Bloomberg News reported last week that Mitt Romney established a charitable remainder unitrust in 1996, calling it “one of several strategies Romney has adopted over his career to reduce his tax bill.”
BuzzFeed has obtained a copy of the trust’s return, posted below, through a Democratic source who filed a written request to the Internal Revenue Service in September.
A charitable remainder unitrust — or “CRUT” — reduces taxable income by transferring cash, security, or property to a trust, which disperses yearly payments to the trust’s settlor. After the beneficiary’s death, a charity of his or her choice receives the remainder of the trust’s assets.
Romney’s CRUT, managed by the Boston firm Ropes & Gray, designates the Mormon Church as the recipient of the fund’s remaining assets, according to a listing on Romney’s 2007 financial disclosure file. But while CRUTs are formally tied to charities, they are in fact often used to reduce the donor’s tax burden, and to leave little for the nominal recipient.
In their lengthy piece on Romney’s CRUT, Bloomberg writes that “at the same time [Romney] is benefiting, the trust will probably leave the church with less than what current law requires.” The money left for the church, Bloomberg writes, “has declined from at least $750,000 in 2001 to $421,203 at the end of 2011.”
As noted on Ropes & Gray’s own website, the IRS made CRUT filings — Form 5227 — open to public inspection in 2007. But in order to inspect a return, you must submit a formal request to the IRS which includes specific information about the trust — the name, trustee’s address, and type of return.
Although Romney released a slew of financial disclosure forms and returns in advance of his bid for the presidency — 19 forms and filings, spanning a total of 10 years — his campaign elected not to release the CRUT filing, despite it existing in the public domain.
To keep the charitable remainder unitrust from becoming a tax shelter, Congress passed a change to the law in 1997 requiring that the value of the trust eventually left for the charity must equal at least 10 percent of the initial contribution.
But there is no suggestion that Romney is violating the law. Romney’s CRUT — established in 1996, before the new regulation was enacted — is not obligated to meet that requirement.
“The trust has operated in accordance with the law,” Michele Davis, a campaign spokeswoman, said in an e-mail to Bloomberg.
See the CRUT returns below.
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