Donald Trump banner hanging at the Department of Justice building in Washington, D.C.
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Two official government tax moves an ocean apart provided good tax results for the celebrities involved. But while the European one was based on strict tax law, the U.S. decision took a more political detour.
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The global tax gods apparently got together and decided this week to make the financial lives of some wealthy celebrities easier.
Yes, I am talking about Donald J. Trump and Shakira. Both got good tax news from, respectively, the Internal Revenue Service and a Spanish court.
The IRS will end pending tax investigations against Trump. Plus, he also might be able to take advantage of a new compensation fund created after he ended his legal action against Uncle Sam’s tax collector.
Shakira is no longer considered a global tax evader. The popular singer also is getting back more than 55 million euros ($64 million) in tax fines a court ruled were wrongly imposed by Spain’s tax authority.
Trump’s settlement fund: Since I’m a U.S. citizen and the ol’ blog focuses on our tax code, let’s start with Trump’s nearly $1.8 billion slush anti-weaponization fund, officially announced by acting Attorney General Todd Blanche.
Yes, the Anti-Weaponization Fund is the official name of the account. It is detailed in a nine-page agreement.
Yes, it will be, per Blanche, used to compensate “victims of lawfare and weaponization.” This includes, but apparently is not limited to, election-denying supporters of Trump who attacked the U.S. Capitol and members of Congress on Jan. 6, 2021, to stop the certification of President Joe Biden’s election.
And yes, the fund’s exact amount is $1.776 billion, yet another Trump attempt to recharacterize that throng of insurrectionists, known as J6ers, as patriots.
Tax audits evaporate: Then there’s the tax icing on the monetary cake. Trump et al are off the hook for pending IRS audits.
A tax-related one-page fund document was posted on the DOJ website this afternoon, conveniently after Blanche was grilled by the Senate Appropriations Committee.
The fund addendum says the IRS is “FOREVER BARRED AND PRECLUDED” (yes, it is in 47’s customary all capital letters) from pursuing examinations (which readers of the ol’ blog know is tax speak for audits) of Trump, “related or affiliated individuals (including, without limitation, family or others filing jointly),” and Trump-connected trusts and businesses.
So there you have it. Today, the United States’ legal arm formally decreed what until now had just been a truism that all us little people who pay taxes already knew. The rich and powerful get better, special treatment, including when it comes to taxes.
That means those of us without any special protection against prying IRS eyes might want to check out my post on audit red flags.
Fund specifics, future: Not surprisingly, the Trump lawsuit settlement document creating the fund does not go into specifics as to its operation. But it does raise more questions.
Will the fund actually stand? Or will Capitol Hill Democrats who universally decried the move, as well as some “concerned” Republicans, be able to require Congressional approval of the account?
Some legal eagles also question whether the fund might be more problematic than its creators foresaw. At least government attorney, Treasury’s general counsel Brian Morrissey, quit immediately after the deal was announced.
Philip Allen Lacovara, former deputy solicitor general of the United States and counsel to the Watergate special prosecutor, it may prove “too clever by half” for the officials who contrived it. In a column for Bloomberg Law, he says the fund will expose DoJ lawyers to fraud charges.
If the fund does proceed, will J6ers who were pardoned by Trump and subsequently charged and/or convicted of other crimes be eligible to apply for payments?
As for Trump, will he and his family and businesses qualify for compensation? Trump has repeatedly contended he is the victim of malicious lawfare. Could the board, whose members he will be able to fire, decide to award/reward him, too? My gut says, of course!
Although the account is set to expire on Dec. 15, 2028, will a future Democratic administration attempt to recover any payouts? It could, if the Party finally decides to quit following polite guidelines and guardrails and instead uses the road map that Trump’s two terms have laid out on how to get what a White House wants.
Plus, there’s that pesky absolute presidential power the Supreme Court of the United States granted.
Finally, and sadly, will we even care about this tomorrow? Or will a new outrageous action by this administration bump the $1.776 billion taxpayer-funded account from the headlines and our concerns?
Shakira acquitted: Now to a tax matter with less constitutional crisis implications for U.S. taxpayers, but of import to Shakira fans here and worldwide.
A Spanish court acquitted the Columbian superstar in the long-running tax fraud case first brought against her in 2018. Plus, the court order the government to return more than 55 million euros ($64 million) in wrongly imposed fines.
Shakira’s good tax news was based on actual tax law, unlike the political machinations in Trump’s case. The court finding for the singer came down to Spanish prosecutors’ inability to prove Shakia spent enough time in that country to owe it taxes.
A person is considered a tax resident of Spain if that individual spends more than 183 days in the country. The court found that Spanish authorities were only able to prove that Shakira lived in Spain in 2011, the tax year in question, for a total of 163 days.
The singer, whose full name is Shakira Isabel Mebarak Ripoll, had argued throughout the proceedings that Spanish tax authorities had taken action against her simply because she was dating Barcelona-born footballer Gerard Piqué, with who she shares two sons. The pair split up in 2022.
Shakira’s Valentine’s Day Instagram post in 2022 with Gerard Piqué in happier times.
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With the tax dispute settled, Shakira can focus on her FIFA World Cup “halftime” performance.
You also might find these items of interest:
- IRS emphasizes its commitment to taxpayer privacy
- IRS apologizes to billionaire whose tax info was leaked
- Former IRS consultant pleads guilty to stealing and sharing Trump (and others) tax data
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