Author: Christian

The IRS Does Not Allow Deductions In Excess 50 Percent

The IRS Does Not Allow Deductions In Excess 50 Percent

Accountant testifies that Trump claimed huge losses on his tax returns

President Donald Trump has said his returns show he made very large payments to charitable organizations, but a leading financial expert is disputing that claim, testifying before a committee.

C. Frederick Wooster Jr., a certified public accountant, said that to be true, Trump’s tax returns would have to show that his annual income was $10 million or more for 10 years, or he would have to produce evidence of significant charitable contributions that could not be explained away as business-related.

“The IRS does not allow deductions or credits in excess of 50 percent if the source of the funds is taxable, such as personal cash,” Mr. Wooster told the House Oversight Committee. Mr. Wooster is president and founder of Wooster & Wooley LLC, a tax-deductive financial advisory services company that has advised corporations on tax planning.

He has been a frequent witness in Congress, providing testimony for the Senate Finance Committee, the Senate Ways and Means Committee, and the House Ways and Means Committee.

Mr. Wooster told the House Oversight Committee he has never worked with a president for the White House to advise them on tax preparation and advising a president is considered “a job within itself and does not fall under the category of work for hire.”

“I have never done it for another president,” he said.

Republicans on the committee have sought testimony from several accounting firms and Mr. Wooster said his firm does not provide tax preparation advice to the White House. The firm does however, provide services to clients to help them structure their tax issues and develop solutions.

He also disputed Mr. Trump’s assertion that the IRS used to be more open to accepting returns claiming charitable contributions.

“There are very few instances in which the IRS has allowed a larger deduction than 50 percent or so,” Mr. Wooster said. He said the IRS had a “very good reason” to do that, as there are few wealthy Americans who could afford to have their returns audited. “When you add in that there were very few deductions up to the 50 percent and very few people had been audited, most tax returns went through,” he said.


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