Monday, May 01, 2017

The $7 Billion favor?


Everybody hopes that when they make a contribution to a candidate they will elect someone who thinks as they do. And if the contribution is large enough, the candidate will think as they do on certain issues. Nobody has clearly defined the border between contributions and bribery, but when the payoff may be a ten figure number it would be safe to call it a bribe, if only there were a law against it.
The Internal Revenue Service is demanding a whopping $7 billion or more in back taxes from the world’s most profitable hedge fund, whose boss’s wealth and cyber savvy helped Donald Trump pole-vault into the White House.

Suddenly, the government’s seven-year pursuit of Renaissance Technologies LLC is blanketed in political intrigue, now that the hedge fund’s reclusive, anti-establishment co-chief executive, Robert Mercer, has morphed into a political force who might be owed a big presidential favor.

With Trump in the Oval Office, Mercer and his daughter Rebekah, who has become his public voice, seem armed with political firepower every which way you look – and that’s even though presidential adviser Stephen Bannon, their former senior executive and political strategist, appears to have recently lost influence.

Since the IRS found in 2010 that a complicated banking method used by Renaissance and about 10 other hedge funds was a tax-avoidance scheme, Mercer has gotten increasingly active in politics. According to data from the Center for Responsive Politics, he doled out more than $22 million to outside conservative groups seeking to influence last year’s elections, while advocating the abolition of the IRS and much of the federal government.

The Mercer Family Foundation, run by Rebekah Mercer, also has donated millions of dollars to conservative nonprofit groups that have called for the firing of IRS Commissioner John Koskinen, an Obama administration holdover whose five-year term expires in November.

IRS leader Koskinen has said publicly that he intends to finish his term. On his watch, the agency hasn’t been cowed by the Mercers.

The IRS recently released a little-noticed advisory stating that its top targets in future business audits will include so-called “basket options,” the instruments that Renaissance and some other hedge funds have used to convert short-term capital gains to long-term profits that have lower tax rates.

But Renaissance, with assets estimated at $97 billion on Dec. 31, 2016, has shown no signs of buckling to the IRS’s demands.

Nor has there been a hint as to whether Trump, a real estate developer who has refused to make his tax returns public, will intercede. The White House declined to respond to questions about the matter.

Richard Painter, chief White House ethics adviser under President George W. Bush, said the optics surrounding the Mercers’ political connections and the IRS case “are terrible.”

“The guy’s got a big case in front of the IRS,” said Painter, now a University of Minnesota law professor who is also vice chairman of Citizens for Responsibility and Ethics in Washington. “He’s trying to put someone in there who’s going to drop the case. Is the president of the United States going to succumb to that or is he not?”

“Are we going to have a commissioner of the IRS who aggressively enforces the law and takes good cases to Tax Court or (somebody who) just throws away tax cases so billionaires don’t have to pay their taxes and the rest of us can pay more taxes?”
I think we can be certain that Trump will stumble into an open quid pro quo on this unless his Goldmine Sachs boys Mnuchin and Cohn address this problem as quietly as you can when dealing with $7 Billion. Make no mistake, The Tangerine Shitgibbon and his minions are dedicated to transferring the tax burden off the oppressed hedge funds and onto the smaller taxpaying takers.

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