New York Metropolis DA targets Trump group

The articles I wrote earlier for AccountingWEB all focus on different aspects of federal income tax. This one doesn’t; it focuses on New York City income taxes.

Why did I choose to replace federal taxes with local taxes? Because the New York Times had this page-one headline for July 2, 2021: “Trump Business Charged with ‘Swashbuckling’ Tax Fraud.” Directly below are the headlines for two articles by a reporter team: “Prosecutors describe 15 years in which they have hidden executive perks and bonuses ”and“ The ex-president’s image hits the heart ”.

The reporters reveal that Manhattan Attorney Cyrus R. Vance Jr. accused the Trump Organization of “running a 15-year program to help their executives evade taxes by compensating them with fringe benefits hidden from the authorities stayed ”. The prosecutor’s 15-point indictment dated June 30, 2021 said the organization’s longtime chief financial officer, Allen H. Weisselberg, taxed on $ 1.7 million in off-book perks that he should have reported as income , has avoided.

Reporters mention the CFO’s false statement that he does not reside in New York City, which reduces his liability for New York income taxes. He and his wife actually live permanently in a rent-free apartment in Manhattan.

One of the counts said the Trump Organization gave its CFO about $ 1.2 million in rent, utilities, and related expenses for the home over a 15-year period from March 31, 2005 to about June 30, 2021, the date the publication of the indictment.

More in a few paragraphs about the couple’s apartment and what I don’t think the reporters mentioned.

What the prosecutor has to do. Before delving deeper into the indictment, let’s discuss what the prosecution should do when jurors consider relatively mundane, minor offenses. The prosecution has to persuade them to convict a CFO who has failed to report benefits such as apartments, leased Mercedes-Benz and private school fees for his grandchildren.

Memory of the past. At the beginning of my career I worked for the IRS in several cities. One job was as a special agent in the Chicago office of the Criminal Investigation Division. Another was in Washington, DC, as an attorney deciding whether to deepen the proposed prosecutions or refer them to the Justice Department.

Based on my IRS experience, I believe the prosecutor will obtain a guilty verdict. Here’s why.

What a tangled web a CFO will weave when first practicing fooling on the New York State Form IT-201The jury will file all tax returns indicating liability for New York State and New York City taxes, an annual requirement they meet when they officially submit New York State Form IT-201, officially titled “Income Tax Return for.” Submit residents “.

Surprisingly, the reporters failed to mention that the CFO’s jury on IT-201 over something seemingly innocuous like where he lives could convince the jury to convict him. Here’s why.

The first page of IT-201 contains this undeniably simple question: “Did you or your spouse have any living quarters in NYC during the year in question”?

It asks the filers to check a “yes” box or a “no” box. At the top of the first page, the filers display their address.

The CFO has ticked “no” for the years named in the indictment. The Manhattan Attorney’s office has not yet disclosed what address he has shown for those years.

If so, will the address be in a manicured enclave in Westchester County that borders New York City to the north, for example? Or will it be a Westchester address for a disheveled dwelling that is on the wrong side of the tracks and borders a dump?

Whatever the CFO’s answer, there are no two opinions as to whether it will help the DA. Surely the DA will keep showing the jury the first pages of the IT-201s and only stop when: their eyes glaze over; they sink unconscious in their chairs; and the judge orders a break.

Other flagship items. This includes apartment rental agreements signed by the CFO and checks sent directly to the landlord by the Trump Organization. The organization used the perks to evade wage taxes; the CFO used them to evade New York City income taxes.

While the prosecutor is hypnotizing the jury, he has the option to remind them which addresses the CFO and his wife gave when they got things like driver’s license, insurance coverage for cars and other types of property, health insurance, bank and brokerage accounts, credit have applied for cards and top-up accounts. Ditto when the power couple signed up to vote, wrote wills, made doctor’s appointments or became parishioners in places of worship, to name just a few of the possibilities.

Vengeance is mine, says the (former) daughter-in-law. Another option available to prosecutors is to provide testimony from witnesses who communicated with the chief financial officer and his wife in their apartment. A sure witness is her estranged former daughter-in-law Jennifer Weisselberg.

She has provided the prosecutor with a plethora of documents relating to the finances of her former in-laws as well as her former spouse, Barry Weisselberg, a long-time employee of the organization. The ex-spouses are another couple who had a good life in a rent-free, organization-owned apartment.

Witness (unwittingly and involuntarily) for that Prosecution. Not all potential witnesses are estranged. Take the steadfastly loyal Donald Trump Jr., who posted a Facebook video confirming that his father paid the tuition fees for his chief financial officer’s grandchildren.

Jr.’s explanation of why dad did this: “He’s a good guy.”

Less egregious and not harmful. Brother Eric’s self-glorifying explanation of why he and his siblings are not afraid of the prosecution’s crosshairs: “We have always led amazingly clean lives.”