A reporter on the national beat recently asked me whether Trump might be guilty of tax fraud if he deducted the payments of $35,000 per month that he was making, for some period, to reimburse Michael Cohen, for paying $130,000 in hush money to Stormy Daniels. The payments reportedly included a gross-up for the income tax consequences to Cohen, under the assumption that he would include them without deducting the hush money payment.This would have been a great question for my Federal Income Tax exam, if only (1) I had heard it in time, and (2) it weren’t too politically sensitive to be a proper exam question. (E.g., one doesn't want students' answers to be influenced by their own political views, or their perceptions as to mine.)Anyway, here’s a lightly edited & expanded version of my response:That's an interesting question. The key tax issue is, what would have been Trump’s legitimate business reason for deducting the payments to Cohen?…
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