Joe Biden and fellow Democrats loved to make a major brouhaha over Donald Trump’s alleged income tax abuses. But, according to a recent government report, President Biden may owe as much as $500,000 in back taxes!
It is being reported that a new nonpartisan report indicates President Biden improperly avoided paying Medicare taxes before he took office — raising eyebrows and the possibility that he owes the IRS as much as $500,000 in back taxes.
Biden is leading a Democratic push for a $3.5 trillion bill to subsidize childcare, education, and health care by targeting tax avoidance and raising tax rates on higher incomes so the rich “pay their fair share.”
A House Ways and Means Committee draft of the bill would end the accounting trick apparently exploited by Biden and boost IRS funding for audits — but the new report, drafted by the Congressional Research Service and provided to The NY Post, suggests Biden owes taxes under current rules, according to the congressman who requested it.
“Joe Biden wants to raise taxes by $2.1 trillion while claiming the rich need to pay their ‘fair share.’ But in 2017, multimillionaire Joe Biden skirted his payroll taxes — the very taxes that fund Medicare and Obamacare,” said Rep. Jim Banks (R-Ind.), chairman of the conservative Republican Study Committee.
“According to the criteria CRS provided to my office, he owes the IRS and the American people hundreds of thousands of dollars in back taxes,” Banks said. “Every American should know about Joe Biden’s tax hypocrisy.”
Banks said the report shows Biden improperly used “S corporations” to avoid paying Medicare tax on speaking fees and book sales in 2017 and 2018.
Biden and first lady Jill Biden routed more than $13 million through S corporations and counted less than $800,000 of it as salary eligible for the Medicare tax — exempting the rest from what would have been a 3.8 percent rate, the Wall Street Journal reported.
The CRS report doesn’t name Biden but analyzes cases in which the IRS won a judgment against taxpayers who paid themselves suspiciously low salaries from S corporations and counted most of the revenue as “distributions” exempt from the Medicare tax.
“Courts have agreed with the IRS that shareholder-employees are subject to employment taxes when shareholders take distributions, dividends, or other forms of compensation in lieu of reasonable compensation,” the report says.
The document outlines several examples, including a case involving an accountant named David Watson who piped about $200,000 per year of his firm’s revenue through an S corporation while deeming just $24,000 of it as taxable salary. Courts determined he dramatically underpaid his taxes.
Significantly, the CRS report notes that presidential tax returns are subject to automatic audit only for years when a president is in office. The White House said this year that the Biden S corporations are dormant, meaning the IRS won’t automatically review their use.
Biden, who has branded himself “Middle-Class Joe,” routinely argues the rich must “pay their fair share.”
Chris Jacobs, a veteran of GOP offices on Capitol Hill who closely tracks the issue, said, “[It’s obvious] Biden doesn’t really believe in expanding programs like Medicare and Obamacare, because he thought buying a second multimillion-dollar mansion, and renting a third, was more important than helping to fund those laws.”
David Gamage, a tax law professor at Indiana University Bloomington, said, “the general view among tax experts is that it’s quite easy for taxpayers to get away with this form of tax planning to the point of it being very abusive.”
The NY Post, when covering this story, said that “The White House did not immediately respond to a request for comment.”
In the past, when confronted by this issue in the runup to the 2020 election, the Biden campaign has previously stated that “the salaries earned by the Bidens are reasonable and were determined in good faith.”