Feds built $2.2 million tax case against Hunter Biden dating to 2014 before being thwarted
Earliest evidence involved $400,000 in undeclared income from Burisma energy deal in Ukraine, whistleblowers allege to Congress.
If Hunter Biden pleads guilty next month as expected to two misdemeanor tax evasion charges, he’ll be admitting he shorted the U.S. government of about $100,000 in taxes he owed in 2017-18.
But it’s a far cry from the evidence the IRS and FBI developed showing a pattern of tax evasion and avoidance that stretched back to his father’s term as vice president a decade ago, according to newly released documents and testimony.
Supervisory IRS Agent Gary Shapley told Congress in bombshell testimony made public Thursday that federal agents had evidence Hunter Biden had failed to pay about $2.2 million in taxes dating to 2014 and planned to pursue multiple felonies before they were thwarted by political appointees of the Justice Department.
That alleged interference, according to Shapley and a second IRS whistleblower, ranged from refusing to approve search warrants and specific indictments sought in Washington D.C. and Los Angeles to allowing the statute of limitation to expire on some of the more serious offenses.
The meddling was so extensive, Shapley said, “there is no way of knowing if evidence of other criminal activity existed concerning Hunter Biden or President Biden.”
What IRS and FBI agents were certain of – and career tax prosecutors signed off on after receiving a detailed prosecution recommendation memo – was that evidence supported charging the first son with failing to pay large sums of taxes and in some years even to file tax returns, both whistleblowers asserted.
“The report includes itemized elements of each violation for each year. This recommended felony tax evasion charges, that's 7201, is tax evasion, and 7206(1) is a false tax return, also a felony, for the tax years 2014, 2018, and 2019,” Shapley explained in his transcribed interview with the House Ways and Means Committee.
“And for Title 26 7203, which is a failure to file or pay, that is a misdemeanor charge for '15, '16, '17, '18, and '19,” he also said.
Asked to summarize the magnitude of the unpaid taxes, Shapley did not hesitate. “Altogether it was around $2.2 million,” he answered.
He also matter-of-factly described what he said was a scheme, calling attention to one memo between Hunter Biden and his business associates from 2017.
“The crux of this, as I understand it, is that Hunter Biden had a history of noncompliance with his taxes, and he would often get large sums of money and wouldn't withhold,” Shapley said.
The release of Shapley’s testimony rocked Washington, putting the Biden White House on defense after years of denying Hunter Biden had done anything wrong.
In addition, Hunter Biden’s legal team switched tunes, saying its client wanted to take accountability for being a tax cheat and put the matter behind them. They note he has belatedly paid more than $2 million in back taxes and penalties recently.
The legal team also assailed the whistleblowers, suggesting some of the evidence they gave Congress was misleading, including a text message in which Hunter Biden claimed Joe Biden was sitting right beside him in 2017 when he was pressuring a Chinese businessman to pay him money.
"Biased and politically-motivated, selective leaks have plagued this matter for years," attorney Christopher Carter told Fox news on Friday. They are not only irresponsible, they are illegal. A close examination of the document released publicly yesterday by a very biased individual raises serious questions over whether it is what he claims it to be. It is dangerously misleading to make any conclusions or inferences based on this document."
But the bigger problem the testimony presents for Joe Biden’s 2024 reelection chances is that there is now detailed evidence in public that Hunter Biden’s deal with the Ukraine based energy company Burisma Holdings involved illegality.
Democrats for years suggested reporters like this one who reported stories questioning Hunter Biden’s dealings with Burisma were conspiracy theorists and that former President Donald Trump deserved to be impeached in 2019 for asking Ukraine to investigate the Burisma relationship.
But those long held arguments have crumbled in the last month, first with the revelation that the FBI had a trusted informant who reported as early as 2017 that the Burisma dealing may have involved a $10 million bribery scheme directly involving Joe Biden. The FBI says that evidence is still under investigation.
And then Shapley and his colleague, another IRS agent who blew the whistle, alleged the $1 million in annual payments Hunter Biden got from Burisma also involved crimes in which Hunter Biden constructed a scheme to avoid paying taxes.
“The years in question included foreign income from Burisma and a scheme to evade his income taxes through a partnership with a convicted felon,” Shapley explained. “There were also potential FARA issues relating to 2014 in 2015."
FARA is the acronym for the federal law formally known as the Foreign Agents Registration Act, which requires public disclosure obligations for people representing foreign interests.
Shapley also said “the purposeful exclusion of the 2014 and 2015 years” from Hunter Biden’s current plea deal “sanitized the most substantive criminal conduct and concealed material facts.”
“Hunter Biden still has not reported approximately $400,000 in income from Burisma and has not paid the tax due and owing of around $125,000 even after being told multiple times by his partner, Eric Schwerin, that he had to amend his 2014 return,” he said.
The agents described other concerns they had about how Hunter Biden failed to account for the taxes he owed, alleging he once tried to hide payments to a sex club as business expenses and may have used business proceeds to pay personal credit card expenses for his children.
The agents, Shapley said, were blocked from investigating Hunter Biden’s children’s expenses.
A federal prosecutor “told us it will get us into hot water if we interview the president’s grandchildren,” he told Congress.