Al Sharpton's tax follies
A fascinating article in NRO about Al Sharpton's for-profit businesses and how each and every one that he's created has had tax problems.
In fact, since 1991, Sharpton has had at least three for-profit businesses that have been shuttered by the tax man. It's hard to see if Sharpton has ever paid any taxes on the businesses at all.
So is he a crook? A dumb crook? Or an economic ignoramus? One of Sharpton's former advisors has this to say about the reverend's tax problems:
One of the reasons the IRS investigations always end up with no indictments is because they always start out with the same false premise: “This guy’s a crook, look, he’s operating like a crook, he’s got all these companies, he’s moving money, shelling back and forth,” because it looks like what a crook would do. Except that when you get in there, you realize what a dumb crook this is. He moves all this money around, and he ends up owing more money than he made. You don’t have to believe everything he says, but as a financial “crook,” he does not aggregate “stolen” money well.
In a clear conflict of interest, Sharpton has loaned hundreds of thousands of dollars to his own not-for-profit National Action Network. According to NRO, he often mixes cash from his non-profit and for-profit ventures.
All of this adds up to mass confusion with the books.
So far, every for-profit enterprise started by Al Sharpton and known to National Review Online has been shut down in at least one jurisdiction for failure to pay taxes, a review of public records in New York and Delaware reveals.
Records show that Sharpton’s beleaguered for-profit entities often overlap and intertwine, some sharing ties with the reverend’s nonprofit organization, National Action Network. Their financial records are copious, confusing, and sometimes outright bizarre, and together, they depict persistent financial woes for Sharpton, who also personally owes New York State nearly $596,000, according to active tax warrants.
“He clearly appears — based on the information that’s available to us — to have a history of noncompliance with tax obligations,” says Bernadette Schopfer, the director of taxation at New York’s Maier Markey & Justic, a certified public-accounting firm that has had no dealings with Sharpton or National Action Network. “It appears that [Sharpton] does not file [taxes for his businesses], and then opens up something else. At all the entities we see he has opened up, he has not been compliant with the obligations of the owner of a business. . . . He’s either willful in his behavior, or he’s just sloppy.”
In one example of hide-and-seek with the IRS, Sharpton opened one company just as another was experiencing massive tax problems:
New York dissolved Raw Talent in 2002 for failure to pay taxes, but not before Sharpton opened up a new company, Revals Communications, in 1999.
Revals Communications has its own set of oddities. For starters, various records show it shared Battery Park Place and Broadway office addresses with the soon-to-be defunct Raw Talent.
From the very beginning, Revals Communications ran into tax problems. The records indicate the company either failed to file or failed to pay taxes from 1999 to 2002.
The tax debt started off slowly, at $10,585 in total for the first three years. But in 2002, the same year Raw Talent dissolved, Revals Communications’ unpaid balance ballooned by an additional $215,606. Meanwhile, a 2007 New York tax warrant shows Revals Communications also owed the state $175,962. New York finally dissolved the company in 2009.
Before that, though, the reverend founded yet another for-profit entity, Sharpton Media Group. Unlike the other companies, he originally registered Sharpton Media Group in Delaware, a state where corporations don’t need to disclose much.
Sharpton then registered the company in New York as a foreign limited-liability company in July 2004, three months after it opened in Delaware. In 2007, Delaware dissolved it for failure to file tax records. At the time, an entity report from Delaware says, Sharpton Media Group owed $7,001 in taxes. But records show the entity remains active in New York.
Sharpton and his NAN spokesman claim that he is paying his back taxes to the IRS and the state. But his tax debt in New York has actually grown, according to NRO, so those claims should be taken with an ounce of skepticism.
A tax expert quoted in the article says of Sharpton's business practices, “It appears that [Sharpton] does not file [taxes for his businesses], and then opens up something else. At all the entities we see he has opened up, he has not been compliant with the obligations of the owner of a business. ... He’s either willful in his behavior, or he’s just sloppy.”
Clearly, Sharpton believes that taxes are for the little people. Just as clearly, the authorities fear going after him because of who he is and what he can do to them.