On Thursday the Attorney General for the State of New York obtained an indictment charging Trump Inc., and its longtime Chief Financial Officer Alen Weisselberg with engaging in a 15 year-long scheme to evade paying income taxes s that the company failed to properly account for the "bonus" payments made to employees, as well as payment by the company of certain employee expenses as fringe benefits, such as private school tuition, cars, and housing costs.
The indictment alleges that Trump Inc. and Weisselberg structured an off-the-books compensation scheme that allowed Weisselberg to receive approximately $1.76 million in income which was not reported to taxing authorities. The is approximately $120,000 a year over the 15 year period.
Curiously, although the indictment is a bit coy on the specifics, it seems like Weisselberg was the “official” at Trump Inc. who could authorize all the allegedly illegal actions by Trump Inc. that are alleged to have conveyed illegal tax benefits to him.
The tax benefits allegedly became illegal when Weisselberg failed to declare the off-the-books benefits as income subject to taxation.
Sounds like circular reasoning to me.
Here are the investigators discussing the theory of the case.
I was surprised when I read at the beginning of the indictment that among the “victims” of the “fraud” scheme as alleged in the indictment is the IRS.
I was stunned when I read further and saw that the indictment claims Weisselberg “evaded” $550,000 in FEDERAL income taxes as a result.
So far as I’m aware, the IRS has never made such a claim and such determinations rest exclusively with IRS, not a State Attorney General.
The IRS will likely be heartened to know that the New York Attorney General is protecting it from such financial felonious miscreants as Alan Weisselberg, and saving it from the ineptitude of all those IRS agents whose job it is to make sure everyone pays their taxes in the appropriate amount.
What would they all do without the NY AG’s expert staff?
This brings me to a point I made on Twitter.
NYC has tens of thousands of attorneys, including some of the very best attorneys in the entire world. I’m going to speculate and venture a guess that obtaining a job in the NY AG’s office isn’t high on the “Prestige-O-Meter”, and the lawyering done here seems to confirm that.
The nature of the allegations made in the indictment is tedious. They can be paraphrased in the following manner:
The Trump Corp paid living and personal family expenses of Weisselberg, adjusted down the amount of his wages to reflect those payments, reported wage income as paid but failed to report as part of his income the total monetary value of the non-wage benefits. The obligation to pay taxes was ALWAYS on Weisselberg, and AT MOST, Trump Inc. avoided payment of its one-half share of Social Security tax on Weisselberg’s income. But that only applies up to the first approximately $120,000 of wage income, and since he made more than that Trump Inc did pay its full share of his Social Security tax.
So what did Trump Inc fail to pay as a result of this “fraud scheme” by which it victimized the IRS????
Ummm — nothing?
What the media won't say is that focusing a case in this fashion at this point, and working so hard to obtain the cooperation of Weisselberg, reflects that the investigation has otherwise come up empty. Pressuring Weisselberg into cooperating might -- hopefully -- open the door to other avenues of inquiry into Trump, Inc., that might touch on former President Trump himself. So far they don't have that or they would not be making this gambit.
That's all it really is.
Unless Weisselberg actually has something to offer and changes his mind about cooperating, it looks like yet another failed effort to take down President Trump in an effort to drive him from the national political scene.
I'll end with this observation which I've made on Twitter many times -- Donald Trump and Trump, Inc., might be the most heavily scrutinized individual and company for tax purposes over the past 30+ years -- both at the federal level and in New York. Yet there has never been a tax prosecution of him even attempted going back to long before he entered politics.
There isn't anything to find. He's paid lawyers and accountants millions of dollars over the decades he's been in business to keep him out of tax problems -- just like all rich people do.
This is a Captain Ahab-like pursuit of Moby Dick.
It will probably end in the same fashion as Melville's classic.