According to a recent report, President Joe Biden may owe as much as $500,000 in back taxes. This new scandal is the result of a new non-partisan report, and now a GOP congressman is claiming that Biden improperly avoided paying Medicare taxes before he took office.

Per the request of Jim Banks (R-Indiana), the Congressional Research Service has furnished a report that is analyzing cases where the IRS has won judgments against taxpayers who have paid themselves suspiciously low salaries from “S Corporations” and counted most of the revenue they received as exempt from the Medicare tax.

“Banks said the report shows Biden improperly used ‘S corporations’ to avoid paying Medicare tax on speaking fees and book sales in 2017 and 2018,” the Post reported.

The tax loophole is something that allows self-employed people to set up an S corporation so that they can avoid paying payroll taxes such as Social Security and Medicare taxes.

President Biden and First Lady Jill Biden allegedly raked in as much as $13 million through book sales and speaking fees in 2017 and 2018. However, they only counted less than $800,000 of that income as salary that counted for the Medicare tax. That meant that as much as $12 million or more was exempted from the 3.8% allotted for Medicare.

A Wall Street Journal report from 2019 titled “Joe Biden Used Tax-Code Loophole Obama Tried to Plug” stated, “Mr. Biden and his wife, Dr. Jill Biden, routed their book and speech income through S corporations, according to tax returns the couple released this week. They paid income taxes on those profits, but the strategy let the couple avoid the 3.8% self-employment tax they would have paid had they been compensated directly instead of through the S corporations.”

Rep. Banks, who is chairman of the conservative Republican Study Committee, said, “Joe Biden wants to raise taxes by $2.1 trillion while claiming the rich need to pay their ‘fair share.’ But in 2017, multimillionaire Joe Biden skirted his payroll taxes — the very taxes that fund Medicare and ObamaCare.”

“According to the criteria CRS provided to my office, he owes the IRS and the American people hundreds of thousands of dollars in back taxes,” Banks said. “Every American should know about Joe Biden’s tax hypocrisy.”

Biden continues to brand himself as “Middle Class Joe” and he will frequently demand that wealthy Americans will “pay their fair share.” On Wednesday, Biden made a Twitter post where he wrote, “I’m sick and tired of the super-wealthy and giant corporations not paying their fair share in taxes. It’s time for it to change.”

The CRS report doesn’t name Biden specifically, but it cites plenty of examples of individuals using the S corporation loophole so that they can skirt paying self-employment taxes.

“Courts have agreed with the IRS that shareholder-employees are subject to employment taxes when shareholders take distributions, dividends, or other forms of compensation in lieu of reasonable compensation,” the report states.
When reporters questioned the Biden family regarding this in 2020, they said “The salaries earned by the Bidens are reasonable and were determined in good faith.”

Last May, the Bidens released their tax returns to the public and White House press secretary Jen Psaki said that Joe Biden’s S corporation was going to “remain dormant.”

“Well, I will say first that he received no income from a CelticCapri in 2020, which is the S-corp and it’s dormant and it will not be engaging in any business other than to receive potential royalties, which would relate to books he has already written and of course, as you know, you only know about this because the President released his tax returns, which has long been history — historic precedent even if it wasn’t over the last several years. In terms of additional tax reform proposals, I don’t have any to announce for you today,” Psaki told reporters. “I would note that the President paid a higher rate than most high income individuals and most corporations around the country.”

Of course, if you are not aware of just how an “S” corporation functions, you should first of all note that a dormant one is not automatically renewed by the IRS.

The Bidens were questioned about their “S” corporation in 2019 and they simply replied, “As demonstrated by their effective federal tax rate in 2017 and 2018 — which exceeded 33% —the Bidens are committed to ensuring that all Americans pay their fair share.”

“There’s no reason for these to be in an S corp — none, other than to save on self-employment tax,” Tony Nitti, an accountant at RubinBrown LLP who reviewed the Biden returns said to MarketWatch.

Of course, this isn’t the first time that high-profile politicians have scrutinized this loophole, and it won’t be the last either.