Senate Democrats are circulating a memo claiming that President-elect Donald Trump’s nominee for Treasury secretary, Scott Bessent, improperly claimed almost $2 million in tax losses and owes almost $1 million in taxes associated to his hedge fund — offering prepared ammunition for them as Bessent goes earlier than the Finance Committee on Thursday.
The memo obtained by POLITICO, which was ready by Finance Committee employees underneath rating member Ron Wyden (D-Ore.), alleges Bessent ought to have paid $910,182 in taxes for earnings he made by means of his hedge fund, the Key Sq. Group, from 2021 by means of 2023. Bessent was capable of keep away from that earnings as a result of he claimed he was a “restricted companion” not making selections for Key Sq., the memo says.
Democratic employees on the Finance Committee are arguing that Bessent was clearly actively engaged in selections for the fund.
The memo additionally highlights losses Bessent claimed from earnings associated to All Seasons Press, a conservative ebook publishing home that has minted books from authors together with former Trump aide Peter Navarro, in addition to a glowing biography of conservative pundit Tucker Carlson. The memo argues that Bessent didn’t correctly substantiate $1,939,296 in losses, citing ASP information indicating that Bessent wasn’t actively concerned within the publishing home’s companies.
A spokesperson for the Trump transition referred to as the claims “meritless.”
“Scott Bessent has paid his taxes. After offering 1000’s of pages of information by means of an exhaustive course of, neither Senator Wyden nor his employees are capable of present any proof that Scott violated the Inner Income Code,” the spokesperson mentioned.
“As a substitute, they’ve resorted to a subjective interpretation of the tax code, together with taking positions which are opposite to the to the views of the broad majority of tax professionals, accountants and legal professionals, in an effort to mislead the general public. “
The memo is bound to tee up a barrage of questions from Finance Committee Democrats about Bessent’s taxes at his nomination listening to Thursday. And the memo will enable Wyden to painting Bessent as out of contact with the Treasury Division and IRS that he would lead, which underneath President Joe Biden’s administration have been laser-focused on closing tax dodges utilized by the ultra-wealthy.
It’s unlikely, although, to place a dent in his help from Republicans, who’ve rapidly coalesced behind the longtime hedge fund supervisor, or endanger Bessent’s final path to affirmation — particularly with Senate Finance Chair Mike Crapo (R-Idaho) pledging to maneuver his nomination rapidly.
“Mr. Bessent has adopted the legislation and supplied 1000’s of pages of documentation as a part of the committee’s rigorous vetting course of,” mentioned Mandi Critchfield, Crapo’s spokesperson, in response to the memo.
Along with potential issues along with his hedge fund earnings and his ASP funding, the memo additionally referred to as out a $500,000 deduction Bessent took on his 2023 returns for “unhealthy debt.” The memo argues Bessent supplied scant clarification to show the deduction wasn’t actually a present or a private mortgage.
Democratic employees are additionally declaring that Bessent seemingly used a work-around to avoid a $10,000 cap on state and native tax deductions, claiming $40,000 in such write-offs for a cooperative he had an funding in.
In a number of of the cases, Democratic employees urged that Bessent amend his tax returns, however he declined to take action, in accordance with the memo. In a single case, Bessent mentioned he would contemplate amending his returns if tax legislation verdicts related to his “restricted partnership” standing in his hedge fund had been introduced earlier than increased courts.
