Does the NY Times public release of detailed information on Trump’s recent tax returns
since Judge Victor Marrero of Federal District Court in Manhattan ordered Mr. Trump’s tax returns* to remain protected/under seal . What happens to Cyrus Vance’s case now ?
The last thing Trump wants is to go to court and prove facts concerning his tax returns. So he will just call it fake news and walk away while spewing angery tweets.
Moderator Note
This is GQ. Keep political jabs out of this forum. This should be restricted to the legal issues involved.
Colibri
General Questions Moderator
Journalists ultimately follow along a line of “publish if its in the public’s interest or right to know” something. Of course there’s a lot of ethical and moral considerations, and people/corporations/organizations can have multiple interests at play.
However while the law has repeatedly shown interest in policing the press, legal success that works against the public’s interest tends to peter out (there’s little political will to punish the refusal to hide important information) in democratic and free societies. Of course this is not case for closed states like North Korea or Russia.
It is unlikely that the release of information in the returns significantly affects a possible criminal/other case in progress.
I’m sure there will be some lawsuits filed against the Times but
See the Pentagon Papers case where a little publication called the… uh… New York Times published some classified government documents they had received.
Thanks iamthewalrus_3. That clarifies things.
For Vance to use that information in court, he would have to verify the line of custody for that evidence. The Times won’t divulge that information, so Vance must get his evidence the old fashioned way…with subpoenas.
Agreed. One possible advantage for prosecutors is that it could identify for potential witnesses some of the tax crimes that might be the subject of the criminal investigation and thus some witnesses who know that this stuff isn’t really a big secret could come forward with evidence.
Some of the potential tax evasion noted in the article include:
Other potential crimes include understating the income streams from foreign sources on his financial disclosure forms.
I have a question concerning who is criminally liable. It doesn’t have to concern any particular individual, but suppose a person files a tax return that turns out to be fraudulent. It was prepared by a licensed accounting firm and a fully accredited CPA. Who is guilty? The CPA? The filing individual? Both? Now suppose the individual provided the CPA with incorrect information that the CPA followed in good faith to create the fraudulent return. Would the CPA then be off the hook?
Again, no politics here. Just an honest hypothetical that could apply to any taxpayer.
Tax fraud can be prosecuted civilly, where the government just seeks the money it is owed, interest, and penalties, or criminally, where you can get all that plus jail. The crime of tax fraud requires scienter, meaning that the person has to have intended to commit the crime. One defense against charges of tax fraud is that the defendant relied on professional advice (although even without scienter, if the person owes the money, they will still have to pay it back).
If, instead of relying in good faith on an attorney or accountant’s well-informed advice, you conspired with the advisor to commit tax fraud both the advisor and the client can be convicted.
I haven’t seen it published - do the revelations include how much he spent in tax preparation fees? How much does that kind of tax return cost? It must have been seemingly worth it At the time.
I remember seeing that when doing my own taxes and then looking forward to being able to claim it once I started paying a CPA to do it (I had a complicated year). First she said next year, and the next year she explained it had to be a certain percentage for me to get any benefit.
If it’s a business expense, it’s deductible on that business’s return. As a personal expense, it used to be deductible as a misc. itemized deduction that was subject to the 2% of AGI limit - you only got to deduct such expenses to the extent they (in aggregate) exceeded that limit.
Additionally, such misc. itemized deductions are not allowed at all tax years 2018 through 2025 (I think) due to the TCJA.
Basically what I learned in my class on this subject was that you basically had to admit in some way that you knew what you were doing was illegal. That might be evidenced by other actions, not necessarily a confession directly to the IRS, but it has to be proof positive with no other possible interpretation that it shows that the person knowingly filed a tax return that understated their income or tax liability. Most tax cheats fall short of this by using extremely aggressive strategies that are extremely unlikely to hold up in court or allow for the IRS to waive penalties due to there being substantial authority supporting their position, and there might be little realistic reason why someone would think certain expenses are deductible, but pretty much every business owner I work with thinks a larger range of expenses are deductible than they actually are. They’re not criminals, they’re just aggressive about wanting to reduce their taxes legally.
Whether the tax preparer is liable for any problems depends a whole lot on the circumstances. In the end, the only thing a tax preparer is not allowed to do is file a return that contains information that they know is false. They may advise the client on the likelihood of the position they wish to take standing up on audit, but if the client wants to take a certain aggressive stance on a certain deduction and how it was required for their business, the preparer will oblige them if they want to keep their client. There are requirements to ask about information that appears incomplete or that is inconsistent, but clients are well-known to have a whole boat load of excuses as to why some very clearly personal expenses were actually part of their marketing campaign and/or brand image or whatever.
A lot of my daily updates seem to be about the IRS trying to stem the flow of outrageous conservation easement donations. I don’t know much about them other than they pop up in the list of things the IRS has done work on. From the name of them I can definitely imagine that there’s a lot of potential issues with people claiming large deductions for rights that are practically worthless simply because they’re so abstract.
As to whether this information was obtained through an entirely legal chain of releases, it depends on what you mean by “legal”. There was at very least some ethical breach or breach of fiduciary duty, but the former is something that’s an issue that would be taken up with the state board of accountancy, and the latter is a civil contract dispute. The only crime would be if it was an IRS (or other federal) employee who released the data, but it’s most likely that someone in the army of accountants that had access to the data was the initial leak of the data outside the Trump organization.
There are plenty of celebrities who have been bankrupted or even gone to jail when they ‘inadvertently’ used a crooked tax advisor Wesley Snipes, Mike Sorrento and Willie Nelson to name but three.
Many of the people who might have those tax returns would likely have a fiduciary duty (e.g., lawyers, accountants, and probably Turmp’s employees), but others might not, like his spouse, family, or people he just stupidly gave the tax returns to. We don’t know where they came from. Many of the earlier tax revelations came from his niece, although her tax records were less complete and less recent.
The Times claims that the persons (they used the plural) who showed them the returns had the legal right to have them. They did NOT claim that they had the legal right to show them. But the reporters will go to jail to protect their sources.
It’s going to depend on the details: who knew that they were committing fraud. Note that you can file very wrong tax returns and still not be guilty of fraud. There’s a lot of latitude for someone who gets things wrong if they are legitimately relying on a good faith misunderstanding of the law.
Tell that to Julian Assange… 