Hunter Biden (Photo by Moses Robinson/Getty Images for Usher’s New Look Foundation)
Last week, President-elect Joe Biden’s son Hunter announced to the public that the U.S. Attorney’s office in Delaware is investigating his tax affairs.
According to the Associated Press, the investigation began in 2018, a year before Joe Biden announced his candidacy. At the time, investigators were also looking for potential money-laundering activities. The investigation was kept quiet until recently due to Justice Department guidelines prohibiting its staff from taking overt actions that can affect an election.
Not much is known about the investigation but it was reported that the Department of Justice has issued a subpoena demanding that Hunter Biden disclose information related to two dozen entities, including Ukraine gas company Burisma and his business dealing with Chinese companies.
In 2014, Hunter Biden was hired by Burisma to serve as a member of its board of directors. He was compensated up to $50,000 per month for his work.
It was revealed that Hunter Biden’s former business partner sent him an email informing him that his 2014 tax return needed to be amended to disclose $400,000 in earnings from Burisma.
He also joined the board of directors of the BHR Equity Investment Fund Management Co., a China-based private equity firm in 2013. However, Biden’s lawyer stated that Hunter Biden was not compensated for his work as a board member. He did not acquire an ownership interest in the fund until late 2017, when his father was no longer vice president.
One part of the investigation involved Hunter Biden’s receipt of a 2.8 carat diamond from a Chinese businessman. Hunter, in an interview, said that he felt weird receiving the diamond and gave it to other associates.
How does one give a diamond to other associates? Last I checked, it is quite difficult to cut up a diamond.
President-elect Biden did not comment on the investigation. Nor has the Department of Justice. Hunter Biden said: “I take this matter very seriously but I am confident that a professional and objective review of these matters will demonstrate that I handled my affairs legally and appropriately, including with the benefit of professional tax advisors.”
Hunter Biden does not have a good history when it comes to paying his taxes. The IRS issued a tax lien for the amount of $112,805. The lien was released a short time later which usually means that the balance was paid in full. The District of Columbia issued its own tax lien totaling $453,890. This lien was also released and likely paid off.
Right now, the investigation is just that, an investigation. Assuming Hunter Biden cooperates with the investigation, the prosecution may decide based on the evidence they have to end the investigation without charges or send it to a grand jury who will then decide whether Hunter Biden should be indicted. And during every step of the investigation, Hunter Biden and his lawyers will try to convince the Department of Justice that prosecution is unwarranted.
There is no news that President-elect Biden is under investigation. Nor is there any indication that he has illegally profited from Hunter’s activities.
There seems to be questions as to whether Joe Biden will somehow influence the Department of Justice on the decision to prosecute his son once he is inaugurated next month. He has pledged that he will ensure that the department will maintain its independence once he is in office.
Also, Joe Biden’s pick for attorney general is also likely to be scrutinized by Republican senators about this matter. They may want assurance that everyone involved in the investigation will not be pressured in any way to drop it.
Regardless of what happens, Hunter Biden is not running for office. In light of this investigation, his chances of being nominated for treasury secretary or any position at the IRS is near zero. It would be wrong to attribute Hunter Biden’s transgressions to his father, provided the president-elect did not help him in any way.
On the other hand, Republicans will likely keep a close eye on Hunter Biden’s activities for the entirety of Joe Biden’s first term to make sure that he will keep the Justice Department independent. They will also see it as payback for the Democrats’ and the media’s constant negative stories about Donald Trump’s children. If this is a case where “it’s not a crime if Democrats do it,” there will likely be another shift in power after the midterm elections.
Time will tell as to what the investigation will produce. But Hunter’s tax problems can also be the president-elect’s depending on how he reacts to an unfavorable conclusion.
Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at sachimalbe@excite.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.