The tax returns of Hunter Biden reveal details about his attempt to settle with the IRS, using millions of dollars borrowed from a friend. Business Insider reviewed hundreds of pages of Hunter Biden’s financial records. These documents – which were partially published for the first time today – include several years of personal tax returns filed by President Joe Biden’s son in the late 2010s and early 2020s.
Details of Hunter Biden’s 2018 Tax Return
Hunter Biden’s 2018 tax return, also known as Form 1040, provides a direct and personal look into his income and relationship with the IRS, subjects that are now at the center of a federal criminal investigation. The insight these returns provide gives a more complex picture of Hunter Biden’s lifestyle and his stance on tax obligations, which is more complicated than the document published last week by special counsel David C. Weiss. This document accuses Hunter Biden of six misdemeanors spanning four tax years, and three felonies – including filing a false return and tax evasion – all in the year 2018. This document attempts to portray Hunter Biden in biased and arrogant terms, as a wealthy and reckless person living off mysterious influence peddling deals, then spending his money on sex workers and hotel rooms instead of paying his taxes.
Hunter Biden’s Attempt to Settle Taxes
The 2018 tax returns obtained by Business Insider and published exclusively on Thursday show that these returns do not contradict that image and do not provide any conclusive evidence of any illegal behavior. However, they complicate the efforts by prosecutors to portray Hunter Biden as a feckless consumer and taxpayer. The return illustrates what Hunter Biden did after hitting rock bottom during his years of addiction and extravagant spending. According to him, he spent most of 2017 and 2018 using cocaine and moving from hotel to hotel. Then in 2019, he got sober, remarried, and found a wealthy friend to rely on – Los Angeles entertainment lawyer Kevin Morris. Morris lent Biden at least $4.6 million while Biden attempted to sort out his affairs with the IRS. Using Morris’s funds, Biden filed overdue tax returns and paid millions to the IRS as back taxes, penalties, and interest.
Details of Hunter Biden’s Payments to the IRS
Below is what Hunter Biden paid to the IRS, broken down by year:
– For 2016, Biden paid the IRS $462,754, which is 29 percent of his income.
– For 2017, Biden paid the IRS $710,598, which is 30 percent of his income.
– For 2018, Biden paid the IRS $659,366, which is 30 percent of his income.
The reported income of Hunter Biden for these three years ranged between $1.5 million and $2.1 million, which is enough to place him in the top one percent of household earnings. His effective tax rate was slightly higher than his peers in the top one percent. They paid the IRS an average of 27 percent of their household income compared to 29 to 30 percent for Biden.
Hunter Biden also paid a larger amount in taxes during these three years than Donald Trump paid over four years of his presidency. Richard Nixon paid a minuscule amount of $1,670 over a two-year period during his presidency, thanks to deductions he made for donating his presidential papers to the National Archives.
Hunter Biden’s Most Serious Charge
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The charges brought by Weiss are that the reported income of Hunter Biden for one of those three years, specifically 2018, is very low. According to the accusation, Biden incorrectly described several transactions – luxury hotel rooms, payments to sex workers, and $30,000 in college fees – as business expenses. All three tax misdemeanors that Hunter Biden is accused of stem from these allegedly misleading classifications.
Today, Business Insider is publishing the full tax return of Hunter Biden for 2018, a key document in the criminal case against him, alleging that in that same year, Hunter Biden underpaid his taxes and reported some personal expenses as business expenses.
The White House did not respond to a request for comment and referred the request to representatives of Hunter Biden. Weiss’s office at the Department of Justice declined to comment.
Business Insider also reviewed Hunter Biden’s tax returns for 2016 and 2017. All three returns show that as Hunter Biden’s condition worsened due to addiction, the amount of money he paid to the IRS in advance through withholdings decreased. The bulk of Hunter Biden’s reported income shifted from wages paid through his private payroll company to business income. One line in the return – $1,956,694 – reflects what Hunter Biden reported earning from “legal and consulting services.”
Business Insider could not gain access to other key documents that support the criminal charges: correspondence between Hunter Biden and his accountants, as well as tax returns for the payroll company. The accusation claims that the payroll company received “around $2.1 million” in 2018 from a fund linked to CEFC China Energy Co., “a Chinese energy conglomerate.” However, while the charges are filled with details regarding Hunter Biden’s overseas deals, all the accusations stem from how he paid taxes on that money, not how he earned it.
In 2018, the revenue for the payroll company was $2,659,014 according to a detailed document from a plea agreement between Hunter Biden’s lawyer and prosecutors that fell apart in court. Hunter Biden’s 1040 return shows only a small portion of that money, which is $159,000 as wages. According to prosecutors, Hunter Biden later told his accountants that much of the remaining amount was used for business expenses that were, in fact, personal.
Robert Nasar, who teaches tax law at Syracuse University, says that criminal tax prosecutions are “very rare” and the amounts of money involved in the accusation are “very small.”
Eric Holder, who led the Justice Department under President Barack Obama, told CNN that he believes political pressures are driving the tax charges. He said, “I spoke to former colleagues, both Republican and Democrat, who were U.S. Attorneys. I asked them, if you had these facts in your office, would you bring this case? And the answer, from every single one, was no.”
Although documents show that Hunter Biden eventually took the matter seriously by making significant payments (albeit delayed) to the IRS, they also show that the money Hunter Biden used to do so was not his own. It was borrowed from the man who became his friend, adviser, and supporter, Kevin Morris.
Kevin Morris is a 60-year-old entertainment lawyer. He has earned tens of millions representing Matthew McConaughey and the creators of “South Park,” and as a producer of the hit musical “The Book of Mormon.” Morris and Biden apparently met in 2019 at a Democratic fundraising party. Since then, Morris has led Hunter Biden’s multiple efforts to defend himself against House Republicans who are investigating him, an effort that includes civil lawsuits, responses to congressional subpoenas, and a documentary mentioned that will launch a counterattack against Hunter Biden’s opponents in the Republican party and the MAGA world.
In
In June, The New York Times reported that Morris “loaned more than $2 million to Hunter Biden to support his family and pay overdue taxes.” The allegation claims that Morris, who is only identified as a “celebrity lawyer” and “personal friend,” paid over $1.2 million to cover Hunter Biden’s expenses, including rent payments on a luxury home in Malibu.
Tax returns for Biden show that the support he received from Morris was much larger. According to Biden’s 2020 tax return, he received “financial support from a personal friend of about $1,425,000.” This support was structured as a loan, “a promissory note due in the amount of $1,417,634 at 5% interest.”
According to Biden’s 2021 tax return, Biden received another financial support of $3,240,355, which was also structured as a loan.
Business Insider did not review Biden’s 2022 return; if Morris loaned him money during that year, the amount is unknown. However, the total amount of $4.6 million documented in Biden’s 2020 and 2021 returns far exceeds the amount of overdue taxes owed by Biden, suggesting that Biden was living off borrowed money from Morris.
A person close to Morris stated that starting in 2020, Morris employed external lawyers to review and certify all loans provided to Hunter Biden.
Other data show that Hunter Biden’s return as a memoir author and experimental artist did not produce taxable income in the millions that he made during his years as a lawyer in Washington, at least in the first two years.
In 2020, according to Biden’s tax return, he earned $187,500 as an author for his book “Beautiful Things,” and another $47,734 from his profession as an artist. Most of the art income came from the sale of artworks to Kevin Morris.
In 2021, according to Biden’s tax return, he earned $374,759 from his book and $83,250 as an artist, with $12,649 deducted for expenses.
Business Insider previously reported on internal documents from Hunter Biden’s art gallery showing that his artworks generated $1.3 million. It is likely that the majority of Biden’s share of that money – 60 percent according to his contract – was paid out in 2022.
Hunter Biden has been a focal point of congressional Republicans in an obsessive and sometimes conspiratorial manner, using his foreign business dealings as part of the basis for launching an official investigation into his father, with a party-line vote in Congress on Wednesday. Republican interest in Hunter Biden began with his lucrative service on the board of Burisma, a Ukrainian energy company, and intensified ahead of the 2020 presidential election when documents allegedly from Hunter Biden’s abandoned laptop were released by Trump supporters.
The Republican Party has not truly abandoned the idea that Hunter Biden could be used to undermine (if not topple) Joe Biden. Their investigations have produced evidence that Hunter Biden benefited from the family name and sometimes arranged brief meetings and phone calls between business partners and his father, some of which occurred while he was vice president. However, despite numerous hearings and speeches about the “corrupt Biden family,” the Republican Party has not produced evidence proving that President Joe Biden was involved in any of his son’s deals.
On Wednesday, Hunter Biden condemned his critics in the Republican Party, calling the efforts to impeach him “baseless,” and suggested that the criminal charges brought against him by the Department of Justice are a result of political pressure. However, he also accepted some degree of responsibility.
Matthias Schwartz is a senior national security reporter at Business Insider. He can be reached at [email protected].
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