Did Hillary Reduce Her Tax Liability By Donating $1 Million To Herself Through The Clinton Foundation?

An internet meme that accuses the Democratic presidential candidate, Hillary Clinton, of reducing her tax liability by deducting charitable “donations to herself” through the Clinton Foundation has gone viral online.

According to the meme, a total of $1,042,000 in charitable donations that Clinton deducted on her 2015 tax return included $1 million that she allegedly paid or “round-tripped” to herself through the Clinton Foundation.

“Hillary deducted $1,042,000 in charitable contributions from her taxes,” the viral meme reads. “$1,000,000 of those contributions went to the Clinton Foundation. She cut her tax bill by $1 million by donating to herself. Remember that next time you pay your taxes.”

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Regardless of the obvious error of equating a tax bill with a tax deduction, the meme intends to accuse Clinton of financial chicanery by pretending to donate to charity when, in fact, the sum deducted from her taxable income to reduce her tax liability was effectively a payment to herself through the Clinton Foundation.

The online fact-checker Snopes sought to debunk the meme, arguing that its allegation against Clinton was not accurate.

Hillary Clinton’s joint 2015 tax filing with her husband, former President Bill Clinton, released to the public earlier in 2016, reveals that the couple claimed a total of $1,042,000 as charitable donations for that financial year, as the meme claims.

The breakdown (see below) included a total of $42,000 to Desert Classic Charities and $1 million to the Clinton Family Foundation.

However, the sum of $1 million to the Clinton Family Foundation is not equivalent to a “cut in her tax bill” as the meme states, and it was only a deduction from her taxable income.

Quoting Inside Philanthropy, Snopes points out that the Clinton Family Foundation that received the princely sum of $1 million is a separate entity from the Clinton Foundation. According to Inside Philanthropy, the Clinton Family Foundation is “a traditional private foundation that serves as the vehicle for the couple’s personal charitable giving.”

The Clinton Family Foundation has neither a staff that receives salaries nor offices that incur recurrent maintenance expenses, such as rent, Snopes notes.

Donations to the Clinton Family Foundation by the couple are in turn disbursed to multiple charities; one of which is the Clinton Foundation.

The Clinton Family Foundation’s 2015 tax filing has not yet been made public, but the tax return filing for 2014 shows that Bill and Hillary Clinton made charitable donations of about $3.8 million through the Clinton Family Foundation, with about $1.8 million going to the Clinton Foundation.

In 2013, the Clintons gave out a total of about $1.8 million in charitable donations through the Clinton Family Foundation with about a fifth of the total going to the Clinton Foundation.

Inside Philanthropy gives detailed insight into the charitable activities of the Clinton Foundation here and here. The website reveals that the foundation donated to scores of non-profit organizations, including the School of American Ballet, the Arkansas Children’s Hospital Foundation, the Wellesley College and the Elie Wiesel Foundation for Humanity.

The charitable activities of the Clinton Foundation are monitored closely by reputable independent rating services, such as non-profit Charity Navigator which awarded the Clinton Foundation high marks, a total of 94.74 out of 100 for financial accountability and transparency in 2014.

Snopes uses the high rating by Charity Navigator to defend Clinton against the accusation that she donated $1 million to herself through the Clinton Foundation as part of a strategy to reduce her tax liability. But the detractors and political opponents of the Clintons insist that donations by the couple to the Clinton Foundation return mostly to their pockets.

The Daily Caller made such an allegation in the case of the Clintons’ donation to Desert Classic Charities. According to the website, IRS filings revealed that Doug Band, a Clinton Foundation adviser and long-time aide to the Clintons, was on the board of directors of that organization through 2014.

“Desert Classic Charities effectively returned that donation back into the Clinton orbit,” the Daily Caller alleged. “Its 2015 tax filing shows that it contributed $700,000 to the Clinton Foundation for work on obesity programs. The group handed out $1.6 million in grants that whole year.”

“The contributions can hardly be seen as altruistic,” the website added, “since the money flowed back to an entity they [the Clintons] control.”

The Clintons have been accused more broadly of using the Clinton Foundation for unethical pay-to-play schemes involving acceptance of donations from foreign interests while Mrs. Clinton served as secretary of state. They have also been accused of using the foundation to enrich themselves unethically.

For instance, an article by the Washington Examiner claimed that an investigation by Charles Ortel, a noted Wall street analyst, found that the Clinton Foundation’s books were “riddled with financial inconsistencies that rise to the level of ‘fraud.'”

According to Ortel, there were huge gaps in the amount that donors to the foundation claimed and the amount the foundation claimed it received.

The Washington Examiner also alleged that the multiple charities under the Clinton Foundation perform suspiciously overlapping functions that lead to equally suspiciously overlapping finances. This, it was alleged, concealed important transactions and generated complex paper trails riddled with seeming errors and duplicated entries.

According to the Washington Examiner, the questionable activities and record-keeping practices of the Clinton Foundation forced the authorities in November to require the Clinton Health Access Initiative, one of the entities under the Clinton Foundation, to re-file its tax return after investigations revealed that a number of big foreign donations were skipped in the entries.

The website also alleged that the Clinton Foundation was eventually removed from the Charity Navigator website due to its “atypical business model,” which makes it difficult to track its finances and activities through “conventional procedures for assessing traditional charities.”

Allegations of improprieties caused the non-profit status of Bill Clinton’s American India Foundation to be revoked by the authorities in Illinois earlier in 2012, and in 2015, the organization was listed as not being “in good standing,” according to the Washington Examiner.

The foundation held a gala in Atlanta in March 2015 despite not being registered in the state of Georgia to solicit funds, the Washington Examiner also reported. Similarly, in Massachusetts, the foundation’s non-profit status was revoked in June 2014 and was not reinstated until March of 2016.

But the Washington Examiner quoted Charity Navigator’s Sandra Miniuttti, saying that the complexity of regulations across state boundaries often cause unintended problems for otherwise legitimate and well-meaning charities.

“The current state registration system is complex, bureaucratic and out-of-date with the modern times,” she said. “It was conceived before the internet and technology made it easy for charities to solicit across state lines.”

“While we don’t condone non-compliance, it is not particularly surprising to hear of an organization accidentally being out of compliance,” Miniutti added, according to the Washington Examiner.

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