Legally being the keyword here
Wrong, the key word here is dubious (if Trump released his taxes, he'd probably be in jail - golden letters or not.) because, now that the underfunded IRS has been alerted to Trump's dodge it's doubtful the IRS will simply pocket that info.
It's not likely the IRS will take any action during campaign (it's government policy, except for Jim Comey who plays by his own rules) season but... But Trump walked a legal tightrope and according to many tax experts Trump stepped over the line but because of several letters that were sent to the IRS by Trump's paid tax lawyers - apparently that's all it takes (I've done that myself) even at the billionaire level where the tax dodge by Trump was in the 10's possibly 100's of millions of dollars in revenue that had to be made up by other people paying more or-----or the federal government having to borrow more and more money from overseas sources.
But my questions are; is Trump still clipping coupons from his 1994 tax dodge? Was Trump still cashing in after the law was changed (Hillary voted for the change) in 2004? Even if Trump is able to skate on the legal technicalities of the tax code, will Trump's creditors and partners that got screwed in Trump's 1994 tax dodge be able to sue for damages from Trump's manipulation of the tax code? Was Lyin' Trump lying when he said he's been audited 12 years in row?
Trump's tax dodge skirted the edge of the law, report says
Seema Mehta
At a time when
Donald Trump’s casinos were bleeding money and he was badly in debt, the Republican presidential nominee used a
“legally dubious” accounting maneuver to avoid reporting hundreds of millions of dollars in income, according to a New York Times report Monday.
In the early 1990s, Trump convinced financial backers to forgive large debts he could not repay, the paper wrote. But he avoided having to report the canceled debts as income because he gave the backers equity in his partnerships that owned the casinos, effectively writing off the income.
Trump’s attorneys advised him at the time that if he were audited, the Internal Revenue Service would not look favorably upon the tactic, the paper reported. In 2004, Congress voted to outlaw the practice. Then-Sen. Hillary Clinton was among those who voted to close the loophole.
Trump declined to comment on the report, and his spokeswoman Hope Hicks dismissed it as “either a fundamental misunderstanding or an intentional misreading of the law.”
The Times wrote that it discovered the tax gambit while combing through casino bankruptcy filings. The newspaper posted on its website “tax opinion letters” Trump obtained from his attorneys about the maneuvers.
On the campaign trail, Trump has bragged about his ability to use tax loopholes and said his knowledge of the flaws in the tax structure made him the most capable to fix it.
But Trump's claims about his taxes and income are not independently verifiable because he has refused to release his tax returns, bucking four decades of practice among presidential nominees.
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So the IRS didn't review a massive write-off by a known outlandish billionaire?
and your statement "If he released the returns he'd be in jail" is idiotic, the returns GO TO THE IRS!. If they would have found an issue, don't you think he would have been investigated DECADES ago?
This is simply your side not being able to find anything illegal in what he did, so you have to go with flim-flammery to try to equate the legal things he did with something criminal.
There's no rule on the USMB that says you have to believe me but since you're defending Trump, listen to Trumps own words, he confessed that he scammed (my word) the IRS and he and he alone can fix it.
How did Trump get away with ripping off the IRS...
Because the IRS is underfunded and therefore understaffed if you're a rich guy you can hire a (or an army of) high powered expert tax-lawyer to write a golden letter to the IRS and because the IRS doesn't have the resources to audit every red flag, the IRS almost always take the "tax experts" (hired guns) word for it - I've used this same tactic myself, on a much smaller scale, of course. When I got flagged for a questionable deduction which my accountant said would go thru with no problem, I took my letter from the IRS to my accountant, my accountant said he would handle it by writing a "gold standard" letter...
I didn't hear another word about it - bing-bang-boom---done.
<snip>
Enter the tax advisers with their audacious plan: Why not eliminate all that taxable income from canceled debt by swapping “partnership equity” for debt in exactly the same way corporations had been swapping company stock for debt?
True enough, the I.R.S. and Congress had clearly signaled their disapproval of the basic concept. Fred T. Goldberg, who was the I.R.S. commissioner under George Bush, recalled in an interview that the I.R.S. frowned on partnership equity-for-debt swaps for the same reason it objected to corporate stock-for-debt swaps. “The
fiction is that the partnership interest has the same value as the debt,” he said. Lee A. Sheppard, a contributing editor to Tax Notes, wrote in 1991 that
trying to find a legal justification for this tactic was akin to proving “the existence of the Loch Ness monster.”
On the campaign trail, Mr. Trump boasts of his mastery of tax loopholes and claims no other candidate for the White House has ever known more about the tax code. This background, he argues with evident disgust, gives him special insight into the way
wealthy elites buy off politicians and hire high-priced lawyers and accountants to rig the tax system — just as, he claims, they rig elections.
That insight was on display in 1991 and 1992 when he was laying the groundwork to make a multimillion-dollar tax bill disappear.
Before proceeding with his plan, Mr. Trump did what most prudent taxpayers do:
He sought a formal tax opinion letter. Such letters, typically written by highly paid lawyers who spend entire careers mastering the roughly 10,000 pages of ever-changing statutes that make up the United States tax code, can provide important
protection to taxpayers. As long as a tax adviser blesses a particular tax strategy in a formal opinion letter, the taxpayer most likely will not face penalties even if the I.R.S. ultimately rules the strategy was improper.
The language used in tax opinion letters has a specialized meaning understood by all tax professionals. So, for example, when a tax lawyer writes that a shelter is “more likely than not” going to be approved by the I.R.S., this means there is at least a 51 percent chance the shelter will withstand scrutiny. (This is known as an “M.L.T.N.” letter in the vernacular of tax lawyers.) A “should” letter means there is about a 75 percent chance the I.R.S. will not object.
The gold standard, a “will” letter, means the I.R.S. is all but certain to bless the tax avoidance strategy.
But the opinion letters Mr. Trump received from his tax lawyers at Willkie Farr & Gallagher were far from the gold standard. The letters bluntly warned that there was no statute, regulation or judicial opinion that explicitly permitted Mr. Trump’s tax gambit. “Due to the lack of definitive judicial or administrative authority,” his lawyers wrote, “substantial uncertainties exist with respect to many of the tax consequences of the plan.”
<snip>
One letter, 25 pages long, analyzed seven distinct components of Mr. Trump’s proposed tax maneuver. It found only “substantial authority” for six of the components. In the stilted language of tax opinion letters, the phrase “substantial authority” is a
red flag that the lawyers believe the I.R.S. can be expected to rule against the taxpayer roughly two-thirds of the time. In other words, Mr. Trump’s tax lawyers were telling him there were at least six different reasons the I.R.S. would probably cry foul if he were audited. In anticipation of that possibility, the lawyers even laid out a fallback plan that would have allowed Mr. Trump to spread the pain of a large tax hit over many years if the I.R.S. ultimately balked.
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... is dubious illegal?
