In the mid-1980s, both Donald Trump and I lived in New York City and ran businesses, and we were both trying to hide money from the IRS.
The Trump family (and other billionaires, no doubt) were hiding their income by creating shell companies, paying their three-year-old children salaries and inflating their business expenses, among other dicey schemes to evade taxes. And according to the New York Times, Trump’s tax returns from 1985 to 1994 show $1 billion in losses which he used to avoid paying any taxes for ten years.
I was a poverty-stricken freelance writer who made about $14,000 that year. Trump wasn’t audited, but I was and I had to prove every penny. I had padded my business expenses for office supplies, business dinners, transportation and other expenses — and lacked sufficient receipts. I was in big trouble.
At the time, the IRS was still a well-staffed agency with lots of auditors. I guess they needed something to do, but instead of going after businesses who wrote off millions like the Trumps — and who had lawyers and accountants to protect them — they harassed small fry like me.
I’d always been a lousy record-keeper, so when I got the notice stating that I was being audited I went into panic mode. Unlike rich people, I was terrified of the IRS. I was sure I was going to jail. I’d never bothered to keep receipts of every penny I spent so I just estimated — on the high side. I went through all my receipts for that year and knew I didn’t have anywhere near the amount I needed to prove all those deductions were legitimate.
So, what did I do? No, I did not hire Michael Cohen to hide my assets because I didn’t have any assets. Instead, I called all my writer friends and asked if they would lend me their receipts for that year. Somehow I managed to amass the pitiful couple of thousand dollars in receipts to prove the deductions I needed to satisfy the auditor, but it took weeks, and a lot of begging and cooperation from my friends, who, as freelancers themselves, understood my dilemma.
I got off that time because I managed to come up with sufficient receipts, but others weren’t so lucky.
“I also went through one of those disgusting audits,” a Facebook friend wrote. “I lived in New York and was running my design company. I had just had a traumatic accident and my leg was all wrapped up and in a cast. I was in excruciating pain and had to sit there for three days looking at this young woman going over thousands of receipts. In the end she found that I owed $150 due to a math mistake.”
I was told by my tax preparer who specialized in freelancers that the IRS was going after people like me, who reported very little income. Maybe they couldn’t believe anyone was actually living on such a pittance in New York City, so they were looking for unreported income. While they were at it, they combed through deductions.
I have bemoaned staff cuts to many federal agencies since Donald Trump has been in office. Cuts to environmental protection, housing, healthcare, food stamps and the arts are unconscionable. However, I have quietly cheered the de-funding of the IRS. Their track record in prosecuting and recovering money from the rich is pitiable. What they are good at is making life hell for the poor who claim an earned income credit for their kids, small business owners, artists and other middle class folks.
It’s ironic that Trump’s followers are cheering him for evading taxes. Even if they have to pay through the nose, at least their hero is smart enough to foil the tax collector. This is profoundly twisted logic but it makes a kind of sense when you consider how the IRS hounds the working class while the rich escape every time.
Did I learn anything from my audit? Yes, the same thing Trump knew all along — that I needed to hire a decent accountant to file my taxes so they were less likely to be flagged by the IRS.
Kudos to the Times for exposing the truth. Trump’s number seems to be finally coming up. Al Capone went away for eleven years for tax evasion. Unlike Capone, Trump actually filed returns, but they are laughable. $70,000 for hair care, indeed!
It’s time for the IRS to redeem their sorry asses by pursuing Trump for what he owes. Hint: It’s a lot more than $750.