged about his business acumen and wealth in the billions, his
2015
personal
and business tax
returns
indicated
that he carried forward business loses of US$105.15
million
and
he
and his wife declared
a 2015 calendar
year joint
negative
income of $31.7 million leaving a nominal tax bill of $0.
So
by
2015 either
he was fast approaching the need for yet
another
strategic corporate
bankruptcy
or he had applied
the most ‘creative’ accountancy when dealing with the U.S. IRS
for that year and the following five years.
Either
way, once in the Oval Office Trump appears to have continued
to follow his own unique tax return template so
that by 2020 he was still paying low tax or no tax – apparently due in part to sizeable business income losses at
two of the nine
entities
whose tax returns were requested by the House Committee on Ways
and Means – DJT
Holdings Managing Member LLC and
DTTM
Operations LLC.
It is interesting to note that 2020 was also
a
year devoid of charitable donations by Mr. & Ms. Trump and,
it seems that there is some suspicion that previous
charitable
donation figures may be largely unsupported by appropriate
documentation.
Page 2 of the House Committee on Ways and Means Final Report spells out some specific accounting concerns:
•
Charitable
contributions—whether the 2015 conservation easement deduction of
$21 million
and other large donations reported on the Schedule A were supported
by required substantiation.
•
Verification
of Net Operating Loss Carryover Schedule—whether the amount of net
operating loss carryover in 2015 of $105,157,825 and future years was
proper.
•
Unreimbursed
partnership/S corporation expenses—whether the terms of the
partnership agreements supported unreimbursed expense deductions
totaling $27 million over six years.
•
Related
party loans—whether loans made to the former President’s children
are loans or disguised gifts that could trigger gift tax.
•
Cost
of goods sold deductions by DJT Holdings—whether these deductions
of about $126.5 million over five years is appropriate when it is not
clear what DJT Holdings is selling from the face of the return.
•
LFB
Acquisition LLC—whether there is any support for changes in the
management fees and general and administrative expenses of LFB
Acquisition that were significantly
higher in 2017 ($1.9 million and $2.8 million, respectively) than
2016 ($750,000 and $549,000, respectively) and 2018 ($707,000 and
$570,000, respectively).
In
fact when it comes to actually paying personal income tax Donald and
Melania Trump paid
US$641,951 tax
in 2015,
$US$750
in 2016,
$US$750 in
2017,
US$999,466
in 2018,
US$133,445 in
2019 and
US$0 in
2020, claiming
a refund of US$5,468,593.
Then
there is the matter of the two shell companies set up by Trump’s
then personal attorney Michael Cohen in 2016, Resolution
Consultants LLC
and Essential
Consultants LLC.
The former
allegedly
created
for the US$120,000 purchase
and then suppression
of
a
story
by
former Playboy Playmate Karen McDougal about her involvement with
Trump and
the latter created to pay US$130,000 to former adult-film star
Stephanie Clifford, professionally known as Stormy Daniels.
A Delaware state judge ordered the dissolution of Essential Consultants LLC and
Resolution Consultants LLC in October 2020.
It
has been reported that Trump had
claimed the
second personal expense of $130,000 as a business expense though
whether he did that in his 2016 tax returns or later I have been
unable to ascertain.
It
is noted that,
in the
three years from 2017 to 2019 Trump donated the
annual US$400 million presidential salary “solely
for public purposes”
in order to get a back
a
combined
total
of
US$1,200
million as
a deduction
on his tax bills,
according
to The
Washington Post.
As
for an overview of Trump’s business practices…..
To
quote Page 5 of the House Committee on Ways and Means’ 20 December
2022 Final
Report:
Numerous
investigative reports have revealed that the former President,
through the complex arrangements of his personal and business
finances, has engaged in aggressive tax strategies and decades-long
tax avoidance schemes, including taking a questionable $916 million
deduction, using a grantor trust to control assets, manipulating tax
code provisions pertaining to real estate taxes, and extensively
using pass-through entities. Media reports have also revealed that he
benefited from massive conservation easements, and that certain of
his golf courses failed to properly account for wages paid to
employees, raising questions about compliance with payroll and Social
Security tax laws. As President, he took pride in “brilliantly”
maneuvering the tax laws to his personal benefit. Even as he was
championing the Tax Cuts and Jobs Act of 2017, the former President
referred to the tax code as “riddled with loopholes” for “special
interests—including myself.”
BACKGROUND
The
House Committee
on Ways
and Means “REPORT
ON THE INTERNAL REVENUE SERVICE'S MANDATORY AUDIT PROGRAM UNDER THE
PRIOR ADMINISTRATION (2017-2020”
Final
Report
of
20
December 2022 can
be found at:
https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/2022.12.20%20Final%20Report%20House%20Ways%20and%20Means.pdf
On
30 December 2022 the House Committee on Ways and Means released a zip
file containing
all Donald John Trump’s personal & business tax returns via
Attachment
E.
Links
to the full range of documents the Committee has released can be
found at the bottom of this document at:
https://waysandmeans.house.gov/media-center/press-releases/ways-and-means-committee-votes-release-investigation-irs-s-mandatory
