Did Michael Cohen Tell IRS About Stormy Payoff? If Not, He’s In Big Trouble
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By Aiden Pink April 18, 2018
Michael Cohen’s $130,000 payoff to porn star Stormy Daniels to quiet her story about an alleged affair with President Trump may have constituted tax fraud if he didn’t report the payment to the Internal Revenue Service, a former IRS investigator wrote in The Daily Beast on Wednesday.
Martin Sheil, who retired as a branch chief of the IRS Criminal Investigation division, explained that Cohen was required to have filed a Form 1099-Misc for his payment and obtained a Federal Employment Identification Number for the shell company he used to process the payment.
The Wall Street Journal reported that Cohen also used that entity, Essential Consultants LLC, to process a similar payment for the alleged mistress of Republican megadonor Elliott Broidy.
“No wonder Cohen’s bank, First Republic, issued a suspicious activity report (SAR) to the Treasury Department’s Financial Crimes Enforcement Center (FinCEN), according to the Journal,” Sheil wrote. “SARs are automatically reviewed by special agents of the IRS Criminal Investigation unit. SARs were also the trigger that set off the investigations of Gov. Elliott Spitzer of New York (for paying escorts through a shell company) and ex-Speaker of the House Dennis Hastert (for illegally structuring payments to pay off a victim of sexual abuse).”
“Impeding, impairing, and obstructing the IRS from ascertaining the correct amount of tax due with regard to Daniels’ 2016 personal income tax return could be viewed as a criminal conspiracy to defraud the U.S. government,” Sheil added.
The Justice Department said in a court filing on Friday that Cohen had been under investigation for months on suspicion of “acts of concealment” and “fraud.”
Contact Aiden Pink at pink@forward.com or on Twitter, @aidenpink
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