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Presidential Candidate Tax Returns: Should Voters Care?

Reviewing tax returns can reveal a lot of information about a political candidate. But many tax experts caution the average voter may not be knowledgeable enough to know what all that information means – and they argue that any conclusions based upon a tax return can often be traced back to a voter’s pre-existing political position.

“As a company, 20/20 reviews a lot of tax returns. It’s our job to dispassionately review a  tax record and determine what steps need to be taken to resolve any tax issues,” said Brian Biffle, president of 20/20 Tax Resolution. “Voters review tax returns with a more subjective approach. So, before they pass judgment based on a candidate’s financial history, a ‘tax return primer’ might be in order to understand what they are reviewing.”

According to 20/20, here’s what voters can learn from a candidate’s tax return:

  • Sources of a candidate’s taxable income
  • Clues to business failures in losses or the overall fiscal health of business endeavors
  • Information on charitable deductions (not simply how much but where it’s distributed)

“For some voters this information can, in essence, become a test of character,” Biffle said. “They’re interested in where a candidate’s income originates and what types of charities the candidate supports.”

Other information revealed often causes voters to compare a candidate’s tax history to their own, said Biffle, and make judgments about how “in touch” a candidate is with voters, as well as the candidate’s ability to serve in the Oval Office. For example:

  • The effective tax rate paid by a candidate
  • Information on investments and loans
  • Real estate taxes (abatements, for example)
  • Real estate holdings
  • Information about the existence of offshore accounts, household employees and other holdings

“Voters sometimes view this information almost as a question of transparency,” Biffle said, particularly since candidates are not required by law to release their tax returns. “But in reality, none of these things provide a complete analysis of a person’s ability to lead. It’s only become an important factor to voters in recent elections.”

Although candidates are required to file Public Financial Disclosure Reports since the passage of 1978’s Ethics in Government Act, these reports don’t provide the detailed examination many voters have come to expect, Biffle said.

“We have clients from every walk of life, income level and background,” Biffle said. “At no time does a tax return provide an exact portrait of a person’s character. It simply offers a glimpse into their finances.”

20/20 Tax Resolution Success Story: Jurgen

20/20 Tax Resolution client came to the United States from Germany to pursue the American Dream – but unwittingly faced a classic American nightmare when he ended up on the wrong side of the IRS.

Situation:

In 2009, Golden, Colo. resident Jurgen was a real estate developer converting buildings into condominiums. But when the economy tanked and the Great Recession hit, he was unable to renew his 5-year loan, and suddenly tightened monetary restrictions prevented him from securing a new loan. Thus began a snowballing cascade of financial concerns that was topped off when Jurgen’s CPA suddenly passed away – unbeknownst to Jurgen who was busy managing his financial affairs. By the time he tried to connect with his now-deceased CPA, the accountant’s files had disappeared, along with all of his documentation.

“I did not find out until I had to do my new taxes (about eight months later),” Jurgen recalled. “By then, all the CPA’s files were gone. I didn’t know what to do.”

The Problem:

Unable to be confirmed through documentation, many of Jurgen’s deductions were denied by the IRS – to the tune of hundreds of thousands of dollars. He was now facing a tax debt of nearly half a million dollars.

With mounting debt and a wife and two children to support (one of whom was about to enter college), Jurgen was nearly in a panic. He recognized he couldn’t manage this situation on his own. So he researched online for the right kind of help. He found it at 20/20 Tax Resolution.

The Solution:

20/20 conducted a thorough examination of Jurgen’s circumstances and were able to connect with the IRS and intercede on his behalf. His 20/20 Senior Tax Consultant – working with Jurgen – took immediate steps to bring sanity back to his personal and business lives, including:

  • Getting all past and current tax returns in proper order in order to expertly diagnose the problem
  • Identifying all the next steps necessary
  • Reducing wage garnishment, which had been implemented by the IRS
  • Securing a hold on both the state’s and the IRS’ additional collection efforts
  • Negotiating a payment schedule that Jurgen could accommodate without destroying his financial future

As a result, 20/20 was able to help put Jurgen’s life back on track. “They treated me like a human being not somebody that screwed up,” he said. “They understood that the IRS is hard to deal with.” Based upon our experience working with taxing authorities, 20/20 was able to quickly assess Jurgen’s circumstances, alleviate his concerns and help calm him down. “It’s not a good situation when all of the sudden the IRS is after you,” he said. “It’s pretty scary when you think you’re going to lose everything and have to start over. There’s no way you can go through this by yourself. Go to somebody that’s a professional.”

To hear more about Jurgen’s story and his experience working with 20/20, watch the video above.