President-elect Donald Trump’s charitable foundation transferred assets to a disqualified person, possibly Trump himself, according to a 2015 tax filing submitted to the nonprofit watchdog group GuideStar and posted online Tuesday.
Trump has been under heavy scrutiny in recent months for using tax-exempt foundation money to pay for personal expenses, such as legal settlements with governments and personal expenses, including paintings of himself.
On page five of the Donald J. Trump foundation’s 2015 tax filing, the preparers checked the “yes” box to the question about whether the New York-based nonprofit organization had transferred “any income or assets to a disqualified person (or make any of either available for the benefit or use of a disqualified person.”
The preparers checked yes again in another box that asked if the foundation had transferred money to disqualified people in previous years. Trump signed past filings under penalty of perjury, and the forms for several earlier years indicated the foundation had not transferred money to a disqualified person.
The IRS Manual states that transactions involving a disqualified person “bears importantly upon the treatment and status of exempt organizations as private foundations in several situations.”
It was unclear Tuesday whether the nation’s tax agency had received an identical document from Trump’s nonprofit. The IRS said it could not discuss any tax filing or comment on whether the tax agency was investigating the person or organization associated with a filing.
Trump presidential transition spokespersons also did not immediately respond to questions from USA TODAY.
However, the apparent admission of self-dealing “could be assessed as an IRS penalty against the person who received the benefit, potentially at three times the value,” said Robert McKenzie, a tax law expert who is a partner at the Arnstein & Lehr law firm in Chicago.
The IRS potentially could also seek penalties against the directors of the foundation — who include Trump and three of his children — “for allowing such a transaction,” said McKenzie.
However, attorneys for charitable organizations often are able to negotiate lower penalties than those proposed by the IRS, said McKenzie.
The foundation’s new admission could potentially result in separate penalties by state agencies that oversee the nonprofit, added McKenzie. New York Attorney General Eric Schneiderman had been conducting an examination of filings submitted by Trump’s charitable organization.
That investigation is continuing, Amy Spitalnick, Schneiderman’s press secretary, said Tuesday.
Schneiderman last month ordered the foundation to cease any fundraising in New York, saying the charity had not filed the required registration with his office.
The New York official also demanded, and received, written confirmation that the foundation would pay no part of the $25 million settlement reached last week over fraud allegations against Trump University — the now-defunct real estate training program created by the billionaire developer and reality television star.
According to Guidestar spokesperson Jackie Enterline Fekeci, the new tax filing was “was uploaded by a representative from Morgan, Lewis & Bockius LLP directly onto the foundation’s GuideStar Nonprofit Profile on November 18. We allow organizations to submit their 990’s voluntarily because sometimes the form’s route through the IRS causes a delay before we get the officially filed version. We do that in the good faith that the version they upload onto GuideStar is identical to the version they submit to the IRS.”
The Washington Post has reported in great detail about problems with the Trump foundation and its spending, citing how it paid $258,000 in foundation money to settle Trump’s personal legal issues. The Post was the first to report on the new filings Tuesday.
The 2015 tax filing showed that Trump’s company donated $566,370 to the foundation last year, while it received another $50,000 from Trump Productions LLC.
It’s possible these contributions came from Trump, because they listed the donations as coming from a “person.” These contributions are the first that Trump or his companies have made to Trump’s own charity since 2008. His foundation’s tax return for 2008 showed a $30,000 contribution from Donald J. Trump, care of The Trump Organization.
The foundation’s new filing also show the nonprofit received $150,000 from the British office of a foundation run by Ukrainian billionaire Victor Pinchuk, who owns four Ukrainian television stations and a variety of industrial companies. Pinchuk and his foundation were donors to the foundation run by former President Bill Clinton and his wife, former secretary of State Hillary Clinton, the defeated Democratic nominee for president, Clinton Foundation records show.
Trump spoke at a conference in Ukraine in 2015 hosted by Pinchuk. Then, according to a report in Politico, he said: “Viktor, by the way, is a very, very special man, a special entrepreneur. When he was up seeing me I said, ‘I think I can learn more from you than you can learn from me.’”
(h/t USA Today)
Trump Foundation 2015 990 form