Corrine Brown Trial: Rep. Brown tried to claim $10,000 tax deduction for donation of 'her time'

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While the focus of now-former Congresswoman Corrine Brown’s federal trial so far has been the fraud and related charges she’s facing, Brown is also accused of some tax violations.

And one of her tax preparers is telling the court about some potential questions that have come up on Brown’s returns.

Brown gets her taxes done through Portnoy CPA, and Dawn Wright has worked on those returns for a number of years. Overall, she described Brown’s individual income tax returns as “relatively straightforward”, except for the fact that they were filed in October of the following year- when all of the extensions had been maxed out.

When the returns were taken one year at a time, though, prosecutors started to highlight some questions. Overall, they’re accusing Brown of both under-reporting her income and over-reporting her charitable giving.

For all of the returns in question, Brown’s only reported sources of income have been her salary from the House of Representatives - which has ranged between about $160,000 and $175,000 - and her pension from the state of Florida from her time as a state lawmaker.

Prosecutors asked Wright on several occasions whether Brown had reported any income from other various sources, and her answer was consistently no.

In addition to raising questions about other potential earnings, court filings also indicate the government believes Brown should have reported money she was allegedly receiving from a group she promoted as a charity, One Door For Education. The focus of the trial is that she and two others raised hundreds of thousands of dollars in donations for that group, but used the money instead on personal expenses.

With charitable giving, there were questions not only with the paperwork backing some of the claimed donations, but with what was actually trying to be deducted.

On her 2008 return, for example, Brown claimed about $23,505 in cash or check donations to various churches, Edward Waters College, and the Community Rehabilitation Center. That year, she did not make any “in kind” contributions- or donations of tangible items, like furniture, rather than money.

Included in the documents prosecutors received as a result of a subpoena on Portnoy, though, was a letter from EWC thanking Brown for her “generous gift of conference room furniture and accessories” for the Presidential Conference Room, which was valued at $12,000. The letter indicated the donation was made in 2008, but the letter itself was dated July 2010- which is well after the return itself was filed.

Assistant State Attorney A. Tysen Duva pointed out the discrepancy, but Wright did not offer any explanation.

Brown’s 2009 return includes a letter from EWC with the same date on it, that appears to say the same thing, but instead the value of the donated property is $8,000.

This year’s return did claim an $8,000 in-kind contribution, in addition to $18,120 in various cash and check donations. The largest donation was $12,000 to the Community Rehabilitation Center, but emails between the Portnoy team and Brown’s assistant, Carolyn Chatman, show Brown had not provided the paperwork to support that donation by the time they were ready to file the return.

On October 13, 2010, a Portnoy staffer emailed that they were filing the return without the CRC donation, and that would mean a lower amount Brown would get back. The file the indicates that on October 14th Portnoy got a letter from the CRC thanking Brown for her donation.

That letter was dated March 30, 2010, and signed by the CRC Executive Director Reginald Gaffney, who is now a Jacksonville City Councilman.

Two key questions in 2010’s return are first, a deduction Brown claimed for her time, and second, a substantial donation that was only declared after Portnoy sent Brown a draft of her return- which showed that she would only be getting back $756 dollars.

In the draft, Brown had claimed $5,221 cash and check donations, and $10,000 in kind. A letter from the CRC dated August 17, 2011 thanks Brown for her contribution of “time”, which is valued at $10,000.

“You have contributed to helping to establish a brighter future for the multitude of people in need of every possible ray of hope,” the letter says.

Wright told Brown that time could not be deducted, though. By the time they were set to file the return itself, there was a new letter from the CRC which had the same date as the prior letter, but thanked Brown instead for her $10,000 donation of household goods, law equipment, computers, and other like items.

Another difference from the draft to the final return was a $9,500 cash or check contribution to EWC that wasn’t disclosed on the draft. The addition of that donation boosted Brown’s anticipated return from the IRS to $3,416- or $2,660 more than the draft.

Still a third potential complication with the 2010 return actually came almost two years after the return itself was filed. Brown submitted an amended return because of a few changes in connection to her mortgage rate. The change resulted in Brown owing the government $2,057. Prosecutors have previously alleged that she paid that bill with money that was funneled through One Door For Education.

Brown’s 2011 return claimed another in kind donation to the CRC- $9,000 worth of jewelry, clothing, and other items. That came with $19,720 in cash or check contributions to a variety of churches and a few other organizations, including FAMU, EWC, Urban League, and Bethune Cookman.

Of the cash and check contributions, Wright says they didn’t have documentation to support all of the claims. While they prefer to have paperwork backing all of the claims, she says they were willing to take Brown at her word for the balance, because they didn’t have any reason to believe it wasn’t accurate.

Giving some level of increased confidence is the fact that- for all of these years of returns- Brown authorized electronic filing. To do that, she had to sign a form that included her verifying the accuracy of the return, under the penalty of law.

2011 was another year there was an amended return required because of mortgage rate changes, but Portnoy’s records can not definitively conclude whether Brown actually filed that return. It is the responsibility of Brown, not Portnoy, to file the amended returns.

Wright’s testimony continues Tuesday, and Brown’s assistant who acted as a liason on this matter will also be taking the stand. The testimony will be supplemented with another witness, an FBI Forensic Accountant.

Cox Media Group