Claire McCaskill is at it again. Her wealthy husband, who has bankrolled McCaskill’s political campaigns with millions of dollars, is currently taking advantage of tax loopholes under IRS scrutiny. Coincidentally, McCaskill said she opposed tax reform last fall in part because of the “loopholes exploited by the rich.”
“If Claire McCaskill is truly concerned about tax loopholes being exploited by the rich, then she should start by coming clean on all of the ones being exploited by her husband.” –SLF Spokesman Chris Pack
From the St. Louis Post-Dispatch:
McCaskill’s husband invests in conservation tax benefits under IRS scrutiny
St. Louis Post-Dispatch
By Chuck Raasch
5/25/2018
http://www.stltoday.com/news/local/govt-and-politics/mccaskill-s-husband-invests-in-conservation-tax-benefits-under-irs/article_f566a4be-ff46-5c5c-9ba5-b548860c7e07.html
WASHINGTON • The husband of Sen. Claire McCaskill, D-Mo., has invested at least $2.25 million in tax breaks for conservation easements, a class of investments that the Internal Revenue Service has called into question and Congress is trying to restrict.
Those investments by Joseph Shepard were revealed in McCaskill’s latest personal financial disclosure report filed this month.
The senator, who faces re-election this year, opposes what are described as “syndicated partnerships” that allow wealthy investors to take large tax deductions more than the money invested, in a federal program designed to encourage conservation by giving tax breaks on undeveloped land.
McCaskill voted against a 2015 spending bill that made them permanent, although she has long supported the conservation easement program. She supports a Senate bill, sponsored by Sen. Steve Daines, R-Mont., that would restrict the amount of tax breaks wealthy investors could take from them.
Tax breaks for conservation easements have helped preserve land for outdoor enthusiasts and environmental protection, its backers say. But they’ve also spawned a new class of investments in which middlemen take advantage of assessments of what the land would be worth, if developed, to offer tax benefits that can be larger than the money invested.
Fortune magazine and the investigative site ProPublica described them as “the billion-dollar loophole” in a lengthy story last December. The two publications reported that wealthy investors could get four times, or more, in tax breaks larger than the actual investments because of the way the land is assessed.
The Fortune-ProPublica investigation pointed out that President Donald Trump has gotten at least $100 million in tax write-offs from the program. Former President Barack Obama’s Treasury Department estimated that the tax breaks for wealthy investors cost the federal treasury between $1.2 billion and $2.1 billion annually.
Adam Looney, a Brookings Institution senior fellow in economics and former deputy assistant secretary for tax analysis in the Treasury Department, said those breaks may be higher. He estimated they rose from $971 million in 2012 to $3.2 billion in 2014. He says that “tax-shelter promoters are abusing a tax deduction intended to encourage land conservation.”
“Environmental advocates and conservationists have an opportunity to reclaim this benefit and ensure it remains a tool for conservation going forward, but that will require advocating for firmer rules and stronger enforcement for appraisals, a stronger focus on what constitutes conservation … and greater transparency and accountability over these transactions from both donors, appraisers and land trusts,” Looney says.
Daines’ bill, which was introduced in February and is supported by McCaskill, has not had a hearing. Neither has a companion bill in the House. The Daines legislation limits the amount an investor could claim to 2.5 times “the partner’s adjusted basis in the partnership,” a description of the legislation says.
McCaskill and Sen. Roy Blunt, R-Mo., have long supported giving tax breaks for conservation easements.
But while Blunt voted for making them permanent in December of 2015, McCaskill voted no. She acknowledged then that the $1.1 trillion spending bill contained many projects for the St. Louis region but said she could not vote for it because it was laden with “huge, expensive tax giveaways to the wealthy and special interests — not paid for — that will add significantly to our national debt, and hamper our ability to achieve my goal of a simpler, fairer tax code.”
The senator, who Republicans say is one of their top targets for defeat in 2018, frequently makes that argument. She voted against Republican tax cuts passed in December because, she said, they were skewed to the rich. Republicans attacked that vote as McCaskill opposing middle-class tax cuts.
McCaskill is perennially ranked as one of Congress’ richest members by virtue of her husband’s wealth. She and her husband have lent past campaigns substantial amounts of money, including in her first Senate run in 2006, when then Sen. Jim Talent, R-Mo., tried to make a $500,000 loan an issue. In 2004, the Post-Dispatch reported, Shepard lent McCaskill’s unsuccessful gubernatorial campaign $1.6 million.
An aide for the senator acknowledged that three Shepard investments in McCaskill’s latest financial report were conservation easements: Alvion Investments LLC; Cattail Investment; and Wahoo River Investments LLC. All were described as “unimproved land” in the report.
Alvion is listed as an investment valued at between $250,000 and $500,000 (federal financial disclosure forms have wide ranges of disclosure requirements), while the other two are listed as at least $1 million, and could be substantially higher.
Repeated attempts to reach a Rome, Ga., administrator of those investments went unanswered, and questions about the rate of return promised on them were not answered by McCaskill’s Senate campaign. A McCaskill aide argued that her public actions are totally separate from her husband’s investments, and that her support of the Daines bill and past votes clearly show that.
McCaskill and Shepard file separate income taxes, the aide said.
In a statement issued by her campaign, McCaskill said: “I do not make decisions on public policy based on what’s best for my husband; I make decisions based on what is best for the people of Missouri.
“That’s why I voted against the recent tax bill that primarily benefited large corporations and the wealthy. And it’s why I support the legislation currently before the Senate on conservation easements. I have no involvement in my husband’s numerous and complex investments and I do not consider his business interests when doing my job in the Senate.”
In December, 2016, the IRS issued a directive that said that the Treasury Department and IRS “are aware that some promoters are syndicating conservation easement transactions that purport to give investors the opportunity to obtain charitable deductions in amounts that significantly exceed the amount invested.
“This notice alerts taxpayers and their representatives that the transaction … is a tax avoidance transaction,” the notice continued. It said that anyone involved should be aware that “certain responsibilities may arise from their involvement.”
Backers of the conservation easement syndicates have responded with a new organization, Partnership For Conservation, to fight both the IRS and congressional efforts to rein in the investments. Attempts to reach that organization were unsuccessful. But online, the group raised multiple objections with the IRS’ critique.
Backers of these syndicated easements argued the IRS was overly broad in its description and that going after such investments would defeat the original purpose of conservation easements.