Tag Archives: irs

Steven Mnuchin Just Doesn’t Understand

by RenatoHanger Posted on January 20, 2017

Mother Jones

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This is adorable:

When Steven Mnuchin, Donald Trump’s pick for secretary of the Treasury, was asked about tax reform in his confirmation hearing on Wednesday, he took things in a surprising direction: He suggested that the IRS needed a larger staff.

“I was particularly surprised, looking at the IRS numbers, that the IRS headcount has gone down quite dramatically, almost 30 percent over the last number of years,” Mnuchin said in response to a question from Sen. Orrin Hatch, a Utah Republican….“Now perhaps the IRS just started with way too many people,” Mnuchin added. But he suggested that “staffing of the IRS is an important part of fixing the tax gap.”

That’s, um, surprising, all right. Yessir, Mr. Mnuchin. Very surprising indeed.

For those of you who don’t get the joke, this is sort of like Mnuchin testifying in front of a bunch of mafia dons and expressing surprise that they charge such high interest rates in their lending operation. Maybe with lower rates you gentlemen could expand into the suburban market and gain a share of the home equity business? Lotta kitchen remodels out there.

Basically, Mnuchin looked at the IRS numbers like a normal person and was surprised to see that they weren’t trying to maximize tax collections. He apparently didn’t realize that the Republicans he was testifying in front of have been very deliberately slashing the IRS budget for years precisely so they can’t maximize tax collections. The last thing Republicans want is an IRS that audits rich people more closely.

Mnuchin will learn. After all, Donald Trump did. Remember when Trump suggested that women who get abortions should be punished? He had no idea what he was talking about, and just assumed that since Republicans consider abortion bad, the maximal anti-abortion position must be good. He didn’t realize that jailing middle-class teenagers is a position unpopular enough to jeopardize GOP reelection prospects, and as a result Republicans have long insisted that even if they manage to make abortion illegal, they will always consider women who get abortions to be “victims” of unscrupulous butchers, not lawbreakers. That’s the party line, anyway, and everyone is expected to know it.

Before long, I’m sure Mnuchin will learn to listen respectfully to harangues about the gold standard and fiat money and ending the Fed. It’s a small price to pay for the opportunity to occupy the position once held by Alexander Hamilton.

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Steven Mnuchin Just Doesn’t Understand

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NYT: We’ve Figured Out How Trump Gamed the Tax System

by Rita7799phdn Posted on November 1, 2016

Mother Jones

A few weeks ago the New York Times got hold of the first page of Donald Trump’s 1995 tax return. It showed a net operating loss of $916 million, which Trump was able to use to offset his income over the next 20 years, thus avoiding millions of dollars in income taxes. But while solving one mystery, it opened another: Just exactly how did Trump manage to declare such a big loss? Several theories made the rounds, but the Times now thinks it has the answer, thanks to a cache of “newly obtained documents.” Here’s the nutshell version of the Times’ explanation:

Trump was a terrible businessman and lost a huge amount of money on his casino operations in the early 90s.
As part of his bankruptcy negotiations in 1991, he persuaded banks to forgive hundred of millions of dollars in loans.
Forgiven loans count as “Cancellation of Debt” income, which should have offset his huge operating losses. But somehow they didn’t. Why?
The Times says it was because Trump used a legally dubious “equity-for-debt” swap. Basically, he swapped the bonds he couldn’t pay for new bonds that he classified as equity shares in the casino partnership.

The Times makes a good case that Trump’s own tax lawyers told him this plan was extremely risky (see the excerpt from the official tax opinion on the right) and would most likely be disallowed by the IRS. But we don’t know if it was. The trail stops cold in 1995.

If I’m reading this right, the basic story is that Trump gave his banks “New Bonds” in place of their old bonds and classified the new bonds as equity shares in the casino partnership. Trump then valued the equity as equal to the old debt, thus showing no net loan forgiveness and therefore no COD income. This despite the fact that, in reality, the equity was close to worthless.

So Trump then had $916 million in operating losses, but no debt forgiveness to offset it. “Even in the opaque, rarefied world of gaming impenetrable tax regulations,” says the Times, “this particular maneuver was about as close as a company could get to waving a magic wand and making taxes disappear.”

At this point, the question of how Trump gamed the tax system is mostly a matter of academic interest. Still, I’ve written about this before, and figured I should follow up with the latest theory. And this is it.

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NYT: We’ve Figured Out How Trump Gamed the Tax System

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Here’s a List of the Information Trump Has Promised but Not Released

by SVPChandayrt Posted on October 15, 2016

Mother Jones

As the allegations of sexual assault piled up against Donald Trump this week, the Republican nominee promised that he would release a trove of exculpatory evidence “at the appropriate time.” On Friday morning, running mate Mike Pence said this other shoe would drop within “hours” and this information would disprove Trump’s accusers. By the end of the day, the only information that Trump produced was thin and bizarre.

The Trump campaign put forward a British man who claimed to have a “photographic memory” and who told the New York Post that he was on the flight with Trump and one of Trump’s accusers 30-plus years ago, that he remembered the entire incident, and that her story of being groped by Trump while sitting next to the mogul in the first class section was not true. The Brit claimed nothing had happened during the entire flight. (A Trump spokeswoman had previously claimed that Trump did not fly on commercial airlines during the 1980s, so this seemed to prove that Trump’s account was wrong.) The British fellow would have been about 18-years-old at the time and didn’t explain why he had been flying first-class. And two years ago, he generated British headlines by claiming that when he was 17 he procured young men for sex parties with British politicians. The Trump campaign also released a statement from the cousin of an accuser who had appeared on The Apprentice, and this man asserted that his cousin had for years not complained about Trump and had only raised these allegations after Trump recently declined an invitation to visit her restaurant.

None of this was the firm proof that Trump had promised. And this wasn’t the first time that Trump has vowed to release information and then failed to produce the goods. Here’s a quick guide:

Tax returns: At the height of his birther crusade in 2011, Trump offered a challenge to President Barack Obama: if the commander-in-chief released his long-form birth certificate, Trump would put out his tax returns. Obama did release a long-form birth certificate, after which point Trump told ABC that he would release his taxes “at the appropriate time.” That time never came.

Tax returns again: In January Trump said on Meet the Press that he would release his tax returns imminently. “We’re working on that now,” he said. “I have big returns, as you know, and I have everything all approved and very beautiful and we’ll be working that over in the next period of time.” But after a month passed and he still hadn’t produced his tax returns, Trump said at a Republican primary debate that he couldn’t release his tax returns because he was under audit. (The IRS has said that an audit would not prevent Trump from releasing the returns.) Running mate Mike Pence and top surrogate Ben Carson have both said Trump will release the returns at “the appropriate time.” Which brings us to…

Proof he’s being audited: Trump promised to release a letter proving that he was under audit. In March, in response to to repeated inquiries and promises to release documentation pertaining to the audit, Trump produced a letter from his lawyer (dated three weeks earlier) saying that his returns from 2009 until the present were under review by the IRS. But Trump’s lawyers are paid by Trump. He has not produced any correspondence from the IRS that would confirm an audit was under way.

List of creditors: When NBC News’ Lester Holt asked Trump at the first presidential debate why he had not released his tax returns, Trump made a counteroffer: he would release a list of his creditors instead. “I could give you a list of banks,” he said. “I would—if that would help you, I would give you a list of banks. These are very fine institutions, very fine banks. I could do that very quickly.” Three weeks later, though, Trump has still not released that list.

Secret information in Hawaii: In 2011 Trump claimed to have sent investigators to Hawaii to uncover the truth about Obama’s birth certificate, and he said he would release the results of their investigation “at a certain point in time.” No grand announcement ever came. “He’ll reveal it when the time is right,” Tana Goertz, the co-chair of Trump campaign’s in Iowa, told MSNBC last summer. “If they found something, it will come out. The time isn’t right, and guess what? Mr. Trump does what he wants and he’s not going to do it on our time. He’s going to do it when the timing is perfectly strategic and it’s not now and it wasn’t the place for him to say it.”

Melania’s immigration documents: Following reports that Melania Trump had (illegally) worked in the United States under a tourist visa in the 1990s, Trump vowed to hold a press conference featuring his wife to set the record straight. No press conference ever occurred. Weeks later, the Trump campaign released a statement from her lawyer, but it was accompanied by no corroborating documents.

Medical records: In September, as Trump was claiming that Hillary Clinton was in poor health, ABC’ News’ David Muir asked why he didn’t release his own medical records. “I might do that, I might do that,” Trump said. “In fact, now that you ask, I think I will do that. I’d love to give full reports.” Trump had previously released a one-page letter from his gastroenterologist that was widely dismissed by medical experts as odd and unprofessional, and he later revealed additional medical details (from the same doctor) on Dr. Oz’s television show. But Trump has yet to produce a full medical report.

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Here’s a List of the Information Trump Has Promised but Not Released

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A Silicon Valley Billionaire Just Challenged Donald Trump in the Best Way Possible

by WilliemDriscoll Posted on September 12, 2016

Mother Jones

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LinkedIn co-founder Reid Hoffman just made Donald Trump an offer that should entice the GOP nominee who claims to have donated millions to veterans: If Trump releases his tax returns by October 19, the date of the last presidential debate, Hoffman will donate up to $5 million to veteran groups.

The original idea came from a crowd-funding campaign started by Peter Kiernan, a veteran of the Marines who was once deployed to Afghanistan. Kiernan said he would donate to 10 veteran’s groups should Trump release his taxes and began raising money to do so on Crowdpac.com.

In a Medium post published on Monday afternoon, LinkedIn co-founder Hoffman expressed his support for Kiernan’s campaign, and upped the ante by promising to quintuple the final total raised by Kiernan, up to $5 million.

Kiernan explained his reasoning on the campaign’s site. “Any servicemember who has ever held a security clearance has been subjected to a rigorous background check, including personal finances, affiliations, and drug activity…To be the Commander-in-Chief of this group, you should be held to the same standards.”

In his post, Hoffman also noted both the tactic and the actual dollar amount should have special significance to the GOP nominee: In 2012, Trump offered Barack Obama $5 million to release his college transcripts, his passport applications, and other documents.

As BuzzFeed points out, Hoffman’s intentions might not just be about the 2016 election. He was an early investor in Crowdpac, the site hosting Kiernan’s crowd-funding campaign, so he potentially stands to benefit financially from raising the site’s profile.

In January, Trump skipped a Republican primary debate in Iowa and instead held a fundraiser for veterans during the same time slot. (He initially claimed to have donated $6 million from the event to veteran charities, but his campaign has significantly decreased that estimate following reports suggesting the initial figure was inflated.) But the nominee has also been adamant about keeping his tax returns from the public eye: Though he promised to release them in May, he has since reversed his position, saying he would withhold the records because he was being audited by the IRS. (The agency has said that’s not necessary.)

As Hoffman explains, the proposal “gives Trump a strong incentive to act but doesn’t reward him directly for something he should have already done. Instead, men and women to whom all Americans owe a great debt of gratitude will benefit from any positive action he takes.”

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A Silicon Valley Billionaire Just Challenged Donald Trump in the Best Way Possible

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Should We Allow Nonprofits to Endorse Candidates?

by TheodorBurrough Posted on July 22, 2016

Mother Jones

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I work for a 501(c)(3) nonprofit, so I’m keenly aware that I’m not allowed to endorse candidates. That mean y’all will just have to guess who I’m voting for in November. I apologize for having to keep you in such suspense.

Until recently, though, I had no idea why non-profits weren’t allowed to endorse candidates. Then I began hearing about the “Johnson Amendment” from Donald Trump. Obviously someone put a bug in his ear, and he’s been repeating it like a mantra for weeks now. So what’s this all about?

The “Johnson Amendment,” as the 1954 law is often called, is a U.S. tax code rule preventing tax-exempt organizations, such as churches and educational institutions, from endorsing political candidates. At the time, then-Senator Lyndon B. Johnson was running for re-election, and he and other members of Congress pushed the amendment to stop support for their political opponents’ campaigns, George Washington University law professor Robert Tuttle has explained. Many have also argued the amendment served to stop black churches from organizing to support the civil rights movement.

“All section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office,” the IRS explains of the rule on its website. “Violating this prohibition may result in denial or revocation of tax-exempt status and the imposition of certain excise taxes.”

There you go. So why has Trump suddenly decided this is a threat to democracy? You can probably guess: because conservative churches want to endorse Republican candidates and give them lots of money without losing their tax-exempt status. Jerry Falwell Jr. explains:

In recent years, religious liberty group the Alliance Defending Freedom has advocated for its repeal, arguing that the law is unconstitutional and lets the IRS “tell pastors what they can and cannot preach,” and “aims to censor your sermon.”…“This is something that could make a difference with Christian voters in the fall,” Falwell says. “It is almost as important for Christians as the appointment of Supreme Court justices.”

My first thought about this is that it would provide yet another avenue for big money in politics. I can imagine rich donors setting up, say, the Church of the Divine Supply Siders and then funneling millions of dollars in dark money through it. Fun!

On the other hand, in a world of Super PACs and Citizens United, why bother? They can already do this easily enough, just as churches can set up “action committees” that are legally separate and can endorse away.

I’d genuinely like to hear more about this. Within whatever framework of campaign finance law we happen to have, is there any special reason that nonprofits shouldn’t be able to endorse, organize, and spend money on behalf of a candidate? I have to admit that no really good reason comes to mind. Am I missing something?

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Should We Allow Nonprofits to Endorse Candidates?

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Where’s the Idealism?

by LouellaBenjamin Posted on May 19, 2016

Mother Jones

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It’s a funny thing: the usual take on Bernie Sanders supporters is that they’re a bunch of idealistic college kids who want a revolution. But whenever I write a post critical of Bernie, I sure don’t seem to get much criticism from the smart set. Here’s a random baker’s dozen tweets responding to my post from last night:

I know you can’t draw any conclusions from the cesspool of social media. And I’m not a woman, so I escape the worst of this stuff. Still, this is the kind of barely literate nitwittery that I get from the tea party types when I write about Benghazi or the IRS. Full of passion, for sure, but not a whole lot of idealism. Just rage and lame middle-school insults.

Would I get the same quality of stuff from Hillary supporters if I wrote something negative about her? In the past I haven’t, but my criticisms of Hillary have been more targeted. Plus she’s winning, and that makes it a lot easier to let criticism wash off your back.

I dunno. I suppose the lesson is not to draw any lessons from Twitter (though my inbox looked pretty similar this morning). But I’ll draw a lesson anyway: We’re no angrier than we’ve ever been, but social media sure does make it a lot easier to express our rage publicly. In the past all we could do was yell at the TV in the privacy of our own living rooms. All things considered, this probably isn’t such a positive change.

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Where’s the Idealism?

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The Pfizer-Allergan Merger Uses a Tax Trick That Lets US Companies Stash Billions Overseas

by BurtonStrehlow Posted on November 23, 2015

Mother Jones

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Earlier today, the pharmaceutical giants Pfizer and Allergan announced a merger worth $160 billion. There’s a wrinkle to this deal between the makers of Viagra and Botox: It’s being facilitated by a controversial tax trick known as an inversion, which lets American companies move their headquarters abroad, avoiding the IRS while keeping executives stateside. If it goes through, the Pfizer-Allergan agreement will be the largest tax inversion ever.

Hillary Clinton has already criticized the pharma deal and has called for “cracking down on inversions that erode our tax base.” In the past, President Barack Obama has slammed inversions as unpatriotic. His administration and congressional Democrats estimate that tax inversions will result in nearly $20 billion in lost taxes through 2024.

Inversions have been around since the early ’80s, when a tax lawyer masterminded a move known as the “Panama Scoot”. Since then, more than 100 companies have renounced their American citizenship. Here’s where they went:

And inversions are just one of many ways US companies stash earnings abroad. Between 2008 and 2013, American firms had more than $2.1 trillion in profits held overseas—that’s as much as $500 billion in unpaid taxes.

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The Pfizer-Allergan Merger Uses a Tax Trick That Lets US Companies Stash Billions Overseas

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Ted Cruz Is Not Going to Eliminate the IRS

by AlannahVKGC Posted on November 12, 2015

Mother Jones

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Ted Cruz wants to eliminate the Department of Commerce, the Department of Energy, the Department of Education, and HUD. Big deal. Even if he could do it, all it means is that all their functions would get divvied up among other departments. Wake me up when Cruz tells us what actual programs he’d eliminate.

But Cruz also thinks he can eliminate the IRS. Or, in any case, “the IRS as we know it.” Has anyone asked him just why he thinks this? His tax plan still has a 10 percent income tax. It has a standard deduction. It has a child tax credit. It has an EITC. It includes a charitable deduction. It includes a home mortgage deduction. And there’s a business VAT to replace the corporate income tax. So who’s going to oversee and collect and audit all this stuff? Tax fairies?

And while we’re at it, I’m still waiting to hear more about Carly Fiorina’s three-page tax code. Can’t we at least see a rough draft?

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Ted Cruz Is Not Going to Eliminate the IRS

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Head Witch Hunter Now Wants Fewer Witch Hunts

by ErwinX26bghrinc Posted on October 30, 2015

Mother Jones

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Today’s Charles Krauthammer column cracks me up:

Skip the investigations, win the election

I’m all for demonstrating malfeasance. But the GOP House has given a five-year display of its inability to successfully demonstrate anything…. Operation Fast and Furious….IRS….Planned Parenthood….Benghazi.

….In each of these cases, Republicans had the facts and the argument. And yet in every one, they failed. What makes them think that they will fare any better in the next iteration, the impeachment of a minor official in an expiring administration?

Krauthammer is a hardcore conservative, but he’s also a very high-IQ conservative. So this makes me wonder: does he really believe this? Or does he know it’s baloney but figures he needs some kind of acceptable cover to get Republicans off their Ahab-like zeal for investigating nothingburgers?

As I’m sure Krauthammer knows, the problem Republicans have with their mania for investigations is that what turned out to be scandalous wasn’t high-ranking, and what was high-ranking wasn’t scandalous. Fast & Furious was scandalous, but it was a local botch. The IRS was slightly scandalous, but never went beyond middle management. Planned Parenthood did nothing wrong at all. And Benghazi—well, that reached the very highest levels, but there’s just no scandal to be uncovered. There may have been some bad security decisions, but the evidence of malfeasance by anyone in the Obama administration is all but nonexistent.

Anyway, it probably doesn’t matter. All through the Clinton administration and now the Obama administration, Republicans have been fixated on uncovering the scandals they just know have to be out there. But the plain truth is that Obama has run perhaps the cleanest administration in modern history. It’s actually sort of remarkable. There’s plenty of stuff you can legitimately disagree about with him, but there’s been virtually no scandal of the conventional sort.

Either way, though, Krauthammer is probably right. The latest obsession in the House is to impeach the head of the IRS. It’s idiotic because he did nothing wrong, and it’s doubly idiotic because it would never pass in the Senate. It devalues the whole notion of impeachment and makes Republicans look like crackpots.

Then again, PPP recently polled Republicans in North Carolina, and 66 percent supported the idea of impeaching Hillary Clinton “the day she takes office.” This is the conservative movement people like Krauthammer have built. It can hardly come as a surprise to him that their primary mode of governance now consists mostly of an endless quest for malevolent phantoms that Krauthammer and his buddies have been assuring them all along are out there.

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Head Witch Hunter Now Wants Fewer Witch Hunts

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IRS Turns Out to Be Big Bureaucracy, Not Terrorist Organization

by SimonStreeten Posted on October 24, 2015

Mother Jones

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Let’s check in on the latest in Obama administration tyranny and lawlessness. Hum de hum — oh, hey, look what’s buried on page A12 of my LA Times this morning. The Justice Department has finished its investigation into Lois Lerner and her reign of terror at the IRS against hardworking conservative activist groups:

Assistant Atty. Gen. Peter J. Kadzik, who is in charge of congressional relations, told House Judiciary Committee Chairman Bob Goodlatte (R-Va.) that “we are closing our investigation and will not seek any criminal charges.”

….“Not a single IRS employee reported any allegation, concern or suspicion that the handling of tax-exempt applications — or any other IRS function — was motivated by political bias, discriminatory intent, or corruption,” Kadzik said.

He said Justice had specifically absolved Lerner, who resigned over the allegations, of criminal liability, and found in fact that she was the first official to recognize the problem and to try and correct it.

Kadzik said that their investigation found evidence of mismanagement and institutional inertia, “But poor management is not a crime.” I guess that’s what they call this kind of organized oppression in Obama’s America.

Anyway, I urge everyone to consider this outcome when thinking about Hillary Clinton’s email server. Both are “scandals” pushed relentlessly by a right wing that’s infuriated over everything related to the Obama administration. Both had some surface plausibility. And both were kind of sexy.

But as usual with these kinds of things—Solyndra, Fast & Furious, Benghazi, Sharyl Attkisson’s computer, etc. etc.—there’s really nothing there. Sometimes some bad judgment, sometimes not even that. The fact that Republicans are outraged and have large megaphones to spread that outrage doesn’t change this and doesn’t justify 24/7 news coverage. So maybe a more temperate approach to these endlessly manufactured right-wing outrages would be appropriate. Just a thought.

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IRS Turns Out to Be Big Bureaucracy, Not Terrorist Organization

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