If the foreign organization is not recognized as exempt under Section 501(c)(3) as a public charity and the private foundation doesn't have an equivalency determination, then the private foundation must exercise expenditure responsibility to avoid the grant being treated as a taxable expenditure. Form(s) 990-PF for the tax period(s) under audit should be reviewed for compliance. Other donations made to the Trump Foundation that may have been in return for Trump's personal work include: Trump has been accused of directing foundation money toward several charities that in turn paid the Trump Organization to host charity events at Trump-owned hotels and golf clubs. [3][4] Like many other private foundations, the Trump Foundation conducted no charitable programs of its own; instead granting money to other tax-exempt organizations. [42][147], On December 18, 2018, Underwood announced that the foundation had agreed to shut down under court supervision and distribute its remaining assets to court-approved charities, although the attorney general's office would continue its investigations of and legal actions against the foundation and its directors. Domestic corporation donations-also known as Corporate Social Responsibility (CSR) funding-account for … [27] On June 18, New York governor Andrew Cuomo's office announced that the governor would refer the civil case to New York's Department of Taxation and Finance if it is requested to do so by the attorney general's office. [127][150] The investigation was part of a broader investigation into foreign influence into the campaign. 263, provides guidelines that qualified tax practitioners may use for preparing written advice on which a domestic private foundation ordinarily may rely in making an equivalency determination that the foreign grantee of a grant made for Section 170 (c)(2)(B) purposes (other than a grant described in Section 507(b)(2) and Section 1.507-3(c)) is a qualifying public charity. [127][128], In September and October 2016 there were several legal actions and complaints filed against the Trump Foundation. [129][130], On September 30, 2016, the attorney general's office issued a "Notice of Violation" to the Trump Foundation, ordering it to immediately stop all fundraising in New York and to file its registration and all required past audits within 15 days, or risk being "deemed to be a continuing fraud on the people of the State of New York". The Washington Post reported that "on the day that Trump and the other parties told the court that they had settled the case, the Donald J. Trump Foundation made its first and only grant to the Martin B. Greenberg Foundation, for $158,000. [32][116][117], For example, Trump took personal credit and was honored for a Trump Foundation grant to the Palm Beach Police Foundation that was actually from an outside source (see above). [70] The Twin Towers Fund, later administered as part of the New York City Public and Private Initiative, was created by then-New York City Mayor Rudolph Giuliani "to benefit the families of firefighters and police officers who died in the attacks. [138], On June 14, 2018, the new New York attorney general Barbara Underwood filed a civil suit against the foundation, Trump himself, and Trump's adult children—Ivanka, Eric and Donald Jr.—alleging they had engaged in "extensive unlawful political conduct" and that Donald Trump had been using the foundation "as his personal checkbook" to, among other things, settle his personal legal debts and support his presidential campaign. Reg. Trump’s three adult children — Ivanka, Eric and Donald Jr. — all served on the board, which had not met after 1999. The primary activity of most non-operating private foundations is to distribute funds to other organizations for the conduct of various charitable activities. [148][149], On April 9, 2018, the New York Times reported that the office of Special Counsel Robert Mueller, as part of its larger investigation into Russian interference into the 2016 election, was investigating the Trump Foundation's donation of $150,000 by Ukrainian billionaire Victor Pinchuk in 2015. "[37][38] The office had previously filed charges—at that time awaiting trial—against the Trump Organization's Trump University. [70], In 2016, after the convention, Trump's campaign suggested that the Trump Foundation made a grant to the American Red Cross after the attacks; however, no record of it exists in the foundation's tax filings from 2001 through 2014. ", "Cracks in the Donald J. Trump Foundation: Report alleges self-dealing to buy conservative favor", Barack Obama says Trump foundation took other people's money, bought a six-foot-tall painting, "This is the portrait of Donald Trump that his charity bought for $20,000", "Michael Cohen to Congress: Trump Used His Foundation's Funds to Acquire $60,000 Portrait", "How I found Trump's controversial $10,000 portrait", "Trump is actually doing his foundation a favor, by 'storing' its portrait on his golf resort wall, his adviser says", "Komen for the Cure Perfect Pink party draws hundreds, raises more than $1M", "School bands play at Trump's businesses, and his charity writes checks | Extra Credit", "Trump hasn't donated to his own charity since 2008", "Charities thinking twice about galas at Trump's Mar-a-Lago", "Palm Beach Police Foundation tax records Form 990 2014", "A 93-page list of Donald Trump's charitable contributions from the last five years", "Have you given more to charity than Donald Trump? If an expenditure is taxable only because of a failure to make or obtain a full and complete report as required, correction may be made by obtaining or making the report in question. The hotel was owned by the Trump Organization at the time and the assessment was for the renovation of the severely dilapidated Pulitzer Fountain at Grand Army Plaza, which directly faced the hotel. [87] Schneiderman's office called the grant part of a "vendetta" by Trump, while Citizens United rejected any connection between the grant and its own suit against Schneiderman. If the foreign organization has not received an IRS determination letter, grantmaking by a private foundation becomes more complicated. [57], Fahrenthold received the 2017 Pulitzer Prize for National Reporting for his investigations into the Trump Foundation.[49]. Under tax law, the violations can lead to penalties, such as the imposition of excise taxes or repayment of the improperly spent monies. [31][65][66], Trump Organization CFO Allen Weisselberg testified in an October 2017 deposition that he had witnessed Donald Trump's campaign staff coordinate with Trump to use the Iowa fundraiser to benefit the campaign. Proc. [72] According to the News, Comptroller Scott Stringer "found that Trump and [the Trump Foundation] hadn't donated a dime in the months after 9/11"; however, because the reviewed period covered only one year after the attacks, the Comptroller's office was "unable to conclude definitively" that Trump never gave to the fund after August 2002. [88] The Trump Foundation's 2014 tax filing[89] misidentified Citizens United as a public charity (501(c)(3)) when it is in fact a social welfare organization (501(c)(4)). [41] The following month, the New York State governor's chief counsel announced that Governor Andrew Cuomo was ready to provide the state's attorney general's office with the requisite criminal referral in the matter for possible criminal prosecution under state law. We found less than $10,000 over 7 years", "Donald Trump book royalties to charity? The town said the club's flagpole violated town height limit rules and levied a daily accruing fine against the club. [32] Examples include: The Trump Foundation is responsible by law for ensuring that any grant it makes to another private foundation is used strictly for charitable purposes. [85] In October 2016 RealClearPolitics reported that Trump directed significant amounts of foundation money to conservative organizations, possibly in return for political support and access. [140][42] The suit sought $2.8 million in restitution and the dissolution of the foundation. [84] "The more you listen to him, the more you say to yourself, 'You know, maybe the guy's right,'" Graham had told ABC News in 2011. "[32] In September 2016, the Post reported that the grant was directly linked to the legal settlement, likely violating IRS self-dealing rules by using charitable funds to pay Trump's personal or business obligations. Reg. Correction of a taxable expenditure. [141][142] The suit noted that Trump himself made all decisions about disbursement of foundation funds and that the board of directors had not met for 18 years. [111], Both The Washington Post and Fox News reported that Trump repeatedly claimed in public, beginning in 2015, to have made over "$102 million" in charitable donations "in the past five years". [78] In 2016 New York attorney general Eric Schneiderman said publicly that the Trump Foundation was the subject of an ongoing investigation by his office. [24][25][26] According to the New York attorney general, the board had not met after 1999. patriotism. "[85] In 2016, several media outlets alleged that Van Susteren had been producing overtly pro-Trump reports on her Fox News show On the Record.[86]. [55] The Post found old Associated Press coverage showing that Trump may have started directing income to the Trump Foundation as early as 1989. NBC News has called Graham "an early ally" of Trump. A bench. If provided, verify that the equivalency determination was prepared by a qualified tax practitioner, that it contains current information, and that it appears reasonable. "[62] Around that time, Trump also said he had contributed $1,000,000 of his personal funds. A 2008 episode where Trump told contestant and mixed-martial arts star, In 2012 Trump promised at least six personal donations of $10,000 each to contestants' chosen charities during one episode of, In 2013 Trump promised personal donations of $20,000 each to the charities of basketball star, A gift to Starkey Hearing Foundation, a charity chosen by an actress, Trump using foundation money to pay the personal bills of a viewer of the TV show, Trump being honored with a chair and plaque in his name at the, Trump taking personal credit for a $25,000 grant from the Trump Foundation at a speech honoring slain journalist, Trump receiving personal praise for a $100,000 Trump Foundation grant in 2016 to the, Lawsuits related to the 2020 United States presidential election, This page was last edited on 13 April 2021, at 00:28. One week later the office issued a "Notice of Violation". The Foundation characterized the payment to the charities as a "contribution," stating it was "pleased to donate an additional $2 million" to "worthy organizations. The private foundation would have to simply substantiate the foreign organization's exempt status (copy of the determination letter or listing in EO Select Check) and document proof of payment. [31], The Washington Post reported in September 2016 that Donald Trump had directed that $2.3 million owed to him and his organization by various people and organizations should be paid instead to his foundation as donations, possibly evading personal income taxes. The equivalency determination must be made by a qualified tax practitioner (attorney, CPA or enrolled agent) and written advice can generally be relied on for two consecutive tax periods. Improving methods of exercising expenditure responsibility; Improving methods of selecting recipients of individual grants; and. One donation to the foundation was $4 million in 2007; the second was $1 million in 2009. Richard Ebers had bought goods and services, including tickets, from "Trump or his businesses"; he was allegedly instructed to make payment for them to the Trump Foundation in the form of charitable contributions instead of as income for the Trump organization. Investing in the communities that make up the dairy industry is critical to the sustainability of dairy farming in Victoria. In 2011 Comedy Central donated $400,000 for Trump's appearance in a broadcast comedy roast of himself. Section 53.4945-5(a)(4) Certain "public" organizations, Treas. [85], Graham also heads Boone, North Carolina-based Samaritan's Purse, a Christian relief agency that received $25,000 from the Trump Foundation in 2012. [53] To raise the money needed to make the settlement, the Trump Foundation auctioned a prize of lifetime golf membership at Trump-owned golf courses, with the winning bid bringing a $157,000 donation to the Trump Foundation to the foundation to offset the payment to the Greenberg Foundation. [10][11][12] On December 18, 2018, Underwood announced that the foundation had agreed to shut down under court supervision and distribute its remaining assets to court-approved charities, although she did not end investigations of the foundation and its directors. He had pledged the money personally, and then the Trump Foundation solicited the $150,000 earmarked for the police foundation from an unrelated philanthropic organization, the Charles Evans Foundation. IRS rules prohibit individuals from diverting taxable income owed to them toward charities if they benefit directly from those charities unless the individual declares the income on his tax forms. [35][36] In 2006, People magazine donated $150,000 for an exclusive right to publish baby photos of Barron Trump. Family foundations make up over half of all private (family, corporate, independent, and operating) foundations, or 40,456 out of approximately 73,764 foundations (Foundation Center, 2011). [53][75], Trump's foundation paid $158,000 to the Martin B. Greenberg Foundation as settlement of a suit brought by Greenberg against the Trump National Golf Club Westchester in Briarcliff Manor, New York. [14][15] Additionally, Trump was required to reimburse $11,525 to the foundation, which was added to $1,797,598.30 already in the foundation’s bank account. As long as it was private and did not solicit outside funds, it did not have to file annual audited reports with the New York State Charities Bureau. [13], During the 2016 U.S. presidential election, David Fahrenthold of The Washington Post initiated an investigation into Trump's history of charitable giving after Trump had held a fundraiser for veterans in January 2016 in lieu of appearing at a televised Republican debate. Trump’s three adult children — Ivanka Trump, Eric Trump and Donald Trump Jr. — were all listed as on the board of directors, as was Trump Organization's treasurer/CFO Allen Weisselberg. [39] However, a spokesperson from the New York State attorney general's office told the New York Times, the same month, that the foundation "cannot legally dissolve" until its current investigation is completed. "[14][50] The attorney general had asked the court for an order dissolving the charity and imposing $2.8 million in restitution and penalties. Law enforcement investigators subsequently discovered various ethical and legal violations, including failure to register in New York, self-dealing and illegal campaign contributions. Van Susteren and her TV crew had accompanied Graham on Samaritan's Purse trips to Haiti and North Korea. [5], Many of the outside donors to the foundation have done business with Trump or the Trump Organization. In many cases, this flow of money corresponded to prime speaking slots or endorsements that aided Trump as he sought to recast himself as a plausible Republican candidate for president." The foundation paid a $2,500 fine for violating IRS rules against political contributions by charitable organizations. It was the largest single grant made by the Trump Foundation that year. [31][69], An investigation by the New York City Comptroller's office in October 2016 showed that Trump and/or the Donald Trump Foundation may have failed to honor at least one pledge to charities established to provide relief for victims of the September 11, 2001, terrorist attacks. Families and school staff work together to support and improve the learning, development, and health of students. Federal election law prohibits non-U.S. nationals from contributing to U.S. political campaigns. In 2010, Trump was personally honored for his support by the Palm Beach Police Foundation after the Trump Foundation donated to the charity $150,000 during the period of 2009–2010. Part XV of Form 990-PF should list the name, address and foundation status of all grant recipients. "[71], During the 2016 Republican National Convention, Giuliani announced that Trump had made unspecified "anonymous" donations after the September 11 attacks, although such donations have not been identified. The Trump Organization provided journalists with a 93-page list of the donations. The grant to the Conservancy was the largest single grant made by the Trump Foundation from inception through at least 2015. Reg. [65] Trump distributed at least some of the funds publicly at "Donald Trump for President" rallies, displaying large-size donation checks that included his campaign slogan "Make America Great Again" or a link to a campaign website. He sent a check out. Mr. Trump alone made all decisions related to the Foundation. ", "NY attorney general is investigating Trump Foundation practices", "Trump Foundation Falls Under Investigation By New York Attorney General", "Donald Trump to dissolve his charitable foundation after mounting complaints", "Denying Conflict, Trump Family Tries to Resolve Potential Problems", "New York AG's office: Trump Foundation warrants investigation by FEC, IRS", "Breaking News: New York Governor Opens Door to Take Trump to Court", "Trump Foundation to shut down after lawsuit exposes 'pattern of illegality, "Trump's troubled foundation to shut down", "Trump Foundation agrees to dissolve with judge to oversee dispersal", "Trump announced his gifts to veterans. Network Rail is an "arm's length" public body of the Department for Transport with no shareholders, which reinvests its income in the railways. The foreign grant constitutes a taxable expenditure and is not a qualifying distribution. Rev. [41], On August 30, 2018, Trump attorney Alan Futerfas filed a motion to dismiss Underwood's suit, claiming it was without merit and was a result of "pervasive bias" by former New York attorney general Eric Schneiderman, who had supervised the investigation before resigning that May. [34], Trump solicited donations in lieu of payment for other services as well. [32] Several philanthropy experts said having a family foundation primarily funded by outside money is unusual. In 2005 Norwegian Cruise Line donated $100,000 in lieu of an appearance fee for Melania Trump. At the time Citizens United was engaged in a lawsuit against New York State attorney general Eric Schneiderman, whose office was pursuing a civil suit against Trump University. Section 53.4945-5(a)(5) Certain foreign organizations. [24], Under New York State law, a not-for-profit foundation must register as a "7A Charitable Organization" if it plans to solicit outside donations over $25,000 in any year. Treas. [39][40] However, the office of the New York State Attorney General Eric Schneiderman blocked the dissolution, saying the foundation "cannot legally dissolve" until its current investigation is completed. [64], Trump may have used Trump Foundation grants to advance his presidential campaign, in violation of rules barring charities from engaging in political activity. She had also made referrals to the Federal Election Commission (FEC) and the Internal Revenue Service (IRS). [97] In one case, the grants were used specifically to pay for newspaper ads. ", "End NY fundraising, Trump foundation told", "How Trump was named 'Grand Benefactor' for a Dana-Farber gala without donating a penny", "Trump promised personal gifts on 'Celebrity Apprentice.' As with the Twin Towers Fund, if Trump instead had made a personal donation, it would not have shown up in the foundation's records.[70]. He's not going to like my telling you this but he did it anonymously. Reg. Trump later personally reimbursed his foundation for the $25,000. [46] In late May, Trump revised his figures downward, saying $5.6 million had been raised at the event and that he had contributed his one million only the previous week, after the media criticized him. If the IRS determines that the foreign organization is a Section 501(c)(3) public charity, then any grants from the private foundation to the foreign organization for charitable purposes will generally be a qualifying distribution. If not, examine whether Section 4942 excise taxes should be imposed for failure to distribute income. [70] According to its IRS Form 990 tax filings, the Trump Foundation made no grants to the Twin Towers Fund or to NYC Public/Private Initiatives, Inc. from 2002 through 2014, although Trump may have made personal donations after August 2002 that would not have shown up in these filings. [30][31] His final payment to the foundation was $35,000 in 2008. All donations were supposed to have gone into the Trump Foundation and then granted by the foundation to others. Again.—CREW", "Donald Trump Often Made Donations to State Attorneys General Reviewing His Business", "Trump's foundation wrote many checks on path to nomination", "Franklin Graham praises McCrory, blames Charlotte for HB2-related disruption", "Media Figures Mock Greta Van Susteren's Hour-Long Trump Infomercial", "Trump charity gave $100,000 to David Bossie's Citizens United that helped fund lawsuit against mogul's foe", "Trump Foundation gave $100K to conservative group suing NY attorney general: report", "Donald Trump looks to spend eternity in N.J. as real estate mogul seeks private cemetery", "Christie's Mansion Fund Collected Millions From Political Favor Seekers", "Publication 526, Charitable Contributions", "Trump Foundation Paid Activist Filmmaker James O'Keefe", "Trump used his foundation to fund guerrilla filmmaker James O'Keefe", "DNC moves to discredit Project Veritas after latest video alleges campaign illegality", "Trump used charity dollars for presidential campaign, report says", "Trump Used Foundation Funds for 2016 Run, Filings Suggest", "What's the deal with the Trump Foundation? [55] Since Trump had yet to release his income taxes at that time, the Post was unable to confirm if the income was declared for any of the donations received. [3][4][5], The foundation's activities came under scrutiny during the 2016 presidential election campaign, initially by The Washington Post's David Fahrenthold. [22] Donald Trump was its president until January 2017, three days after his inauguration as US President. Otherwise, a private foundation can make the grant to the foreign organization if it follows the expenditure responsibility requirements outlined below, but the grant cannot be included in Section 4942 calculations. 2017-53, 2017-40 I.R.B. Private-sector funding stems from four sources -- foreign, corporate, retail, and high-net-worth individuals (HNIs) or families. Reg. Toward the $500,000 assessment, the foundation granted $264,631 to the Conservancy while the Trump Organization paid between $100,000 and $250,000. Trump received highly visible praise for his generosity on his prime-time television show The Apprentice. He frequently offered to make generous donations to his contestants' charities, but records show that he ultimately either directed the Trump Foundation to make a grant or had the show's network, NBC Universal, make the donation. [98] In addition to Citizens United (above), groups include Iowa's The Family Leader, the South Carolina Palmetto Family Council, the American Conservative Union, and the American Spectator Foundation. The Trump Foundation was at the time granted an extension of time for filing its financial paperwork, including all past audits. It's the first time I've ever seen this, and I've been doing this for 25 years in the IRS, and 40 years total. [28][29], Until 2015, Trump contributed $5.5 million to the Trump Foundation, including money from his book, while outside donors contributed an additional $9.3 million. [32][33] The donations were reported by the Trump Foundation as coming from the WWE, but the WWE has claimed money came from Vince and Linda McMahon personally. A private foundation’s money comes from a family, an individual, or a corporation. "[70], The New York City Comptroller's office told the New York Daily News it had manually reviewed "approximately 1,500 pages of donor records of the Twin Towers Fund and the related entity NYC Public/Private Initiatives Inc., containing the names of more than 110,000 individuals and entities that were collected as part of the audits" through August 2012. In 2018 the New York Times reported that the office of Special Counsel Robert Mueller was investigating the donation as a possible illegal in-kind campaign contribution from a foreign national intended to curry favor with then-candidate Trump. [40], On September 13, 2016, New York State attorney general Eric Schneiderman announced that his office was investigating the foundation "to make sure it's complying with the laws governing charities in New York. Section 53.4945-1(d)(2). "[74] Settlement documents show that Trump, in return for discharging the club's obligations to Palm Beach, had agreed to personally donate $100,000 to Fischer House, a charity benefitting veterans and military families. [151], On March 4, 2019, new House Judiciary Committee Chairman Jerrold Nadler issued a subpoena to the Trump Foundation for copies of a broad range of documents it had previously delivered to Robert Mueller's office or any other domestic law enforcement agency on or after November 8, 2016, the day of Trump's election. Pinchuk is the son-in-law of former Ukrainian president Lionid Kuchma. [94] During the third 2016 presidential debate, Trump claimed that new videos produced by O'Keefe and released that week proved Hillary Clinton and Barack Obama had "hired people" and "paid them $1,500" to "be violent, cause fights, [and] do bad things" at Trump rallies. Review the grantees for any that may have foreign addresses. However, if a private foundation makes a "good faith determination" that a foreign organization qualifies as a qualifying public charity, then the grant will generally be a qualifying distribution. [42] Given the violations alleged in the civil case, some experts believe a tax investigation could lead to state criminal charges. When full recovery is not possible, any additional corrective action will be prescribed by the IRS. Reg. [136] The attorney general's press secretary said Trump could not legally dissolve his foundation until the investigation is finished. We may have found it, "Trump directed $2.3 million owed to him to his tax-exempt foundation instead", "Trump Foundation lacks the certification required for charities that solicit money", "The secrets of David Fahrenthold's reporting on the Trump Foundation", "Journalist Says Trump Foundation May Have Engaged In 'Self-Dealing, "Attorney General Underwood Announces Lawsuit Against Donald J. Trump Foundation And Its Board Of Directors For Extensive And Persistent Violations Of State And Federal Law", "Donald J. Trump Foundation not certified as charity in New York", "The time Donald Trump tried to shake down Mike Tyson for $2 million", "Veterans' charities reportedly receive fraction of money raised by Trump event", "Memorandum of Law in Opposition to Respondents' Motion to Dismiss and in Further Support of the Verified Petition", "Watchdog Group Files Complaint With IRS Against Trump Foundation", "Trump's Charity Tells Us a Lot About His Business", "Trump Foundation engaged in 'persistent illegality,' New York attorney general says", "Here's how the Trump Foundation helped buy victory in the Iowa caucuses", "NYC Controller Scott Stringer investigation reveals Donald Trump may have lied about donating to 9/11 charities", "Costs of Twin Towers Fund Draws Criticism", "Despite 2001 Vow, Trump Made No 9/11 Donations in Year After Attack, Audit Finds", "The Trump Files: How Donald drove Palm Beach nuts with an American flag", "Trump's Abuse of Trump Foundation—Criminal Tax Implications? Both an initial tax and an additional tax under Section 4945(a) and (b) may be imposed. [37][38], In December 2016, one month before his inauguration, then president-elect Trump announced that he would dissolve the Trump Foundation to avoid "even the appearance of any conflict with [his] role as President". [60][131][132][133] The notice said the foundation has not complied with New York law because it had failed to re-register in New York State as a "7A level charitable organization", as required for charities that solicit $25,000 or more a year from outside donors. Section 170(c)(2)(B) lists the following charitable purposes: religious, charitable, scientific, literary, or educational purposes (but only if no part of its activities involve the provision of athletic facilities or equipment), or to foster national or international amateur sports competition, or for the prevention of cruelty to children or animals. Withholding any unpaid funds due to a particular grantee; Periodic reports to the IRS from the foundation for. The taxes are imposed on both the foundation and on any foundation manager who knowingly and willfully agrees to the expenditure knowing it was a taxable expenditure.
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