President Trump should Pay a $5.6 Million Penalty on top of $2.8 Million in Restitution for Spending Money from his Charitable Foundation on Business and Political Purposes, the New York Attorney General, Letitia “Tish” James, told a Judge in seeking a Ruling without a Trial.
Neither Trump nor his Three Eldest Children, all of whom had Senior Roles at the Donald J. Trump Foundation, have provided Evidence Rebutting the State’s Claims that they Failed to Meet as a Board, Overseeing Grant-Making, or Implement Policies to Protect the Charity’s Funds from Abuse, New York Attorney General said in Court Papers Thursday.
"In this vacuum of oversight and diligence, Mr. Trump caused the foundation to enter repeatedly into self-dealing transactions and to coordinate unlawfully with his presidential campaign," James said, citing the Charity’s Internal Emails, Government Filings, and Admissions made under Oath.
A Judge is also weighing the State’s Request to Ban Trump from Serving on a New York Not-for-Profit for 10 years and Bar his Children for One year because of their Lack of Oversite, their Foundation's Function.
Under the Stipulation Agreement, the Trump Foundation will Dissolve and Submit to the Court a List of Non-for-Profit Organizations to Receive the Foundation’s Remaining Assets. The Attorney General and the State Court will need to Approve the Organizations.
Under the Provision of the Internal Revenue Code Governing Voluntary Termination of Private Foundation Status, a Dissolving Foundation can Distribute its Assets to established Charities. If a Private Foundation has Engaged in “willful repeated acts” or “a willful and flagrant act” resulting in Application of Private Foundation Excise Taxes, it can become Liable for the dreaded and confiscatory Termination Tax.
This Tax Equals the Lesser of:
(1) The Total Tax Benefits from Exemption to the Foundation and its Major Contributors.
(2) The Value of the Net Assets of the Foundation.
Calculating the precise Amount of the Termination Tax is Complicated and Technical. The First Option includes the Value to Substantial Contributors Donors of the Charitable Contribution Deduction. According to a Lawyer for the Trump Foundation, President Trump has Donated $8.250 Million and the McMahons Donated $5 Million to the Trump Foundation.
If we assume that they and no others were substantial Contributors, then the Termination Tax under the First Options would come to $3.3 Million.
For the Second Option, the New York Attorney General has represented to the Court that $1.75 Million of Assets remain in the Foundation. The Value of the Remaining Assets is likely to be the Lower of the Two Options and thus gives some sense of the Size of any Federal Termination Tax.
The New York Attorney took the Second Option but will Distribute the $1.75 Million.
Trump, who Claims the Case is Politically motivated, Agreed to Shut the Foundation under the Agreement.
The Case is People of the State of New York v. Trump, 451130/2018, Supreme Court of the State of New York, County of New York (Manhattan).
NYC Wins When Everyone Can Vote! Michael H. Drucker
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