Paul Manafort email from April 2015 to Rick Gates expressing dismay over unexpectedly high tax bill
'How could I be blindsided like this. You told me you were on top of this.' An accountant testified that Manafort recorded what she believed to be fictitious loans to reduce the taxes.
From: rick gates </o=mex05/ou=exchange administrative group
To: paul manafort </o=mex05/ou=exci_
Subject: Re: Tax Extensions
Date: Fri Apr 17 2015 16:34:58 EDT Attachments:
Let me know if you are free to discuss now.
On Apr 17, 2015, at 16:20, Paul Manafort_mote:
I just saw this.
How could i be blindsided like this. You told me you were on top of this. We need to discuss options. This is a disaster
When am i supposed to write this check?
From: Rick Gates
Date: Wednesday, . a AM To: Paul Manafort Subject: Tax
p- i just finished up with Ayliff and according to his projections additional taxes will be owed for 2014 when we file the final returns in October. This is a result of 4 items. - the you submitted to Ayl'rif has $745k of income and interest. it appears to suggest that something was sold but the K-1 does not indicate where the income was derived.
M2. we had an additional $2.7m of revenue (at the end of the year). I am working on reducing this number with write-offs and deductions.
3. Lil?Red - for the extension we are using last year?s number since UBS has been unable to provide anything at this stage. This includes $330k of interest income which was the amount in the 2013 return. This number will move but no one can tell us whether it will be more or less at this stage.
4. Federal tax hike - There is an overall increase in your effective tax rate of 3.7% due to an increase in medicare tax and Obamacare Last year your tax rate was 36%. This year it will be 39.7%
Based on the items above Ayliff estimates you wili have an increase in taxes of $509k for 2014. This
includes using the $800k rollover we had from 2013. One important note. Philip is putting the income from LOAV to your personal return directly. If you were to remove the $745k exposure of LOAV from
your personal return this would reduce the amount of tax owed to $214k. However, then LOAV would required to pay taxes on the income through a separate ?ling.
Also, since we are using the rollover from 2013 against 2014, you will need to begin submitting quarterly tax payments again for 2015. Based on the income for 2014 the quarterly payments will be in the range of $350k per quarter. We can adjust the amount of these payments if we believe the income is going to be lower. Ayiiff says we can use 90% of the income as a guide but to be safe he would use 100% for planning purposes. However, we have the option of not making the ?rst payment this quarter but will it result in a 3% penalty fee. This would amount to a fee of $10k for the quarter.
have attached the summary sheet which shows you the breakouts. Let me know when you have time to discuss.