Trump Foundation Finally Reveals self-Dealing on Newly Uploaded 990

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November 22, 2016; Washington Post

Attorneys for the Donald J. Trump Foundation uploaded the private foundation’s 2015 Form 990-PF to its listing Monday night, and it included a bombshell. In short, the foundation admitted it engaged in self-dealing in 2015 and that it had engaged in similar acts in prior years without correcting them.

NPQ has reported on the Trump Foundation numerous times, including instances where foundation funds were apparently used to settle lawsuits against Trump and make purchases at charity auctions that either disappeared or, in one case, ended up hanging on a barroom wall in one of Trump’s resorts.

Self-dealing is a technical term applied solely to 501(c)(3) private foundations. 501(c)(3) public charities have similar restrictions but are regulated somewhat differently on this point. Specifically, there are two questions the foundation answered in the affirmative on the tax form, both in Part VII-B:

1a(5) – During the year did the foundation {either directly or Indirectly): Transfer any income or assets to a disqualified person (or make any of either available for the benefit or use of a disqualified person)?

1c – Did the foundation engage in a prior year in any of the acts described in 1a, other than excepted acts, that were not corrected before the first day of the tax year beginning in 2015?

What’s next? The Form 990-PF indicates that answering “yes” to the questions above may cause assessment of an excise tax on either the nonprofit organization or the individuals involved, or both. The specific instances of self-dealing and related transactions would need to be reported by the foundation to the IRS using the 10-page Form 4720.

If a Form 4720 for 2015 was filled out by the Trump Foundation, it was not uploaded to GuideStar with its Form 990-PF on Monday evening.

The private foundation “initial tax on self-dealing” is 10 percent of the value of each reported transaction, in addition to repayment of all funds to the foundation by the person or persons who benefitted from the self-dealing transaction. Moreover, the foundation’s managers (in this case, Trump, three of his children and the Trump Organization’s CFO) may be liable to a five percent tax (up to a maximum of $20,000) for each reported transaction.—Michael Wyland

  • R Wade

    Was this article intended to be a double-barrel approach at debasing by including a certificate image related to OPINION related to Trump University and then to move on to the very document (990) that provides a basis for actually being forthright in disclosures which was twisted to imply motive and wrongdoing. If intent had persisted, wouldn’t the preparation of the 990 omitted the error.

    Apparently articles of this nature are becoming the rule rather than the exception toward bias on the part of this publication. No, I don’t read every article but those that do interest me exhibit a preponderance of bias by some authors which causes concern when reading other articles. Innuendo rather than a simple declaration of facts IMHO is at the heart of bias in reporting.

    I’m pleased to comment that the bias implied is not the rule of all NPQ authors. The editorial board/staff most probably through overwork rather than intent needs to return to the roots of journalism and be critical of published articles that indite through insinuation rather than providing a factual basis and let the reader thoughtfully reflect through their own lens
    Respectfully Submitted
    Ronald L. Wade

    • ruth

      we apologize. That image was inappropriate and has been removed