The Inspector General of the Treasury Department has opened an investigation into a controversial tax break used by close allies of President Donald Trump.
The review of the agency’s Opportunity Zone program follows a request from three Democratic lawmakers, said Acting Treasury Inspector Richard Delmar.
The program, created by the GOP 2017 bill, allows investors to defer capital gains taxes if they are reinvested in a real estate project or a business located in one of some 9,000 qualified census tracts. All capital gains from these investments will not be taxed if held for more than 10 years, a tax gift worth $ 7.7 billion until 2022, according to the Joint Tax Committee .
Among those who have moved to take advantage of the program are the investment firm Cadre, supported in part by Trump’s son-in-law and adviser Jared Kushner, who is seeking investment for “areas of opportunity”. CNN also reported in 2018 that Kushner’s family was real The real estate company Kushner Companies could also benefit from the program.
The company and associated entities, which already owned properties in a region of New Jersey designated this year as an area of opportunity, at the time spent more than $ 13 million to buy new properties that would be eligible for the tax relief, according to Monmouth County. public documents.
There is no evidence that Kushner or his wife, the first daughter and senior adviser to the White House, Ivanka Trump, played a role in the designation of areas of opportunity, which are determined at the state level.
In October, Senator Cory Booker and New Jersey Democratic officials, Ron Kind of Wisconsin and Emanuel Cleaver of Missouri, sent a letter to the agency’s inspector general asking how the areas were selected. NBC News first reported that the IG office is investigating the matter.
“Following several reports of wrongdoing in the implementation of zones of opportunity, which have been drafted and supported by our offices, we consider it crucial that the Office of the Inspector General investigate these allegations,” said wrote the legislator to Delmar. “It was not the intention of Congress that this tax incentive should be used to enrich political supporters or the personal friends of senior government officials, as recent reports indicate.”
Legislators have requested a full review of all areas of opportunity certified by the Department of the Treasury for compliance with eligibility requirements and to provide details of the actions taken by agency officials not in accordance with the guidelines. He also asked for help from the IG office to determine whether there had been a misconduct by individuals or groups who violated the law.
Delmar said he plans to complete the investigation and respond to lawmakers in the spring.