This time they are from India.
It seems that the press has been obsessed in the last few days about an alleged loss that Donald Trump had 21 years ago. First off, sharing confidential tax return information is against the law so the tax records were illegally obtained. Second there is a major discrepancy in the pages shared by the NY Times. Being a tax person, I was curious what was shown on the return so I looked it up on google.
There is nothing from Trumps 1995 federal return but there are 3 pages from different state returns, one page each from New York, Connecticut and New Jersey. The NY and CT returns show the 900+ million dollar loss that has been reported widely in the press. But, the NJ return shows income from all sources to be a positive of over 19 million dollars, roughly 1.5 million of that coming from NJ sources. So, did he make 19 million or lose 900 million. Apparently, the 900 million dollar loss is a better story so they went with that. By the way, sharing confidential tax information is a crime so I will not be providing a link to the pages, but I’ll bet if you search for Trump tax records and NY times you can find it… unless they remove it from their site.
Although it has been demonstrated that numerous things Commissioner Koskinen testified to congress have proven to be false, he will likely not face any consequences for his actions. Regarding the attempts to comply with a 2013 congressional subpoena to turn over to congress all communications from Lois Lerner during the time period of the targeting scandal, he told congress in the summer of 2014 that thousands of employee hours and millions of dollars had been spent in the effort to comply with the subpoena. When in fact, virtually nothing was done to comply with it. The IT technology chief issued a preservation order to preserve all emails, but that direction never went to those responsible for recycling (erasing) old hard drives and back up tapes. When the Inspector General drove to that office in Martinsburg Virginia and requested related information, they received some back up tapes with roughly 1,000 emails from Lois Lerner. They told the IG that they had never received any communication from anyone regarding the need to preserve anything related to the targeting scandal. Here’s a link that discusses the timeline for the destruction of evidence relating to the congressional subpoena. So, what happened to the two employees blamed for destroying 422 back up tapes containing the information in the subpoena? Absolutely nothing. They have both been transferred to different positions but still work at the IRS. It appears the only people capable of holding crooked politicians accountable are the voters.
Citing fiscal concerns, Governor Brown vetoed a bill that would have ended the sales tax on tampons and other feminine supplies. This bill, as well as another bill to end sales tax on diapers, although passed unanimously by the legislature did not survive the governors veto. Another bill which would have conformed to a federal law granting tax relief from cancellation of debt income through a short sale or foreclosure of someone’s home was also vetoed. So CA can’t afford to help struggling young mothers with diapers or feminine products. Nor can they afford to give tax relief to those who lost their homes, but hey, we have been promised that someday we will have a bullet train.
Many people have turned recently to providing services or renting their houses or cars to provide extra income through internet based sites such as AirBnB, Uber, taskrabbit etc. IRS reminds us that this extra income is taxable and should be reported. In general all income is taxable unless specifically excluded by statute. On the IRS website, they have a page dedicated to providing info on the shared economy. It is also imperative to know what deductions you are entitled to on your tax returns in relation to the income. What to deduct and where on your return to deduct it varies greatly by your exact circumstances. You can contact us or another competent tax professional such as an Enrolled Agent in your area to address these issues.
The Political Action Group Democratic Coalition Against Trump has filed a FOIA (Freedom Of Information Act) request to try and obtain tax records of Donald Trump. Although they claim that similar requests have been successful in the past it would be illegal for the IRS to honor it. IRC§ 6103 prohibits the release of tax return information to anyone even other government agencies unless the request for information meets one of the specific exceptions laid out in that code section. Wanting to know information about a political opponent is not even close to any exception listed under the IRC. Although releasing the information would be illegal, that doesn’t mean they won’t do it. IRS employees have violated this law on various occasions in recent years to try and influence elections.
The appeals court for the District of Columbia just ruled against the IRS in a suit brought by various groups that were victims of the IRS targeting scandal. In spite of multiple violations of law, the IRS has failed to fully cooperate with congressional investigators and the DOJ refuses to prosecute those responsible, but the victims have filed suit and based on this decision will still have their day in court. I have outlined the major points of the scandal here for those interested in learning more.
Unfortunately, ID theft is a common concern for many of us. The Federal Government has put together a useful website to assist in dealing with the issue here.
US Olympic athletes who win medals receive a cash payment from the US Olympic Committee which under current law is taxable to the recipient. Current tax law says that all income is taxable regardless of its source unless specifically exempted by statute. Senator Charles Schumer is pushing legislation to exempt athletes from taxation for winning a medal. He says someone whose hard work has allowed them to rise to the top of their sport and win a medal should not be punished for their success by taxing their medal earnings. Isn’t our entire tax system based on taxing people for their success? The more you earn, the higher the tax rate you pay.
Donations to qualified charities are tax deductible, but how do you know if a charity qualifies? The IRS has information about the topic and an online tool to look up and check the status of a charity here.