Help me understand how this works?

[ATSMAN]

The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992. All County’s ostensible purpose was to be the purchasing agent for Fred Trump’s buildings, buying everything from boilers to cleaning supplies. It did no such thing, records and interviews show. Instead All County siphoned millions of dollars from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions, effectively untaxed gifts, then flowed to All County’s owners — Donald Trump, his siblings and a cousin. Fred Trump then used the padded All County receipts to justify bigger rent increases for thousands of tenants.

So if a family owned corporation (A) is engaged in the business of purchasing building supplies for corporation (B) which has no ownership interest in corporation (A) and the product is sold at a markup it becomes illegal?? How does this work for closely held companies?

[MDEA]

It is not illegal. This is the way to move the money. All county paid tax on their profits no one says how much money you can make. It was also away to raise rents in rent controlled buildings.

[kathyc2]

I'm not sure if it's illegal or not, but if not it should be. The way I understand it, Donald had increased taxable income on the inflated transactions and Fred had a deduction of taxable income. If they were both in same bracket it would be a wash to them. Transferring money from Fred to Donald should have been subject to gift tax but because of this was not. Add to this at Fred used the inflated transaction purchases to the gov't body to increase rent in NYC's rent controlled environment. In short, it appears that both the Treasury and renters were defrauded.

[ATSMAN]

False, Fraudulent, or Missing Returns: No IRS Statute of Limitations

It is also important to note that no deadline applies where the IRS can establish that a taxpayer has: 1) filed a false or fraudulent return; 2) willfully attempted to evade tax; or 3) failed to file a return. Unlike the circumstances above where tax returns are filed (even with errors), these are cases in which a taxpayer is willfully or intentionally not filing taxes or is filing fraudulent return(s). Not only will there be no time limit on IRS action against such taxpayers, but heightened interest fees and penalties will apply.


Will any of these exceptions to the statute of limitations apply if IRS/NY DOR decides to open up an investigation?

[TAXNJ]

The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992. All County’s ostensible purpose was to be the purchasing agent for Fred Trump’s buildings, buying everything from boilers to cleaning supplies. It did no such thing, records and interviews show. Instead All County siphoned millions of dollars from Fred Trump’s empire by simply marking up purchases already made by his employees. Those millions, effectively untaxed gifts, then flowed to All County’s owners — Donald Trump, his siblings and a cousin. Fred Trump then used the padded All County receipts to justify bigger rent increases for thousands of tenants.

So if a family owned corporation (A) is engaged in the business of purchasing building supplies for corporation (B) which has no ownership interest in corporation (A) and the product is sold at a markup it becomes illegal?? How does this work for closely held companies?

Your post is interesting and would like to get more information.

What fraud case did you find and referring to when you state "The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992." Can not seem to find that case.

Your first paragraph list a number of facts such as "untaxed gifts" and "padded receipts", did those facts lead to and supported the "The most overt fraud...." case?

What did the IRS and state audits reveal ? If tax returns were filed, what happened to the defendants such as tax preparers, auditors, accountants and attorneys involved ?
Also, what was the courts decision?

It would be an interesting read if you can share where one can find the case.

Thanks

[ATSMAN]

>> What fraud case did you find and referring to when you state "The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992." Can not seem to find that case.

Your first paragraph list a number of facts such as "untaxed gifts" and "padded receipts", did those facts lead to and supported the "The most overt fraud...." case?

The first para of the original post was taken from the NY Times report. I simply posted it and wanted others to help me understand? I am sure you and others may have already read the report by now. Do you think false or fraudulent were filed that may lead to no statutes of limitations?

[TAXNJ]

>> What fraud case did you find and referring to when you state "The most overt fraud was All County Building Supply & Maintenance, a company formed by the Trump family in 1992." Can not seem to find that case.

Your first paragraph list a number of facts such as "untaxed gifts" and "padded receipts", did those facts lead to and supported the "The most overt fraud...." case?

The first para of the original post was taken from the NY Times report. I simply posted it and wanted others to help me understand? I am sure you and others may have already read the report by now. Do you think false or fraudulent were filed that may lead to no statutes of limitations?

No, did not read about it. Thought and hoped it was a legal case to reference. As far as you question above "Do you think false or fraudulent were filed that may lead to no statutes of limitations?" hard to tell without seeing the tax returns, records and performing actual audits, etc.. Otherwise, think it would be just guessing on an article that maybe a waste of time (and money). Did the article talk about if any audits that were taken place?

As far as the "statue of limitations", in general, as you may know, the statute of limitations to prosecute for tax fraud is between three and six years; however, there are no limitations on civil tax fraud prosecutions.

Reply poster MDEA has an interesting reply "It is not illegal. This is the way to move the money. All county paid tax on their profits no one says how much money you can make. It was also away to raise rents in rent controlled buildings."

If it is not "illegal", it may have been great tax planning if "allowed & within the law" by the Professional Accountants and Lawyers in the best interest of their clients as Professionals do.

[Twin Turbo Z]

Another witch hunt ? Just kiddin !!!

[ATSMAN]

Another witch hunt ? Just kiddin !!!

Just saw an update that NYS and NYC authorities have formally launched an investigation. IRS may not show any interest but I doubt NYS will let it go that easily!