New York Occasions, A Shock Accusation Bolsters a Dangerous Case In opposition to Trump:

The unsealed indictment towards former President Donald J. Trump on Tuesday laid out an surprising accusation that bolstered what many authorized specialists have described as an in any other case dangerous and novel case: Prosecutors declare he falsified enterprise information partially for a plan to deceive state tax authorities.

For weeks, observers have puzzled in regards to the precise costs the Manhattan district legal professional, Alvin L. Bragg, would convey. Accusing Mr. Trump of bookkeeping fraud to hide marketing campaign finance violations, many believed, might increase vital authorized challenges. That accusation turned out to be a significant a part of Mr. Bragg’s concept — however not all of it.

“Pundits have been speculating that Trump can be charged with mendacity in regards to the hush cash funds to illegally have an effect on an election, and that concept rests on controversial authorized points and may very well be arduous to show,” mentioned Rebecca Roiphe, a New York Legislation Faculty professor and former state prosecutor.

“It seems the indictment additionally features a declare that Trump falsified information to commit a state tax crime,” she continued. “That’s a a lot less complicated cost that avoids the potential pitfalls.” …

additionally it is a criminal offense to submit false data to the state authorities. At one other level Mr. Bragg appeared to place ahead an alleged plan to deceive tax authorities — an intention to say Mr. Cohen had earned revenue for “authorized providers carried out in 2017” to launder what was in actuality a reimbursement — as a stand-alone offense.

Along with protecting up campaign-finance crimes dedicated in 2016, Mr. Bragg mentioned: “To get Michael Cohen his a refund, they deliberate one final false assertion. With a purpose to full the scheme, they deliberate to mischaracterize the repayments to Mr. Cohen as revenue to the New York state tax authorities.”

Within the courtroom, the prosecutor Christopher Conroy accused Mr. Trump of inflicting the Trump Group to create a sequence of false enterprise information, including that he “even mischaracterized for tax functions the true nature of the cost.”

That prosecutors cited the potential of deliberate false statements on tax filings struck some authorized specialists as significantly vital, given the hypothesis over how bookkeeping fraud costs would rise to felonies.

“The reference to false tax filings could save the case from authorized challenges that will come up if the felony costs are predicated solely on federal and state election legal guidelines,” mentioned Ryan Goodman, a legislation professor at New York College.

Jack Bogdanki (Lewis & Clark), Is Trump Like Conway Twitty?:

I do not know diddly about New York State tax legislation, however on the idea that it is quite a bit like federal tax legislation, which I do know one thing about, I am nonetheless questioning how mislabeling the funds to the lawyer, Michael Cohen, would have helped Trump on his taxes. Particularly, I’m questioning, would not he have been capable of deduct the hush cash even when he instructed the reality about what it was? …

 I am not seeing something within the federal tax legislation that particularly denies a enterprise deduction for a hush cash cost to a personal particular person. Now, after all, to take a deduction, there must be a connection to your commerce or enterprise, however could not Trump present that? By paying off Daniels, McDougal, and the doorman, he arguably would have prevented harm to his marketing campaign, and to his model. Presumably he has made much more cash as President and former President than he would have made if he had misplaced to Hillary Clinton.

Paying cash to guard your enterprise fame could give rise to a tax deduction. There have been a number of outstanding circumstances through which the IRS has challenged such deductions, however the authorities’s success price in these circumstances is lower than 100%.

One case they misplaced concerned nation singer Conway Twitty, whose actual title was Harold Jenkins. He opened a series of eating places named Twitty Burger, they usually bombed. To keep away from harm to his fame within the music business, he paid the traders again, though he did not must, as a authorized matter. The Tax Courtroom allowed Twitty a enterprise deduction. The decide wrote, partially:

Though, as [the IRS] argues, the possibilities of a profitable lawsuit towards Conway Twitty by any of the traders or the Securities and Change Fee was distant we agree with [Twitty] that the potential of intensive opposed publicity regarding [his] involvement with the defunct company and the resultant lack of the traders’ funds was very actual. We don’t imagine it’s mandatory for us to seek out that opposed publicity emanating from Conway Twitty’s failure to repay the traders in Twitty Burger would have ruined his profession as a rustic music singer. Somewhat, we want solely discover {that a} proximate relationship existed between the funds and [Twitty’s] enterprise. We discover that such relationship exists. 

Given this precedent, it is arduous for me to see how Trump would have been denied a deduction for hush cash funds, even when he instructed the reality about them. Now, once more, that is underneath federal tax legislation, not New York State tax legislation. However I am not coming away with a great feeling in regards to the prosecution’s place right here.

https://taxprof.typepad.com/taxprof_blog/2023/04/the-trump-indictment-tax-law-and-conway-twitty.html