The Trump Organization was just fined $1.6M for tax fraud. Quick reminder: During a 2016 presidential debate, Trump said he didn’t pay taxes because he’s “smart.”
Corporations may be found guilty of crimes when two factors are met. First, the misconduct must be committed by high-level executives with the authority to act on behalf of the company. Second, the misconduct must have been committed at least in part to advance the interests of the company. By finding the Trump Organization guilty, the jury found that untaxed fringe benefits to corporate executives benefited the company as well as the employees.
But the verdict is significant by other measures. For one thing, it achieves some measure of accountability. And it sends the message that some cheaters, at least, are eventually caught. The scheme described by prosecutors benefitted company employees by artificially reducing the taxable income they needed to declare on their personal income tax returns. In exchange for a lower salary, they received undeclared perks. The scheme also benefited the Trump Organization. By providing unreported benefits to certain employees, the organization made it appear that the total compensation for those employees was lower than it actually was.
Within the business world, the conviction will bring reputational harm to Trump, who has seemingly evaded this type of accountability for years. But the verdict also speaks volumes about Trump himself. In a company that is privately owned and run primarily by Trump and his two oldest sons, the Trump Organization is a corporate alter-ego of sorts for Trump.Within the business world, the conviction will bring reputational harm to Trump, who has seemingly evaded this type of accountability for years. Outside of the C-Suite, accountability remains elusive.
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