16 ms·

Reminder; tax avoidance != tax fraud.

by kache_ 6y ago

microcolonel 6y ago
I honestly don't understand why “tax avoidance” is meant to sound so naughty. Almost everyone avoids taxes, almost every time they might be subject to a tax; some people are just better at it. When you fail to collect taxes from somebody who is following the law, that is a matter for your tax code, not a moral failing of the filer.
- yokaze 6y ago
  Quite a different thing though if you are head of government which is supposed to collect taxes from people like you, and you see no need to change that.
  - microcolonel 6y ago
    > Quite a different thing though if you are head of government which is supposed to collect taxes from people like you, and you see no need to change that. His predecessors/competitors talk a big game, but they were in office for eight years; take a lucky guess whether it got easier or harder, under the Obama-Biden administration, for people in Donald Trump's business to deduct and reclassify almost all of their taxable transfers and incomes. If there's an improper or unjustifiable deduction in these filings, then complain about that. Nobody has any obligation, and essentially nobody has any private reason, to pay taxes that they do not owe. If you think they should owe taxes, then complain that they don't owe them, not that they won't pay what they don't owe.
    - eli_gottlieb 6y ago
      As I recall, the Republican Congress actually cut funding to the IRS for tax enforcement during Obama's second term, so we actually don't know who's committing tax fraud. The audits just aren't being done.
- _jahh 6y ago
  no the tax system is set up to enable more avoidance the greater the sum.
- maxlybbert 6y ago
  Judge Learned Hand (not the Supreme Court, but often quoted; I'm sure partly for the name): "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes" (Gregory v. Helvering, 1934) "Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions" (Commissioner v. Newman, 1947). People can lower their taxes by buying alternative fuel vehicles, renovating historic properties, donating to charities, etc. Those laws are meant to encourage that behavior. But somebody using them to lower their taxes is engaged in tax avoidance. Is that wrong? Many states have business tax laws that aren't as noble-minded but are meant to encourage businesses to hire people (e.g., no income tax) or operate from those states (e.g., favorable treatment of inventory). Is it wrong to take advantage of those tax laws? In my opinion, the alternative minimum tax ( https://www.irs.gov/taxtopics/tc556 https://www.irs.gov/taxtopics/tc556 ) is proof that the United States has given up on creating a system where tax deductions and tax credits always give a reasonable outcome.
  - dathanb82 6y ago
    I’d be interested in better understanding why Trump didn’t owe more under AM, since most regular deductions don’t apply in that case.
    - microcolonel 6y ago
      Upon reading the story again, I realize they literally tell you he paid over four million dollars despite only owing about 1500 bucks. I don't know why people are so upset when he literally paid 2000x more tax than he owed.
    - maxlybbert 6y ago
      Exactly. I think there’s something being left out of the story.
  - 6y ago
- phobosanomaly 6y ago
  As a normal American citizen, I often overpay taxes and then collect the amount I overpaid in my return. I certainty don't cook up elaborate schemes to avoid paying taxes. Does that make me stupid? I consider it a moral responsibility to pay back the community college and state university system, as well as the state and country that gave me access to the infrastructure and opportunity to earn that taxable income.
  - apta 6y ago
    > I certainty don't cook up elaborate schemes to avoid paying taxes. Does that make me stupid? Tax avoidance is legal, and if you're overpaying, it means you're giving the government money which you could have used in the meantime. I prefer to keep my money.
  - maxlybbert 6y ago
    You overpay during the year, but when you file your returns, do you intentionally deduct less than you’re allowed, or intentionally skip tax credits? I personally would prefer to have the government owe me money than owe the government money, but I do my best to make sure my taxes are accurate and I’m not in the hook for any more than I truly owe. Things like the child tax credit aren’t really meant to encourage particular behavior, but others are. I have a 401(k) to save for retirement, but it also lowers my taxes (in my case, it lowers my future taxes). The tax break is meant to encourage me to get the 401(k). Am I a bad person for taking advantage of the tax break?
    - phobosanomaly 6y ago
      I'm thinking more in the category of buying a failing company in anticipation of using it's annual losses to create tax benefits. The level at which you and I are engineering this stuff is kid's play. But that's kind of the idea. If you have extensive amounts of money, you hire a team to engineer getting you out of paying your fair share, I think the average person has the right to be upset about that, since all of that profit is earned on the backs of ordinary folks. If someone wants to disagree, fair enough, but I'd be mainly interested in hearing from folks who can't afford to hire a team to engineer their way out of paying taxes.
- Tagbert 6y ago
  With tax avoidance on this scale, he had better hope that the records were truthful. If they were fraudulent, the this moves from tax avoidance to tax fraud. It also shows that Trump is not the fantastic businessman that he has portrayed as his public persona
  - maxlybbert 6y ago
    Tax avoidance that allows somebody to pay $750 tax on multimillion dollar income should, without question, trigger the alternative minimum tax ( https://www.irs.gov/taxtopics/tc556 https://www.irs.gov/taxtopics/tc556 ). Which is more likely, (a) that Trump’s accountants are creative enough to get his personal tax bill to $750 without triggering the AMT, that the IRS hasn’t been able to successfully challenge the returns, and the tax experts the New York Times spoke with for this story didn’t comment on that fact, or (b) the Times story is missing key details?
- dwild 6y ago
  I put free candy on my porch, anyone can take some, someone take them all, isn't he bad for doing so? I would say kind of ;). Thing is though, tax avoidance in the level Trump would have done is another layer way crazier. Most people can't take theses candies, but he can. At one point losing that much money over that many year start to be too much.
rsstack 6y ago
Counter-reminder: tax fraud /= tax avoidance. The IRS, and Congress through the Tax committee, will judge that.
- jonstewart 6y ago
  Right. I’m sure he, as POTUS, and his political appointees haven’t done anything to interfere with the decade-long IRS audit into his refund.
  - silexia 6y ago
    This is an absolutely critical point. Trump appears to be subverting institutions ranging from inspector generals to the military to the post office. I bet the IRS is his prime target.
SamBam 6y ago
Sure, but what's being implied in the article, and the years-long IRS investigation/battle, is that the constant declared losses were indeed tax fraud.
wwright 6y ago
Not a crime != not an absolutely shitty thing to do
- austhrow743 6y ago
  Sure but we're talking about tax avoidance here.
  - wwright 6y ago
    Yeah, which IMO is a shitty thing to do at this scale
    - CamperBob2 6y ago
      To play devil's advocate, at what scale should I instruct my CPA not to take every deduction I'm entitled to?
      - wwright 6y ago
        In my opinion: when you could be paying tens of thousands or more to support others, instead you are paying $0, and you know other people who barely make half the median household income are paying 20–30% of their total income. Do these rules exist for other people? Yes! Is he possibly only taking advantage of what others allow him to do? Sure! Is it still selfish and trivially anti-social? Yes. If they made it legal for billionaires to steal cars off the street, it would still be shitty for them to steal cars.
        dathanb82 6y ago
        If you make half the median national household income, you’re making about $30K, and your effective federal tax rate is barely over 14%. Your 20%-30% scenario doesn’t seem to add up.
      - acdha 6y ago
        When you’re portraying yourself as a billionaire you can afford to pay for your own hair stylist.
wreck 6y ago
This is the more important part IMO: "Mr. Trump’s businesses appear to have benefited from his position, and his far-flung holdings have created potential conflicts between his own financial interests and the nation’s diplomatic interests"
- koheripbal 6y ago
  Unfortunately, this lacks specifics. WHICH assets? Which conflict? Which diplomatic effort?
pontus 6y ago
I think one of the issues is that he has simultaneously told the opposite story to his lenders, making himself look wealthier than he is in order to score loans. This, is fraud.
- jmcguckin 6y ago
  When I bought my house (borrowing roughly 200K) the bank wanted several years of tax returns and basically put my finances under a microscope. Pretty much everything except the anal probe. So, you think a bank that's going to lend Trump 100 Million isn't going to examine his finances in greater detail?
  - notacoward 6y ago
    Bold of you to assume the same rules apply to you and him. It's not even the same group of people evaluating your loan vs. his. Then they're going to evaluate his differently. Nobody's going to get promoted for landing your deal, but someone very well might for landing his. Yes, they'll look into his finances some, but they couldn't possibly probe every nook and cranny of such a large and complex empire where the dirty bits might be hidden. With greed nipping at their heels, they'll quickly convince themselves it's good enough. In short, not the same process or standards at all.
  - rrss 6y ago
    Yes. > In 2003, Deutsche Bank helped Mr. Trump’s casino company sell hundreds of millions of dollars in bonds. > Mr. Trump’s company defaulted in 2004, leaving Deutsche Bank’s clients with deep losses. The bank’s investment division that sold the bonds vowed to not do business again with Mr. Trump > A year later, though, Mr. Trump approached another part of the investment division for a $640 million loan to build a skyscraper in Chicago. It made the loan — and in 2008, Mr. Trump defaulted and sued Deutsche Bank. That prompted the whole investment division to sever ties with Mr. Trump. > And then, three years after his previous default, Deutsche Bank started lending to him again, this time through the private-banking division that catered to the superrich. In fact, it lent Mr. Trump money that he used to repay what he still owed Deutsche Bank’s investment division for the Chicago loan. > In 2016, the board of directors commissioned a report into how the bank had become so enmeshed with Mr. Trump > The report, prepared by the board’s integrity committee, concluded that Deutsche’s private-banking division, which catered to very rich individuals, was so determined to win business from big-name clients that its executives had looked past Mr. Trump’s history of stiffing his lenders So, try this: default on your ~200k mortgage. take out another, larger mortgage with the same bank. default on that one too, and then sue the bank for damages. then get a loan from the same bank to pay back your remaining debt from the second mortgage. I'm skeptical that you could pull this off, and yet Donald Trump somehow managed to get comparable loans from Deutsche Bank. https://www.nytimes.com/2019/03/18/business/deutsche-bank-donald-trump.html https://www.nytimes.com/2019/03/18/business/deutsche-bank-do...
mandevil 6y ago
If you read the article, you'd see that there is a critical thing where he got a 70 million dollar refund, in a manner which probably violated IRS Guidelines. This has been debated since 2011, and has still not reached a decision. If the IRS (and Congress, since they need to sign off on all refunds for individuals > 2 million) declare that he was not entitled to that refund (which from the article seems like the way that it ought to go) he will owe back that 70 million with interest, putting it close to 100 million today.
- digitaltrees 6y ago
  No conflict of interest there. Nothing to see folks. This is total BS. At this point I am about to cut ties with my family that supports Trump. This is beyond anything approaching reason.
  - me_me_me 6y ago
    Why? Are they bad people? Cutting ties due to flavor of political leanings sounds very short sighted. My parents are religious I am not, catholic church was actively protecting pedophiles. Should I cut ties to my family??
    - bradlys 6y ago
      Are people who protect institutions that protect rapists of children good people? Starts sounding like the Dave Chapelle skit: "He rapes but he saves!" I wonder why we frame things in terms of, "are they bad" instead of asking, "are they good".
    - digitaltrees 6y ago
      Are they actively supporting the church in gaining power to continue the abuse? Then, yes, cut ties. It's the active support of someone damaging the world that was my point. Trump has A HALF BILLION in PERSONAL liability... that is fundamentally disqualifying from holding office because it presents a profound national security risk. At this point anyone that supports him is risking the existence of our country. Just pick another republican at this point, enough is enough.
fjdjsmsm 6y ago
The article lists several examples of things that go beyond avoidance. He paid millions in mysterious ‘consulting’ fees that appear to have gone to his kids, despite them being employees. He declared that he had no financial benefit in a business he walked away from despite still owning 5 percent of it. ...
- koheripbal 6y ago
  Again, a lot of these things are pretty common in business. My Dad has a business, and pays me a consultancy fee. I pay consultancy fees to my wife. None of this is unusual for a family business.
  - fjdjsmsm 6y ago
    If they are employees, and you are doing that, it is actually illegal. You are either a consultant, or an employee.
  - dathanb82 6y ago
    It is unusual to pay your children as regular employees and also pay them as consultants, tho.
  - implements 6y ago
    Do the regulations require that such fees must be ‘honest’ ie be for actual work and proportional to the market value of that work? Are the fees declared to the IRS and all relevant taxes paid? No need to answer (it’s your private business), but just because petty abuses are common and rarely caught doesn’t mean they’re legitimate business practices.
  - digitaltrees 6y ago
    You can’t do that while also being an employee.
softwaredoug 6y ago
I think journalists will hesitate to equate sketchiness to crime as the latter is a legal finding after a formal investigation. They will tend to just point to sketchiness in suggestive language.
implements 6y ago
There’s quite a large grey area between the two, to the extent that anyone who aggressively avoids tax using ‘state of the art’ accounting schemes is well aware that they’re on legal thin ice. TL;DR: Think “Schrödinger's Criminality”.
digitaltrees 6y ago
There are markers of tax fraud here.

Reminder; tax avoidance != tax fraud.

by kache_ 6y ago

Reminder; tax avoidance != tax fraud.

I honestly don't understand why “tax avoidance” is meant to sound so naughty. Almost everyone avoids taxes, almost every time they might be subject to a tax; some people are just better at it. When you fail to collect taxes from somebody who is following the law, that is a matter for your tax code, not a moral failing of the filer.

yokaze 6y ago
Quite a different thing though if you are head of government which is supposed to collect taxes from people like you, and you see no need to change that.
- microcolonel 6y ago
  > Quite a different thing though if you are head of government which is supposed to collect taxes from people like you, and you see no need to change that. His predecessors/competitors talk a big game, but they were in office for eight years; take a lucky guess whether it got easier or harder, under the Obama-Biden administration, for people in Donald Trump's business to deduct and reclassify almost all of their taxable transfers and incomes. If there's an improper or unjustifiable deduction in these filings, then complain about that. Nobody has any obligation, and essentially nobody has any private reason, to pay taxes that they do not owe. If you think they should owe taxes, then complain that they don't owe them, not that they won't pay what they don't owe.
  - eli_gottlieb 6y ago
    As I recall, the Republican Congress actually cut funding to the IRS for tax enforcement during Obama's second term, so we actually don't know who's committing tax fraud. The audits just aren't being done.
_jahh 6y ago
no the tax system is set up to enable more avoidance the greater the sum.
maxlybbert 6y ago
Judge Learned Hand (not the Supreme Court, but often quoted; I'm sure partly for the name): "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes" (Gregory v. Helvering, 1934) "Over and over again courts have said that there is nothing sinister in so arranging one's affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions" (Commissioner v. Newman, 1947). People can lower their taxes by buying alternative fuel vehicles, renovating historic properties, donating to charities, etc. Those laws are meant to encourage that behavior. But somebody using them to lower their taxes is engaged in tax avoidance. Is that wrong? Many states have business tax laws that aren't as noble-minded but are meant to encourage businesses to hire people (e.g., no income tax) or operate from those states (e.g., favorable treatment of inventory). Is it wrong to take advantage of those tax laws? In my opinion, the alternative minimum tax ( https://www.irs.gov/taxtopics/tc556 https://www.irs.gov/taxtopics/tc556 ) is proof that the United States has given up on creating a system where tax deductions and tax credits always give a reasonable outcome.
- dathanb82 6y ago
  I’d be interested in better understanding why Trump didn’t owe more under AM, since most regular deductions don’t apply in that case.
  - microcolonel 6y ago
    Upon reading the story again, I realize they literally tell you he paid over four million dollars despite only owing about 1500 bucks. I don't know why people are so upset when he literally paid 2000x more tax than he owed.
  - maxlybbert 6y ago
    Exactly. I think there’s something being left out of the story.
- 6y ago
phobosanomaly 6y ago
As a normal American citizen, I often overpay taxes and then collect the amount I overpaid in my return. I certainty don't cook up elaborate schemes to avoid paying taxes. Does that make me stupid? I consider it a moral responsibility to pay back the community college and state university system, as well as the state and country that gave me access to the infrastructure and opportunity to earn that taxable income.
- apta 6y ago
  > I certainty don't cook up elaborate schemes to avoid paying taxes. Does that make me stupid? Tax avoidance is legal, and if you're overpaying, it means you're giving the government money which you could have used in the meantime. I prefer to keep my money.
- maxlybbert 6y ago
  You overpay during the year, but when you file your returns, do you intentionally deduct less than you’re allowed, or intentionally skip tax credits? I personally would prefer to have the government owe me money than owe the government money, but I do my best to make sure my taxes are accurate and I’m not in the hook for any more than I truly owe. Things like the child tax credit aren’t really meant to encourage particular behavior, but others are. I have a 401(k) to save for retirement, but it also lowers my taxes (in my case, it lowers my future taxes). The tax break is meant to encourage me to get the 401(k). Am I a bad person for taking advantage of the tax break?
  - phobosanomaly 6y ago
    I'm thinking more in the category of buying a failing company in anticipation of using it's annual losses to create tax benefits. The level at which you and I are engineering this stuff is kid's play. But that's kind of the idea. If you have extensive amounts of money, you hire a team to engineer getting you out of paying your fair share, I think the average person has the right to be upset about that, since all of that profit is earned on the backs of ordinary folks. If someone wants to disagree, fair enough, but I'd be mainly interested in hearing from folks who can't afford to hire a team to engineer their way out of paying taxes.
Tagbert 6y ago
With tax avoidance on this scale, he had better hope that the records were truthful. If they were fraudulent, the this moves from tax avoidance to tax fraud. It also shows that Trump is not the fantastic businessman that he has portrayed as his public persona
- maxlybbert 6y ago
  Tax avoidance that allows somebody to pay $750 tax on multimillion dollar income should, without question, trigger the alternative minimum tax ( https://www.irs.gov/taxtopics/tc556 https://www.irs.gov/taxtopics/tc556 ). Which is more likely, (a) that Trump’s accountants are creative enough to get his personal tax bill to $750 without triggering the AMT, that the IRS hasn’t been able to successfully challenge the returns, and the tax experts the New York Times spoke with for this story didn’t comment on that fact, or (b) the Times story is missing key details?
dwild 6y ago
I put free candy on my porch, anyone can take some, someone take them all, isn't he bad for doing so? I would say kind of ;). Thing is though, tax avoidance in the level Trump would have done is another layer way crazier. Most people can't take theses candies, but he can. At one point losing that much money over that many year start to be too much.

rsstack 6y ago

Counter-reminder: tax fraud /= tax avoidance. The IRS, and Congress through the Tax committee, will judge that.

jonstewart 6y ago
Right. I’m sure he, as POTUS, and his political appointees haven’t done anything to interfere with the decade-long IRS audit into his refund.
- silexia 6y ago
  This is an absolutely critical point. Trump appears to be subverting institutions ranging from inspector generals to the military to the post office. I bet the IRS is his prime target.

SamBam 6y ago

Sure, but what's being implied in the article, and the years-long IRS investigation/battle, is that the constant declared losses were indeed tax fraud.

wwright 6y ago

Not a crime != not an absolutely shitty thing to do

austhrow743 6y ago
Sure but we're talking about tax avoidance here.
- wwright 6y ago
  Yeah, which IMO is a shitty thing to do at this scale
  - CamperBob2 6y ago
    To play devil's advocate, at what scale should I instruct my CPA not to take every deduction I'm entitled to?
    - wwright 6y ago
      In my opinion: when you could be paying tens of thousands or more to support others, instead you are paying $0, and you know other people who barely make half the median household income are paying 20–30% of their total income. Do these rules exist for other people? Yes! Is he possibly only taking advantage of what others allow him to do? Sure! Is it still selfish and trivially anti-social? Yes. If they made it legal for billionaires to steal cars off the street, it would still be shitty for them to steal cars.
      - dathanb82 6y ago
        If you make half the median national household income, you’re making about $30K, and your effective federal tax rate is barely over 14%. Your 20%-30% scenario doesn’t seem to add up.
    - acdha 6y ago
      When you’re portraying yourself as a billionaire you can afford to pay for your own hair stylist.

wreck 6y ago

This is the more important part IMO: "Mr. Trump’s businesses appear to have benefited from his position, and his far-flung holdings have created potential conflicts between his own financial interests and the nation’s diplomatic interests"

koheripbal 6y ago
Unfortunately, this lacks specifics. WHICH assets? Which conflict? Which diplomatic effort?

pontus 6y ago

I think one of the issues is that he has simultaneously told the opposite story to his lenders, making himself look wealthier than he is in order to score loans. This, is fraud.

jmcguckin 6y ago
When I bought my house (borrowing roughly 200K) the bank wanted several years of tax returns and basically put my finances under a microscope. Pretty much everything except the anal probe. So, you think a bank that's going to lend Trump 100 Million isn't going to examine his finances in greater detail?
- notacoward 6y ago
  Bold of you to assume the same rules apply to you and him. It's not even the same group of people evaluating your loan vs. his. Then they're going to evaluate his differently. Nobody's going to get promoted for landing your deal, but someone very well might for landing his. Yes, they'll look into his finances some, but they couldn't possibly probe every nook and cranny of such a large and complex empire where the dirty bits might be hidden. With greed nipping at their heels, they'll quickly convince themselves it's good enough. In short, not the same process or standards at all.
- rrss 6y ago
  Yes. > In 2003, Deutsche Bank helped Mr. Trump’s casino company sell hundreds of millions of dollars in bonds. > Mr. Trump’s company defaulted in 2004, leaving Deutsche Bank’s clients with deep losses. The bank’s investment division that sold the bonds vowed to not do business again with Mr. Trump > A year later, though, Mr. Trump approached another part of the investment division for a $640 million loan to build a skyscraper in Chicago. It made the loan — and in 2008, Mr. Trump defaulted and sued Deutsche Bank. That prompted the whole investment division to sever ties with Mr. Trump. > And then, three years after his previous default, Deutsche Bank started lending to him again, this time through the private-banking division that catered to the superrich. In fact, it lent Mr. Trump money that he used to repay what he still owed Deutsche Bank’s investment division for the Chicago loan. > In 2016, the board of directors commissioned a report into how the bank had become so enmeshed with Mr. Trump > The report, prepared by the board’s integrity committee, concluded that Deutsche’s private-banking division, which catered to very rich individuals, was so determined to win business from big-name clients that its executives had looked past Mr. Trump’s history of stiffing his lenders So, try this: default on your ~200k mortgage. take out another, larger mortgage with the same bank. default on that one too, and then sue the bank for damages. then get a loan from the same bank to pay back your remaining debt from the second mortgage. I'm skeptical that you could pull this off, and yet Donald Trump somehow managed to get comparable loans from Deutsche Bank. https://www.nytimes.com/2019/03/18/business/deutsche-bank-donald-trump.html https://www.nytimes.com/2019/03/18/business/deutsche-bank-do...

mandevil 6y ago

If you read the article, you'd see that there is a critical thing where he got a 70 million dollar refund, in a manner which probably violated IRS Guidelines. This has been debated since 2011, and has still not reached a decision. If the IRS (and Congress, since they need to sign off on all refunds for individuals > 2 million) declare that he was not entitled to that refund (which from the article seems like the way that it ought to go) he will owe back that 70 million with interest, putting it close to 100 million today.

digitaltrees 6y ago
No conflict of interest there. Nothing to see folks. This is total BS. At this point I am about to cut ties with my family that supports Trump. This is beyond anything approaching reason.
- me_me_me 6y ago
  Why? Are they bad people? Cutting ties due to flavor of political leanings sounds very short sighted. My parents are religious I am not, catholic church was actively protecting pedophiles. Should I cut ties to my family??
  - bradlys 6y ago
    Are people who protect institutions that protect rapists of children good people? Starts sounding like the Dave Chapelle skit: "He rapes but he saves!" I wonder why we frame things in terms of, "are they bad" instead of asking, "are they good".
  - digitaltrees 6y ago
    Are they actively supporting the church in gaining power to continue the abuse? Then, yes, cut ties. It's the active support of someone damaging the world that was my point. Trump has A HALF BILLION in PERSONAL liability... that is fundamentally disqualifying from holding office because it presents a profound national security risk. At this point anyone that supports him is risking the existence of our country. Just pick another republican at this point, enough is enough.

fjdjsmsm 6y ago

The article lists several examples of things that go beyond avoidance. He paid millions in mysterious ‘consulting’ fees that appear to have gone to his kids, despite them being employees. He declared that he had no financial benefit in a business he walked away from despite still owning 5 percent of it. ...

koheripbal 6y ago
Again, a lot of these things are pretty common in business. My Dad has a business, and pays me a consultancy fee. I pay consultancy fees to my wife. None of this is unusual for a family business.
- fjdjsmsm 6y ago
  If they are employees, and you are doing that, it is actually illegal. You are either a consultant, or an employee.
- dathanb82 6y ago
  It is unusual to pay your children as regular employees and also pay them as consultants, tho.
- implements 6y ago
  Do the regulations require that such fees must be ‘honest’ ie be for actual work and proportional to the market value of that work? Are the fees declared to the IRS and all relevant taxes paid? No need to answer (it’s your private business), but just because petty abuses are common and rarely caught doesn’t mean they’re legitimate business practices.
- digitaltrees 6y ago
  You can’t do that while also being an employee.

softwaredoug 6y ago

I think journalists will hesitate to equate sketchiness to crime as the latter is a legal finding after a formal investigation. They will tend to just point to sketchiness in suggestive language.

implements 6y ago

There’s quite a large grey area between the two, to the extent that anyone who aggressively avoids tax using ‘state of the art’ accounting schemes is well aware that they’re on legal thin ice. TL;DR: Think “Schrödinger's Criminality”.

digitaltrees 6y ago

There are markers of tax fraud here.