Bidens Caught Funneling Millions Through Shady Loophole to Avoid Paying Taxes
Joe & Jill Biden set up S-corporations to dodge paying hundreds of thousands in taxes
Joe Biden and his wife Jill have been caught funneling millions of dollars of their income through shady S-corporations to avoid paying hundreds of thousands in taxes, according to reports.
The bombshell has emerged just days after Joe Biden, the Democrat presidential nominee, attacked President Donald Trump over his taxes.
According to a report by the Wall Street Journal’s Chris Jacobs, former Vice President Biden used a series of tax code loopholes to avoid paying taxes on millions of dollars of his family's income over the years.
In the Aug. 10 article, titled “How the Bidens Dodged the Payroll Tax,” Jacobs details how the Bidens structured “S-corps” to avoid paying hundreds of thousands of dollars in taxes they would have otherwise owed.
“Joe Biden responded to President Trump’s partial suspension of payroll-tax collections with a statement calling it the ‘first shot in a new, reckless war on Social Security,’” Jacobs wrote.
“‘Our seniors and millions of Americans with disabilities are under enough stress without Trump putting their hard-earned Social Security benefits in doubt’," Jacobs quoted Biden.
"Mr. Biden’s objections might be more persuasive had he and his wife, Jill, not gone out of their way to avoid funding seniors’ entitlement benefits," Jacobs continued.
"According to their tax returns, in 2017 and 2018 the Bidens and his wife Jill avoided payroll taxes on nearly $13.3 million in income from book royalties and speaking fees," he added.
"They did so by classifying the income as S-corporation profits rather than taxable wages.”
Of the nearly $13.3 million the couple took during the 2017 and 2018 tax years, they claimed just $750,000 in income.
The other 94 percent of the money passed through the corporations as direct distribution to the Bidens, preventing it from being subject to the 15.3 percent combined Social Security and Medicare tax rate, according to CNBC.
The nature of the business dictates what should be characterized as income and what can be a distribution to an employee shareholder as money generated from the business.
“But to the extent gross receipts are generated by the shareholder’s personal services, then payments to the shareholder-employee should be classified as wages that are subject to employment taxes [Social Security and Medicare],” IRS guidance reads.
Such is clearly the case with the Bidens.
The companies made money through their speaking fees and book royalties and apparently little, if anything, else.
Most if not all the compensation the couple received from the S-corps should have been in the form of income, subject to employment taxes.
Even left-wing journalist Ryan Grim, with The Intercept, during the heat of the Democratic primary race last year, highlighted the Bidens’ use of Delaware corporate law to shield their income from public scrutiny.
In response to the Times story, the president tweeted Monday morning, “The Fake News Media, just like Election time 2016, is bringing up my Taxes & all sorts of other nonsense with illegally obtained information & only bad intent."
The Fake News Media, just like Election time 2016, is bringing up my Taxes & all sorts of other nonsense with illegally obtained information & only bad intent. I paid many millions of dollars in taxes but was entitled, like everyone else, to depreciation & tax credits.....— Donald J. Trump (@realDonaldTrump) September 28, 2020
.....Financial Statements, from the time I announced I was going to run for President, showing all properties, assets and debts. It is a very IMPRESSIVE Statement, and also shows that I am the only President on record to give up my yearly $400,000 plus Presidential Salary!— Donald J. Trump (@realDonaldTrump) September 28, 2020
“I paid many millions of dollars in taxes but was entitled, like everyone else, to depreciation & tax credits,” he added.
Due to the nature of Trump’s business being primarily in real estate development, tax law does provide for significant tax credits, deductions, and depreciation to encourage entrepreneurs to take risks.
Trump’s oldest son, Donald Trump Jr., also addressed the Times story in an appearance on “Fox & Friends” on Monday, pointing to the development of the Trump International Hotel Washington, D.C., as an example for which his father received tax credits.
“My father’s paid tens of millions of taxes,” Trump Jr., said.
“If he does things in certain years where you get depreciation, where you get write-off, where you get historical tax credits, like we did when we took on the risk of building the Old Post Office in DC.”
The Old Post Office Building, originally constructed in the 1890s not far from the White House, reopened as a newly renovated Trump hotel in October 2016.
“That was literally a government contract,” Trump Jr. recounted.
“We bid against every hotel company in the world.
"Historical tax credits that you use to offset tax payments for taking the risk to build that.
"That was done under the Obama administration.
"It literally took an act of Congress to get it done.”
The president’s son further suggested that while his father’s federal income tax due may be low any given year, he still had to pay property taxes and payroll taxes (Social Security and Medicare) among others.
Trump Jr. also pointed out that his father put “thousands and thousands of people to work on an annual basis” through his various business ventures.
Those people pay taxes too.
The Times’ big scoop appears to be that a businessman took advantage of business tax deductions. And?