Has Donald Trump released his tax returns?
Nope! But someone sent three pages of his 1995 returns to a New York Times reporter that showed a nearly $916 million loss for his adjusted gross income. The losses arose out of "financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan," the Times reported. The loss is notable not only for its size but also because it means Trump had lots of losses to carry back and forward:
The $916 million loss certainly could have eliminated any federal income taxes Mr. Trump otherwise would have owed on the $50,000 to $100,000 he was paid for each episode of “The Apprentice,” or the roughly $45 million he was paid between 1995 and 2009 when he was chairman or chief executive of the publicly traded company he created to assume ownership of his troubled Atlantic City casinos.
The $916 million loss was so large that the number ran off the line, looking "doctored" according to Susanne Craig the reporter who received the documents from an anonymous tipster and wrote about story behind the story. They finally got an explanation from the CPA who prepared the returns:
[T]he breakthrough came when [reporter] David [Barstow] traveled to Florida and tracked down Jack Mitnick, the semiretired accountant who had prepared and signed Mr. Trump’s tax returns.
Mr. Mitnick was initially reluctant to talk, but he eventually agreed to meet David in a bagel shop.
In a conversation there, Mr. Mitnick not only said the records appeared to be authentic; he also solved the mystery of the digits that did not line up. It turned out that the tax preparation software he had used did not allow him to enter a loss of nine figures. So, he recalled, he had to manually enter the first two digits, using an IBM Selectric typewriter.
Naturally, a lawyer for Trump, Marc Kasowitz is threatening legal action, saying "[he] has not authorized the disclosure of any of his tax returns."
There's lots of good coverage on this story from Ezra Klein, Joe Kristan, Peter Reilly and the Tax Foundation. There's sure to be more.
Hey look, someone is admitting that GAAP and non-GAAP metrics are both imperfect ways to judge a company's performance:
Whenever non-GAAP metrics get attacked, a slew of contrarians leap to defend them by pointing out that GAAP standards have many flaws. Traditional GAAP accounting, these critics argue, do a poor job of reflecting economic realities and already contain enough loopholes for executives to “manage” earnings.
Critics are right that sticking to generally accepted accounting principles is flawed. It’s just that non-GAAP is even worse.
It's quite a stretch to suggest that non-GAAP reporting is just plain "worse" than GAAP because "[companies] can make up whatever rules they want, and they almost always use those rules to inflate their reported growth and profitability." Anyone who looks at these things regularly already knows that don't they? If a company's making adjustments quarter after quarter and reporting non-GAAP numbers, you can take that as a bad sign. But if they report the same non-GAAP metric quarter after quarter, year after year, why wouldn't you use that to measure the company's performance?
Accountants behaving badly
If you're an accountant thinking about taking money that doesn't belong to you, does the amount factor into your decision? That is, are you hoping to make off with millions in order to high-tail it out of town to a non-extraditable country? Or are you just looking to boost your regular paycheck and not draw a lot of attention to yourself?
The latter description sounds like a case in Delaware (except for the "not draw a lot of attention to yourself" part):
A former Delaware Department of Health and Social Services accountant has been indicted on charges she diverted $8,843 worth of checks sent to the state agency to her bank account over three years, according to court documents.
Christie Kahn, 41, of Wilmington, was formally charged Monday with two counts of theft of over $1,500 and one count each of official misconduct and falsifying business records.
Those checks were $205.67 each and I'm kinda wondering what's the point? That's not even enough money to keep a hopeless gambling problem fed.
Elsewhere in Delaware Department of Health and Social Services news: seven case workers allegedly stole $1 million in food stamps. What the hell is in the water over there?
Previously, on Going Concern…
Megan Lewczyk wrote about time theft.
In other news:
- Tesco faces UK legal action over accounting scandal
- "In its second whistleblower retaliation case since the Dodd-Frank Act authorized the agency to bring such charges, the SEC found that the employee was removed from significant work assignments within weeks of raising concerns about the company's cost accounting model. He was terminated approximately three months later."
- Cabela’s Agrees to Buyout by Bass Pro in $5.5 Billion Deal
- Bad pet insurance.
- What should you do if you see a creepy clown?
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