That one? Worrying enough in my book. OK, he does not read, so books do not count, but still…
Another quell of Schadenfreude: Giuliani. He will no longer be serving in tanTrumps impeachment team. Excuse: because he is a witness, he spoke at the rally inciting violence, thus cannot defend tanTrump. Real reason: tanTrump is no longer paying him. And both men’s idiocy is under audit by the CDC for exceeding legal limits by a factor of 20 or more.
If you agree to do work for someone who has a well-established history of stiffing workers on their pay, and you charge that someone an exorbitant and unrealistic amount, can you really claim that as a loss on your taxes?
No, an unpaid invoice does not become a tax loss, so the idea of writing an arbitrarily large invoice to generate a huge loss just doesn’t work. There are loopholes in the tax system, but it’s not insane.
Suppose you’re running a law firm. You have the expenses of running the business - paying staff, renting office space, etc. And you have income when clients pay bills. You pay taxes on your profits - income minus expenses. If a client doesn’t pay a bill, that just never hits the income side*. Any loss associated with doing that work would only arise from the actual expenses associated with doing the work, that’s a real loss.
The way to scam the system is not to write inflated invoices, it is to inflate your expenses. For example, to pay a family member a huge consulting fee out of your law firm. Does that kind of thing sound familiar?
(*Technically, if your accrual method treated an unpaid invoice as income in a prior year, if ultimately unpaid it could be deducted in a later year. But that’s a wash.)
As has been mentioned, and I am just reinforcing, the only way you’d be able to claim a loss from an unpaid invoice is if you had already recognized the income. You can claim all the expenses that went into producing those services just like you always were able to, just like anything else you produce that doesn’t sell. Those are real expenses though, not fake ones.
Why, exactly, would he have to be a witness? We know what he said. We know what Trump said. What is Giuliani going to say at the trial that sheds any light on anything?
Poor, poor Donnie. He started his Presidenting Adventure by paying people to cheer at his 2015 announcement at Trump Tower (the famous Escalator scene).
Now that he’s leaving in disgrace, he’s having trouble coming up with people to show up at his Big Farewell Ceremony on January 20:
The smart bet is that he’ll end up having to pay people to show up and cheer this time, too.