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Trump Organization Indictment Opens a HUGE Can of Worms

Trump Organization Indictment Opens a HUGE Can of Worms

The indictment against the Trump Organization and its Chief Financial Officer Allen Weisselberg rests primarily on the failure to pay taxes on what has long been called “fringe benefits.”

The anti-Trump media is fast to say that the facts are clear.  But maybe not so.  They even claim that such fringe benefits are rare — and that recipients routinely pay taxes based on the value of the benefits when they are received. That is simply untrue on both counts.  Fringe benefits are VERY common — and rarely do those who benefit pay taxes on them.

And it is almost impossible to find cases like this in which prosecutors seek CRIMINAL indictments. Where cases are prosecuted, they are usually civil matters — resulting in fines.

Many media pundits and guest media prosecutors conjectured that Trump is being singled out because he ran for President — and served as President.  Guys like MSNBC’s Larry O’Donnell claim to have predicted that increased scrutiny would lead Trump into legal hot water.  Of course, O’Donnell showed no evidence of his proclaimed prescience.

They proffer that argument as if it is appropriate — as if it is okay to single out one individual solely because of the person’s prominence, while overlooking literally billions of dollars in unpaid taxes by innumerable other Americans receiving fringe benefits.

Businesses routinely provide cars to employees.  Housing is also a common perk.  If you think not, consider this …

Based on the indictment against Weisselberg and the Trump Organization, I would suggest that prosecutors across the country start investigating those college and university presidents who are provided with luxurious on-campus mansions. I seriously doubt that they are paying taxes on the rental market value of those residences.

Various governments offer similar fringe benefits — such as cars and housing.  Most states have a mansion as the official residence for their governors.  They are also provided with cars, servants and, free meals every day for spouses and children.  Are they paying the taxes on those freebies?  Methinks not.

Has anyone checked New York Mayor Bill DeBlasio’s tax returns to see if he is paying taxes for the use of Gracie Mansion?  I could be wrong, but I am betting … not.  The rental value of that property could be several thousands of dollars every month. If it had a VERY conservative rental value of $3000 per month — or $36,000 per year — that comes to $288,000 for the eight years DeBlasio and his wife resided there.

And what about the soldiers who live on military bases and get their meals in the mess hall.  How about all those ministers and priests who are provided free housing at the rectory — or nuns at a convent? I know that may sound a bit ridiculous, but hey … if no one is above the law …???

Millions of average working Americans get fringe benefits. 

In the days I worked for Illinois Bell, I got a 20 percent discount on my phone bill. And they never even suggested that I pay taxes on that saving. Workers in retail outlets are often able to purchase goods at discount.

In my small consulting business, we routinely provided meals — including breakfast, lunch and dinner, depending on the hours of work on any given day.  In a couple instances, we even provided housing.

But in the Weisselberg case, they claim that the benefits were part of his overall compensation — and therefore he should pay taxes on them.  Fringe benefits are ALWAYS part of a person’s compensation. They are often negotiated.

There is one area, however, in which I do believe Weisselberg. And the Trump Organization may have exceeded legitimate fringe benefits — and that is paying the tuition of Weisselberg’ s grandchildren — but even that has a curious nuance.

The children in question are the offspring of Weisselberg’ s ex-daughter-in-law, Jennifer Weisselberg.  If you have been following the news, you know that she is on a hate campaign against Weissleberg, the Trump Organization and Trump, himself.  She appears regularly to accuse her ex-father-in-law and Trump of all manner of business misdeeds.

What is curious to me is why she has not been indicted for accepting the “gifts” without paying the taxes. 

As the parent of the children, SHE has received the benefit by not having to cough up the money for tuition. It is usually the person receiving such a compensation who is required to pay the taxes.  If her ex-father-in-law is a crook, so is she.

I was never prepared to be surprised if Trump or his company was charged with breaking the law.  After all, he is a New York developer where the environment is both political and corrupt, to some measure.  I honestly believe that if New York District Attorney Cyrus Vance, Jr. had thrown a dart into a list of Big Apple developers and commenced an investigation, he would find crimes.

But so far, I think Vance is abusing prosecutorial discretion with the Trump Organization indictment.  I could see some civil charges and a few fines — that is normally the way these things are resolved — but making it akin to a criminal offense in the courts and Class-A Capital Felony Offense in the court-of-public opinion is a bridge too far.  That is what makes the whole thing smell political.

The Weisselberg/Trump Organization defense may shed the spotlight on all those receiving similar fringe benefits.  That would be a can with a lot of worms.

So, there ’tis.

About The Author

Larry Horist

So,there‘tis… The opinions, perspectives and analyses of Larry Horist Larry Horist is a businessman, conservative writer and political strategist with an extensive background in economics and public policy. Clients of his consulting firm have included such conservative icons as Steve Forbes and Milton Friedman. He has served as a consultant to the Nixon White House and travelled the country as a spokesman for President Reagan’s economic reforms. He has testified as an expert witness before numerous legislative bodies, including the U. S. Congress. Horist has lectured and taught courses at numerous colleges and universities, including Harvard, Northwestern, DePaul universities, Hope College and his alma mater, Knox College. He has been a guest on hundreds of public affairs talk shows, and hosted his own program, “Chicago In Sight,” on WIND radio. Horist was a one-time candidate for mayor of Chicago and served as Executive Director of the City Club of Chicago, where he led a successful two-year campaign to save the historic Chicago Theatre from the wrecking ball. An award-winning debater, his insightful and sometimes controversial commentaries appear frequently on the editorial pages of newspapers across the nation. He is praised by readers for his style, substance and sense of humor. According to one reader, Horist is the “new Charles Krauthammer.” He is actively semi-retired in Boca Raton, Florida where he devotes his time to writing. So, there ‘tis is Horist’s signature sign off.

17 Comments

  1. Ben

    Trump: “Nobody in the history of the world knows more about taxes than I do”

    Also trump: “ tax code is so difficult, how was I supposed to know I couldn’t do that?”

    The “everyone else is doing it” isn’t a strong defense, nor is, “ I didn’t know it was wrong”.

    Reply
    • VIETNAM VET 67-68

      BEN, ONE DAY I WAS IN COURT AND THE JUDGE SAID IGNORANCE OF THE LAW IS NO EXCUSE, AND I ASKED IF HE KNEW EVERY LAW IN EVERY LAW BOOK IN HIS LIBRARY AND HE SAID NO AND I SAID ARE YOU THAT IGNORANT AS A JUDGE TO SIT THERE AND TELL ME A LAYMAN I AM IGNORANT OF THE LAW !! HE THREATENED ME WITH 30 DAYS IN JAIL FOR CONTEMPT OF COURT AND I TOLD HIM I COULDN’T LIVE LONG ENOUGH FOR THE CONTEMPT I HAD FOR HIS COURT. CASE DISMISSED !! VIETNAM VET 67-68

      Reply
      • Dan Tyree

        There’s too many laws on the books that are designed to screw people. Most laws are passed that hinder personal freedom. Instead of referring to politicians called lawmakers, they should be called freedom takers

        Reply
        • Ben

          Dan, I couldn’t agree more that the criminal law system is broken and in desperate need of reform. This is what Democrats have been pushing for years! It’s nice to hear that you are on the side of Democrats on this issue. Maybe we can finally move this agenda forward.
          It’s too bad I took a billionaire cult leader to get you guys to understand how broken the system is.

          Reply
          • Anonymous

            Ben I still believe that Trump was a great president. And I’m not necessarily talking about criminal justice reform. Of course I believe that some criminal penalties are too harsh. It doesn’t bother me to have you call Trump supporters cultists. Our cult is on the side of saving our republic. Your cult is to turn America into a socialist shithole

          • Ben

            Anon. For some reason there’s no reply button on your post. For some reason I think you’re Dan. You seem to have a man crush on me.
            * Democratic Socialist shit hole… I’d like to see us turned into a *Democratic Socialist shit hole. Not that you’d know the difference, or care to learn it.
            Just know that the human race ALWAYS eventually progresses toward more freedom for more people. It’s only a matter of time…

      • Karma Singh

        Spoken like a true human.
        I will try that next time. Thank you.

        Blessed be
        Karma Singh

        Reply
      • Ben

        Vet , great story! For some reason I find it hard to believe, but whatever.
        Somehow I don’t think that defense is very effective on a daily basis. And I’m sure it won’t work this time

        Reply
    • pcwalt

      You are apparently missing that this case is not a case against Trump. It is a case against Weisselberg in his work in the Trump organization. It was just an attempt to get Weisselberg to flip on Trump.

      Reply
  2. Tony L Bell

    Exactly my thoughts when this was first espoused by the media. They continually fail to look down the road of the flawed filled reasoning used to bludgeon opponents. Yet to determine if it is actually intentional or just plain stupidity. Either case, they will come to regret it.

    Reply
  3. robert6391

    There is one thing that is always true no mater what status in life you are when you start belittling law enforcement, they will get their own back in a legal but definite way. Just try messing with the local or state police in your area and see where it gets you, stopped for 1/2 mile over the limit, not staying stopped long enough at a stop sign, not turning your signal on soon enough or having it on to soon, and many other things which we do illegally but take for granted.
    In the Trump case in New York which will expand to other states, a Grand Jury saw enough evidence for the Grand Jury to recommend charges, which the AG put forth. I have set on Grand Juries before and the state provides you with the actual law which is being considered and then they present the evidence, in the explanation and it is up to the Grand Jury to make the decision not the AG.
    There is one thing that is wrong in this article the law covering the military and how it operates, says only the Basic Pay is taxable in any way, and that the Government is responsible to provide housing clothing and meals to the military member and those civilians attached to the military.

    Reply
  4. Karma Singh

    There’s another thing very wrong here:-
    You can’t go from nothing to criminal prosecution. If the tax authorities have never asked for any such payment, as is the case here, the AG cannot pre-empt their prerogative and make a criminal charge out of it.

    The response is that the State has no standing!
    Case dismissed.

    Blessed be
    Karma Singh

    Reply
  5. Ben

    Seems an overwhelming amount of commenters are in agreement that the criminal justice system needs reformed. Let’s start with the Republican lead war on drugs. I think that’s a great place to start!

    Reply
    • Dan Tyree

      That’s already been addressed Ben. But some drug crimes deserve harsh punishment. Like pushing especially to children But I don’t think someone with one possession offense should be a felon forever

      Reply
  6. Joe S Bruder

    Your examples of “fringe benefits” are disingenuous – a governor living in the Governor’s Mansion? Soldiers getting housing? The government is the employer in both those cases. The state and federal governments could make themselves pay taxes on the benefits, but those “perks” are written into the law, so there’s no need. And churches have a religious exemption from paying taxes, but even then, I’m sure that those “benefits” are part of the package that nuns and priests get. They get free housing, but they also get a salary and a pension, and I’m sure they pay social security taxes on their salaries.

    Fringe benefits are a “gift” by the employer, but that does not mean that the taxes are not paid. Usually the employer assigns a value to the benefit, DECLARES IT on the employees tax returns, and pays an additional amount to cover the taxes (or includes it in the “taxable income” part of the employee’s W2 and the employee is liable for the taxes). There are rules about giving executives of the company benefits that the rest of the employees don’t get. Also, Trump Org had two sets of books. That in itself is usually an indication of an attempt to defraud the government.

    And Trump signs EVERYTHING in that company. He’s next.

    Reply
    • larry Horist

      I am stunned at your lack of knowledge of fringe benefits and tax law. You obviously have never run a business where fringe benefits were involved. The payment of taxes on fringe benefits is on the person receiving the benefits — although a business could enhance the “gift” by providing the tax money, but that is very rare. While there are nuances, the point of my commentary is to suggest that the Weisselberg case could raise questions about a lot of others who get valuable personal benefits tax free. If Weisselberg is required to pay taxes on the apartment provided by the Trump Organization, why shouldn’t Mayor de Blasio pay for the personal use of Gracie Mansion. Many hotel managers get free apartments in the hotel… same as apartment building managers. Do those employees pay the tax on the value of the freebie? As the title suggests, this can be opening a can of worms. And that is the point you missed.

      Reply
      • Joe S Bruder

        Larry, I hope you don’t run a business like the Trump organization, you’ll end up in jail too. The IRS has rules governing benefits. Those rules DO NOT include having two sets of books. The CFO of a corporation should know those rules, or hire an accountant who does. They’re not that complicated. I had a consulting business, and my accountant would tell me what I could write off, what I couldn’t, and what benefits the company could pay for. And I only had ONE set of books.

        Elected officials are paid whatever the law allows. Almost every state has a place for the Governor to live. Trump also received free housing, but I don’t see you making a big deal about it. And the government also paid for Trump’s protection, but he didn’t pay taxes on that (instead, he made a profit off every golf trip he took, and likely didn’t pay taxes on that either). Some “perks” are necessary for the job. A guy living on an oil platform isn’t charged for his housing either, he has to be there as part of his job. But IRS rules are followed.

        Weisselberg made up his own perks, and kept two sets of books so that neither he nor the Trump organization paid the taxes on those perks. The IRS pretty clearly forbids that. If Trump had remained a relatively anonymous schmuck, they might have gotten away with it, but being President puts all aspects of his life under a microscope. And even more so when he refused to release his tax returns and went to court to prevent their release. The moral of the story (not that Trump has morals) is that you shouldn’t run for President if you’re a crook. Or “don’t fly too close to the sun”.

        Reply

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