Patterico's Pontifications

4/8/2019

Yes, Rich People Get Away with Tax Fraud for Years

Filed under: General — Patterico @ 9:26 pm



Again and again, I see Trump fans telling us that there can’t be anything illegal in his returns, because if there was, the IRS would have caught it by now — and also, he hired accountants, and they never knowingly participate in fraud!

If you weren’t viewing this through a partisan lens you’d already be laughing, because these arguments are very, very silly. But I’m not mischaracterizing them. They are stated in the comments again and again, by people like a commenter named Dana who is most assuredly not the guest blogger Dana:

Mr Trump is a billionaire, and the Infernal Revenue Service scrutinizes, and frequently audits, the returns of billionaires. Do you believe that the IRS under Barack Hussein Obama didn’t look very carefully at Mr Trump’s tax returns once he declared himself to be a candidate?

Billionaires don’t just file with TurboTax, but have accountants, plural, doing their returns; do you believe that professional accountants, some of who are CPAs, are going to file anything that is criminal? That will cost them their licences [sic], and might get them thrown in jail as well.

Here is Ingot9455:

When we want to look at Trump’s tax returns, are we looking for illegal actions, or are we looking for opposition research purposes?

If it’s for illegal actions, New York’s tax people and the Feds audit high earners every year to a greater or lesser degree. New York especially. You’re unlikely to find anything grossly illegal.

And here is steveg:

The NYT makes Trump sound shifty, but if it was legal… and if the IRS didn’t jump on them, it probably was legal at the time. If it was legal enough for the IRS to pass on.

Also it must be good enough because the IRS and the state of NY are still passing on it.

Or Kevin M:

[Trump has] been subjected, every year to audit after audit at both the state and federal level. Just as no one put a gun to his head to sign those returns, no one put a gun to the IRS’s head to sign off on them either. But they did. How many bites at the apple do they want?

The logic is repeated again and again: if the IRS hasn’t done anything to you, and you’re rich, it probably means you paid all your taxes. Because government catches everybody, right away!!

Well.

Depending on who’s telling the story, Bernie Madoff’s Ponzi scheme began in the 1970s (according to federal investigators) or the 1990s (according to Madoff). I doubt Madoff used TurboTax. He was very, very wealthy, and got away with this for years. Not only did the SEC sign off on his Ponzi scheme for years, but the IRS signed off on his returns! And yet:

During the fraud trial of five Madoff staffers accused of profiting off Madoff’s epic $65 billion Ponzi scheme, prosecutors revealed an IRS analysis showing that the 75-year-old mega-scammer, who is serving a 150-year federal-prison sentence, was a tax deadbeat to the tune of $242.9 million for the years 1993 through 2007.

He reported only $183.5 million in taxable income over the ­period when he should have listed $829.1 million, according to an analysis of Madoff’s federal tax filings and testimony by IRS agent Margo Dabnee.

How about that. Oh hey, and Frank DiPascali, a top Madoff official, knew for years about the Madoff fraud, and drew millions in phony salaries for years and years. He probably did not use TurboTax. He was very wealthy, and got away with this for a very long time. He was ultimately convicted of tax evasion — years and years and years later. After the IRS had signed off on his returns for years.

Paul Manafort got away with tax evasion for years, until he painted a target on his back by becoming Trump’s campaign manager while also having had a very visible career as a lobbyist for folks like Ukranian dictator Viktor Yanukovych. I’m pretty sure Manafort did not use TurboTax. He was very wealthy, and the IRS signed off on his returns for years.

I could go on and on and on and on and on. These are just examples that leap to mind. But I’ll put the power of the commentariat to work, and invite you to come up with many other examples of people who got away with tax evasion for years. Rich people — very rich people — employing multiple accountants, plural, and not using TurboTax.

Under the logic proffered by my commenters, at any point in these folks’ lives up until the time they were arrested, we could confidently conclude that they had done nothing wrong. Why? Because they were very rich, had fancy accountants sign off on their tax returns, and had not (yet) been arrested or prosecuted.

Never mind all the red flags. Do you believe that the IRS didn’t look very carefully at these people? The SEC investigated Madoff multiple times and found no wrongdoing, over and over again. Because the government doesn’t always catch people. And when they do, it sometimes takes them waaaaayyyyy too long.

This is true even if the tax cheats and fraudsters don’t use TurboTax, but have accountants, plural, doing their returns. Do I believe that professional accountants, some of who are CPAs, are going to file anything that is criminal? Of course I do!!! because I was not completely asleep during the financial crisis, and I am aware that accountants sign off on shady and even totally illegal shenanigans all the time. All. The. Time. Sometimes they even plead guilty for it!

As for the wonderful accountants that Trump must have hired, if they are anything like the other “professionals” he has hired, like his quack of a doctor, or his crooked lawyers, then yeah: I’d certainly believe they’d sign off on fraud. Indeed, we know that accountants signed off on laughable financial statements, while larding them up with caveats saying, in essence: these financial statements are a joke and you should not take them seriously.

Stop making this argument. It does not fly. Not even remotely.


Powered by WordPress.

Page loaded in: 0.0536 secs.