Tax expert: there is a lot to find in returns

[struggle4progress]

Feb. 7, 2019, 6:16 PM EST
By Heidi Przybyla

WASHINGTON — President Donald Trump exhibited “aggressive tax planning” prior to his 2016 election and “could have eliminated his taxes for a couple of decades” by claiming millions in business-related losses, tax expert Steven Rosenthal told a congressional panel Thursday.

“There is a lot to find,” said Rosenthal, a senior fellow at the nonpartisan Tax Policy Center who has scrutinized portions of Trump’s 1995 and 2005 returns last year in partnership with the New York Times ...

https://www.nbcnews.com/politics/congress/tax-expert-tells-congress-there-lot-find-trump-s-tax-n969121

[struggle4progress]

1. Pelosi Urges Patience

February 7, 20195:00 AM ET
KELSEY SNELL

... Pelosi told reporters on Thursday that she knows "there's this impatience" to see the full picture of Trump's finances but Democrats have to proceed carefully. "It's not a question of just sending a letter," Pelosi said. "You have to do it in a very careful way."

Her comments helped moderate expectations ahead of the first official hearing into the legislative proposals on presidential and vice presidential tax returns. The academic panel and narrow scope of the hearing before the House Ways and Means Subcommittee on Oversight were far from the explosive investigation into Trump's finance that some progressive Democrats have demanded ...

https://www.npr.org/2019/02/07/692108591/house-democrats-divided-on-strategy-to-force-release-of-trumps-tax-returns

[Stargazer09]

2. 45 went to great lengths to hide them

Having a tax expert weigh in just confirms what we’ve suspected all along.

Innocent people don’t need to hide their tax returns.

[customerserviceguy]

3. I used to be a tax accountant

back in the Eighties, and while I don't keep up with it anymore, I do know that loss carryforwards used to go for up to fifteen years. Most times, a true loss of previously taxed income is involved, but there are still enough loopholes out there for paper-only losses to exist and be carried forward.

[BigmanPigman]

4. Does that mean his tax guy messed up

or the fucking moron did?

[customerserviceguy]

5. It's not a matter of messing up

It's a matter of being able to use things perhaps legally that carry some bad optics with them. It would run counter to Trump's whole "man of the people" shtick.

[BigmanPigman]

6. OK, I think I get it now.

[customerserviceguy]

7. High rollers

want aggressive tax strategies. I used to hear about tax accountants getting fired after an audit showed "nothing wrong". The thinking is, if the IRS catches three or four things, there are probably five or six things we're getting away with.

I have no doubt that Trump has that as the standard for his tax people.

[BigmanPigman]

8. It's like they are playing games with each other.

I always do my taxes with my dad (standard 1040, no deductions or itemizing) until I got the ACA with tax credits and it became more complicated. My dad always had a theory that you ,ail your returns about 10 days before they are due. This way the IRS has a lot to go through all at once so they won't be super picky and not late enough to make them suspicious. "You have to think like the IRS" is the his plan.

[customerserviceguy]

9. His advice was good

I've been out of the tax accounting business for nearly thirty years now, and don't keep up with it, but I did know how they used to pick returns to audit. Each item outside of a person's own standard deduction and personal exemption got a "score", based not only on how much of a deduction was being claimed, but the propensity for being denied at audit.

For instance, a home mortgage interest deduction might be very high, but if it was paid to a financial institution which issued a form (1098, if I recall correctly), that was probably not worth auditing. If the mortgage payment was to an individual (say, a seller who took back a mortgage from a buyer, something that happened fairly often in the 1980's), that was more worthy of being audited, especially since the seller had to declare the interest as income, and if the figures did not agree, somebody was getting an adjustment made to their tax burden.

As the filing season went on, and the IRS accumulated tax returns that had been flagged by the computers for their scores, they kept cranking up the number needed to wave the flag. It was believed that by the time they got to the end of the second extension period, about October 15th, that the program had been cranked up to its highest, and I advised my clients with the most complicated returns more likely to get audited to use that strategy.

I never had one of them audited, who followed that advice. But, the return had to be "timely filed", with extensions properly done (I included photocopies of the extensions along with the paper-filed returns we used in those days), because late filing itself adds to the score. Somebody who couldn't get their act together before they filed is more likely to either have made a mistake or take a risky deduction.

[BigmanPigman]

10. I'll pass that onto my dad.

He fell and hit his head and is in the hospital getting tests (on his 85th birthday too) so this will make him smile. Thanks!