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naraburns  nihil supernum  1yr ago (text post)   35016 thread views

Culture War Roundup for the week of April 3, 2023

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I think someone who claimed a hooker payoff as a business expense on their taxes would be prosecuted for tax fraud if they had powerful enemies, which Trump does. But that would be a federal charge, and Merrick Garland is playing his cards close to his chest.

This particular indictment is driven by Bragg's ego and desire to advance in NY lefty politics, not by a desire to convict Trump. Hence the weak charges - Trump is guilty of a lot more serious crimes than misrecording the Stormy Daniels hush money, but nothing that is both media-friendly and chargeable in New York state court.

I suspect the federal indictments will be less bullshit and will include serious crimes of which Trump is actually guilty.

But that would be a federal charge,

Surely his company also pays state taxes.

I was responding specifically to the OP's claim; the reports I have seen have referenced business records, which might be something other than taxes.

I am not convinced that "legal expenses" is technically a false statement. How should he record payments to people when they sign NDAs?

We of course don't know yet precisely what the allegations are, but this does not strike me as particularly convincing. I would think that "legal expenses" are expenses paid for legal services. Why should payment pursuant to an NDA be a "legal expense" if payment pursuant to other contracts are not? Note that I am not arguing that Trump is or is not guilty, nor that the prosecution is or is not legitimate.

I would read "cost incurred in connection with" etc as costs related to negotiation, etc, etc, etc, but not the payment of the settlement itself. Just as legal costs (and attorneys fees, when available) are awarded to plaintiffs separately from the underlying recovery.

Edit: As it turns out, the DA's factual allegations are here. It claims:

The Defendant, the TO CFO, and Lawyer A then agreed that Lawyer A would be paid the $420,000 through twelve monthly payments of $35,000 over the course of 2017. Each month, Lawyer A was to send an invoice to the Defendant through Trump Organization employees, falsely requesting payment of $35,000 for legal services rendered in a given month of 2017 pursuant to a retainer agreement. At no point did Lawyer A have a retainer agreement with the Defendant or the Trump Organization.

In early February 2017, the Defendant and Lawyer A met in the Oval Office at the White House and confirmed this repayment arrangement.

On or about February 14, 2017, Lawyer A emailed the Controller of the Trump Organization (the “TO Controller”) the first monthly invoice, which stated: “Pursuant to the retainer agreement, kindly remit payment for services rendered for the months of January and February, 2017.” The invoice requested payment in the amount of $35,000 for each of those two months. The TO CFO approved the payment, and, in turn, the TO Controller sent the invoice to the Trump Organization Accounts Payable Supervisor (the “TO Accounts Payable Supervisor”) with the following instructions: “Post to legal expenses. Put ‘retainer for the months of January and February 2017’ in the description.”

Lawyer A submitted ten similar monthly invoices by email to the Trump Organization for the remaining months in 2017. Each invoice falsely stated that it was being submitted “[p]ursuant to the retainer agreement,” and falsely requested “payment for services rendered” for a month of 2017. In fact, there was no such retainer agreement and Lawyer A was not being paid for services rendered in any month of 2017.

So the books and records of the Trump Organization show the payments to Cohen (which would ultimately go to Stormy Daniels) as a corporate legal expense. That would end up being claimed as a business expense on the corporate tax return.

I think you could argue that Cohen negotiating a hush money agreement with Stormy Daniels was legal work, in which case he could bill the actual hush money as a disbursement, and paying a lawyer's bill including disbursements could be included as a "legal expense" in the accounts. But it would be the Trump Organization paying Trump's personal legal expenses, which would need to be accounted for as an employee fringe benefit. I am not familiar with US tax law, but in the UK that would be taxable on the employee (i.e. Trump).

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