The 2018 individual tax return of Hunter Biden, also known as Form 1040, provides a detailed glimpse into his income and dealings with the IRS. These details are central to a federal indictment focusing on Biden’s financial conduct.
The 56-page indictment by Special Counsel David C. Weiss, released last week, charges Biden six misdemeanors across four tax years and three felonies in 2018, including filing a false return and tax evasion.
Hunter Biden’s tax return reveals extravagant lifestyle
This legal document portrays Biden indulging in an extravagant lifestyle, neglecting his tax obligations.
Business Insider obtained and published Biden’s 2018 tax return, which neither contradicts the indictment’s depiction nor offers clear evidence of wrongdoing.
However, it adds layers to the portrayal of Biden, especially considering his past struggles with addiction and lavish spending. After a turbulent period marked by substance abuse, Biden, in his own words, sought sobriety in 2019, remarrying and relying on the support of Kevin Morris, a Los Angeles entertainment lawyer.
Morris lent Biden over $4.6 million, which Biden used to file overdue tax returns and settle his debts with the IRS, including back taxes, penalties, and interest.
Hunter Biden’s legal battles and plea status
The investigation into Hunter Biden’s financial activities dates back to 2018. While former Attorney General Bill Barr and President Donald Trump had public disagreements, it was Merrick Garland, Biden’s attorney general, who appointed Weiss as special counsel in 2023.
Weiss has since charged Biden with three federal gun charges in September, to which Biden pleaded not guilty. Biden’s stance on the new tax charges remains to be seen.
His attorney, Abbe Lowell, stated on CNN, “He paid all of the taxes that are owed in this indictment more than two years. Nobody in that position would be charged the way he was yesterday.”
Hunter Biden’s legal team communicated to Business Insider that the 2018 tax return contained “simple mistakes, not intentional misstatements” and asserted that Biden had overestimated his taxable income for that year.
They referred to a letter by Lowell to the House Ways and Means Committee, suggesting a likely refund for Biden.
Hunter Biden’s tax payments and uncommon legal charges
Experts point out the rarity of the Justice Department bringing criminal charges in scenarios where overdue taxes have been paid, and only the legality of claimed deductions is in question.
A former prosecutor, who chose to remain anonymous, mentioned to BI that under similar circumstances, it is uncommon to see federal criminal charges, highlighting that typically, negotiations for payment schedules are preferred.
The breakdown of taxes paid by Hunter Biden is as follows:
- For 2016: $462,754 in taxes, 29% of his income.
- For 2017: $710,598 in taxes, 30% of his income.
- For 2018: $659,366 in taxes, 30% of his income.
Biden’s income during these years placed him in the top one percent of earners, with his effective tax rate slightly higher than the average for this group. In comparison, Donald Trump paid $1.1 million in taxes over his four-year presidency, while Richard Nixon paid $1,670 over two years, primarily due to significant deductions.
Allegations and analysis of Hunter Biden’s 2018 tax returns
The crux of Weiss’s allegations is that Biden understated his income for 2018. He allegedly mislabeled various personal expenditures, like luxury hotel stays and payments to sex workers, as business expenses, leading to the three tax felonies charged against him.
Business Insider is now publishing Biden’s complete 2018 tax return. This document is central to the special counsel’s case, suggesting Biden underpaid his taxes and misreported personal expenses as business-related in that year.
The White House redirected comment requests to Hunter Biden’s representatives, while Weiss’s office at the Justice Department declined to comment.
Reviewing Biden’s 2016 and 2017 tax returns reveals a shift in income sources, from wages through Owasco, his payroll company, to business income. His 2018 return indicates a substantial amount reported from “legal and consulting services.”
The indictment alleges that Owasco received about $2.1 million in 2018 from a fund linked to CEFC China Energy Co. However, the charges focus on tax payments rather than the means of income.
Political implications and Hunter Biden’s response
Republicans have long scrutinized Hunter Biden’s overseas business dealings, including his involvement with Burisma, a Ukrainian energy company.
These interests intensified around the 2020 election and remain a focal point for GOP investigations. On Wednesday, near the Capitol and addressing these issues, Hunter Biden criticized his GOP detractors.
He labeled the impeachment effort against his father as “shameless” and suggested that the Justice Department’s charges were politically motivated. Despite this, he acknowledged some responsibility for his past financial mismanagement, citing his struggle with addiction.
Hunter Biden’s reliance on Kevin Morris for financial assistance is a significant aspect of his tax story. Morris, a successful entertainment lawyer, has been a crucial supporter of Biden since 2019.
He provided substantial loans to Biden, which were instrumental in settling his tax liabilities. In 2020 and 2021, Morris’s loans to Biden amounted to over $4.6 million, far exceeding Biden’s tax debts, indicating that Biden relied on these funds for living expenses as well.
Morris’s Role in Biden’s Finances
A close associate of Morris confirmed that external lawyers reviewed each loan made to Hunter Biden. These loans were formalized with interest-bearing promissory notes.
Morris’s involvement goes beyond financial support; he has been actively helping Biden combat investigations by House Republicans, including legal battles and a reported documentary to counter-attack his political adversaries.
Despite his past lucrative earnings, Biden’s recent financial ventures, such as his memoir “Beautiful Things” and his career as an artist, have not generated comparable income.
His earnings from these sources in 2020 and 2021 were modest, and a significant portion of his art income came from sales to Kevin Morris.