The Wall Street Journal contemplates “Hunter Biden’s ‘fair’ tax share” with the help of the testimony of the IRS whistleblowers released late last week. The Journal editorial bears on a number of issues including the Bide/Dem/left-wing mantra about “the rich” paying their “fair share” (what is it, by the way?) and the nature of the deal that the Biden Department of Justice has extended to Hunter. Here is the summary provided in the linked Journal editorial:
The agents reported that an IRS team in January 2022 finalized a document of some 80 pages recommending that Hunter be charged with tax violations for each of his six tax returns from 2014 through 2019.
IRS supervisory special agent Gary Shapley said Hunter’s 2014 and 2015 returns involved a “scheme to evade his income taxes through a partnership with a convicted felon.” At issue was the $83,000 a month Hunter received to sit on the board of Burisma, the Ukrainian energy company. The second (anonymous) whistleblower explained that in 2014 Hunter arranged a series of “sham” transactions so he “didn’t report any of the money he earned from Burisma”—about $400,000 in 2014.
The whistleblowers say Hunter directed Burisma to pay his money to Rosemont Seneca Bohai, or RSB, an entity owned by his business partner Devon Archer, who was convicted of fraud in 2018. They say RSB would send the money to Hunter, who then “booked it as a loan.” One obvious tax problem, explains the second whistleblower, is that “you can’t loan yourself your own money.”
Mr. Shapley says this loan ruse is a “textbook” evasion scheme, something “I learned at basic training.” When someone claims a payment is a loan for tax purposes, the IRS looks for three things: You’ve “got to have a promissory note, you got to have defined interest, and you got to have repayments,” Mr. Shapley says. In Hunter’s case, “none of those were included.” RSB also booked the payment as an “expense”—meaning that “even the two parties didn’t treat it the same way.”
The committee also released an email showing that another Hunter business partner, Eric Schwerin, told Hunter in 2017 that Hunter had “unreported Burisma income” and needed to “amend your 2014 returns.” Hunter ignored the warning and later that year ended his relationship with Mr. Schwerin.
The second whistleblower says 2014 records show RSB paid more than $10,000 in Hunter medical bills, and purchased a $142,000 Porsche for Hunter’s benefit via other money from a Kazakhstan businessman. The whistleblower says Hunter didn’t report this as income.
The IRS team recommended that Hunter be prosecuted on felony charges of tax evasion for 2014 and false tax filings and a misdemeanor charge for 2015 of failure to pay tax. Yet because the U.S. Attorney waited so long to make a prosecutorial decision, the six-year statute of limitations expired. Hunter thus won’t pay taxes on more than $400,000 in unreported income for these years. Mr. Shapley says: “The purposeful exclusion of the 2014 and 2015 years sanitized the most substantive criminal conduct and concealed material facts.”
Also notable are Hunter’s filings in 2018 and 2019, for which the IRS team also recommended felony charges of tax evasion and false returns. The second whistleblower testified that Hunter underreported his income for 2018 by anywhere from $267,000 to $500,000—depending on how conservatively the IRS counted. He did this, claims the whistleblower, by falsifying “business” deductions.
The whistleblower says this included deducting thousands paid to “no-show employees”—including “a prostitute” that Hunter claimed was a “West Coast assistant.” He deducted $10,000 for a “golf club member deposit,” money that IRS agents say “went to pay for a sex club.” He deducted $30,000 for a child’s Columbia University tuition. He also deducted a hotel room for who agents believed to be “one of his drug dealers,” hotel rooms for his girlfriend at the time, and two nights for “a hotel room for his dad, Joe Biden.”
The IRS agents say they also saw correspondence showing Hunter in that year attempting to describe income as a “loan”—though this time his accountants rejected the request. All told, the IRS team recommended that Hunter face felony charges for 2014, 2018 and 2019. They also recommended misdemeanor charges for “failure to file or pay” for five of the six years.
Whole thing here. See also Miranda Devine’s New York Post column “Heroic IRS whistleblower testimony ensnarls Hunter and Joe Biden in bribery scheme.”