Donald Trump asked if they could air the CNN Anderson Cooper tape, claiming it completely exonerates him from a long-standing false accusation. He labeled the situation a witch hunt orchestrated and funded by political operatives for the purpose of election interference. The statement was posted on Donald Trump’s Truth Social platform at 08:20 AM EST on January 25, 2024.
Are we going to be able to show the CNN Anderson Cooper tape today which, among other things, totally exonerates me from a decades old False Accusation? THIS IS A WITCH HUNT CONCEIVED AND FUNDED BY POLITICAL OPERATIVES FOR PURPOSES OF ELECTION INTERFERENCE!!!
Donald Trump Truth…
— Donald J. Trump Posts From His Truth Social (@TrumpDailyPosts) January 25, 2024
E. Jean Carroll, who won $5 million in damages against former President Donald Trump in a defamation case, is now seeking additional damages in a second trial. However, she may face a significant tax bill for these damages due to a law signed by Trump himself during his presidency.
The Tax Cuts and Jobs Act, signed by Trump in 2017 and effective from January 2018, increased the standard deduction but eliminated the ability for plaintiffs in certain cases, including defamation, to deduct legal fees. The law was designed to prevent revenue loss for the government.
Jeremy Babener, president of Structured Consulting and a former fellow in the US Treasury Department’s Office of Tax Policy, explained that defamation cases pose a challenge because they involve both personal and business aspects. While legal fees can often be deducted as a business expense, defamation cases are generally considered inherently personal, making such deductions unavailable.
This situation results in what is known as a plaintiff “double tax.” Before the law, plaintiffs could deduct attorney’s fees on their tax returns, excluding them from the taxable amount. However, the law now limits plaintiffs’ ability to claim deductions for attorney’s fees, leading them to pay taxes on the entire gross recovery, including the portion that goes to their attorneys.
For instance, if a plaintiff receives $1 million in damages from a defamation case and the attorney’s fee is 40%, the plaintiff might only keep $600,000, while the attorney gets $400,000. However, the plaintiff could be taxed on the full $1 million, and the attorney is also taxed on the $400,000 they receive.
E. Jean Carroll’s second defamation trial focuses on whether Trump owes her additional damages after being found liable for defaming her in a previous case. The outcome of this trial will determine the extent of damages Carroll may receive, subject to the tax implications of the law signed by Trump himself.
