Tax experts say that Texas Sen. Ted Cruz could face scrutiny from the Internal Revenue Service (IRS) overpayments related to his podcast.
Questions have been raised about a $630,000 donation that iHeartMedia, which broadcasts the podcast Verdict with Ted Cruz, made to Truth and Courage Super PAC, which supports the Party’s re-election campaign Republic.
Cruz’s office and iHeartMedia have denied that the money constitutes a direct payment to Cruz, as the senator was not paid to host the show, and have denied any legal or ethical violations.
A Cruz campaign spokesman told Newsweek: “Senator Cruz did not receive any income related to the podcast, nor did he direct any income to anyone.
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“Tax experts have suggested that even if Cruz wasn’t paid directly by iHeartMedia, he might still have to report it as income to prevent the IRS from reporting it.
“It would still be his income because he has earned it.” It’s not like a charity is auctioning off an hour of an accountant’s free work or something. It’s paying for a series of appearances by Ted Cruz and no one else.
“You can’t tell the government it’s not my money if you’re the one who earned it,” Galle added. “It doesn’t matter where the money goes.”
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Calvin Johnson, a tax professor at the University of Texas at Austin, agrees that Cruz may still have to report this amount as income, even if he is not personally compensated, because the money continues to support him through advertisements paid for by Super.
PAC to help him in his re-election campaign. “The tax law is absolutely clear that transfers related to the provision of services — and that is what this is — are taxed on services,” Johnson told the Chronicle.
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However, Andy Grewal, a professor of income tax law at the University of Iowa, argued that Cruz would only be wrong if the senator were entitled to pay for the podcast but asked iHeartMedia to pay the super PAC to avoid having to report on the tax bill.
“If he had just shown up, I wouldn’t have seen him,” Grewal told the outlet.
A spokesperson for Cruz’s 2024 campaign previously told Newsweek that the senator appears on Judgment “three times a week for free” and that any suggestion of related wrongdoing to the $630,000 figure attributed to Super PACs is simply “the mainstream media and the Democratic Party coordinating lazy attacks in an election year.
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