Courts have ruled that hairstyling is a personal expense that cannot be deducted. Photo / Tom Brenner, The New York Times
It's a small but telling detail in The New York Times's exposé on the president's taxes.
There were many bombshells in The New York Times' exposé last week about President Donald Trump's taxes. He has paid basically zero federal income tax for years. His much-ballyhooed businesses are on the ropes. And that was just the headline.
But it was a juicy and seemingly less significant matter that jumped out at me: Trump spent more than US$70,000 ($106,000) on hairstyling during several years of his run on The Apprentice, his reality-TV show.
That, of course, is quite a lot for any one person to spend on having his hair cut, blow-dried or coloured. But what is really remarkable about the revelation is that Trump's production company deducted his hairstyling expenses from its taxable income, reducing its tax bill.
Tax experts told me that deducting what is ordinarily considered a personal expense is prohibited under almost any circumstances. And they said such a deduction could potentially constitute criminal tax fraud if the cost of the hairstyling was reimbursed by someone else.
Three former NBC executives involved in The Apprentice told me that, while they didn't recall the exact terms of Trump's contract, they were very familiar with the way such contracts are typically written. The cost of hair and makeup for a star of Trump's stature would generally be covered by the show, and Trump would have been reimbursed for any of the costs he incurred.
"I can't think of any circumstances in which Trump would have paid those costs out of his own pocket and not be reimbursed," one of those officials said. The official spoke on the condition of anonymity because he still does business with NBC and Mark Burnett, the producer of The Apprentice, who has also produced The Voice for NBC.
Taxpayers are not allowed to deduct reimbursed business expenses.
"That would be a crime if it's intentional," said Schuyler M. Moore, a tax expert at the law firm Greenberg Glusker in Los Angeles and the author of the legal treatise Taxation of the Entertainment Industry.
In any case, courts have ruled that hairstyling, even for someone on a TV program, is a personal expense that cannot be deducted. (There is no statute of limitations for civil tax fraud. Ordinarily the Internal Revenue Service has three years from the date of a tax filing to begin an audit that can result in criminal charges.)
The White House referred questions to the Trump Organization. Alan Garten, the chief legal officer there, didn't respond to requests for comment.
Trump has always been secretive about the swirling, straw-coloured confection that rests atop his scalp. His flamboyant hairdo became as much a part of his Apprentice trademark as "You're fired!" and has carried over into the White House.
The Apprentice, like every other network reality show, had its own hair and makeup stylists to tend to Trump and the show's contestants. But they didn't cut Trump's hair and were wary of even touching a flyaway strand without his explicit permission. One of the show's stylists, Amy Lasch, told The New York Post in 2016 that Trump arrived on the set fully coiffed. "It's as if he got ready somewhere else first," she said.
It is common for major stars to have their own hair and makeup experts. Often the show pays those stylists directly, but sometimes the star pays and is reimbursed by the show. One reason for such arrangements is that the on-air talent uses nonunion stylists who can't be paid directly by the show.
In interviews, Trump has claimed that his wife, Melania, cuts his hair and that he won't let anyone else touch it. He has boasted that he personally wields the hair spray that keeps it in place.
"Once it's dry I comb it," he told Playboy in 2004. "Once I have it the way I like it — even though nobody else likes it — I spray it, and it's good for the day."
But Trump's tax records reviewed by my Times colleagues show that his television production company, Trump Productions, paid a Manhattan hairstylist and makeup artist, Sharon Sinclair, at least US$13,300 ($20,200) in 2004, at least US$36,400 ($55,300) in 2005 and at least US$20,043 ($30,446) in 2006.
That appears to be roughly US$1,000 ($1,500) an episode, on the high end but hardly unheard-of for Hollywood stars.
The Trump Corp. also paid Sinclair at least US$2,500 in 2007. It's not clear whether that had anything to do with The Apprentice. The grand total for 2004 to 2007: US$72,243.
The tax records don't indicate exactly what services Sinclair performed. But in the credits on numerous episodes of The Apprentice, Sinclair is listed as having styled Trump's hair. She is also credited on some episodes with doing Trump's makeup and on others with both. Sinclair's résumé states that she has also worked for celebrities like Tina Fey, Paris Hilton and Steve Martin. Sinclair didn't respond to a request for comment.
The federal tax code says "personal expenses" cannot be deducted.
"There's no way he could have legitimately deducted hair expenses, whether reimbursed or not," said Moore, the tax lawyer. "There are many cases and audits dealing with this issue."
Indeed, some of those cases specifically deal with television personalities.
In 2011, the US Tax Court heard a case involving a news anchor at the NBC affiliate in Columbus, Ohio, who deducted her hair-care expenses on the grounds that her job required it and that she was a full-time ambassador for the station. The court flatly rejected the claim. Expenses related to "grooming" are "inherently personal expenditures," the court held, even though "these expenses may be related to her job."
In 1980, the court issued a similar ruling in the case of a Boston-area NBC newscaster, who also happened to be a real estate investor. The court noted that his employer required him to maintain an appearance "suitable for services as a television announcer," but didn't reimburse him for his US$10 monthly haircuts. So he deducted the costs. The court rejected the deduction.
It is not clear why Trump, who maintained the same hairstyle on set and off, would deserve different tax treatment. (Expenses for clothing are held to a similar test. The cost of costumes and uniforms may be deductible, but if they can also be worn outside the set or workplace, like with a business suit, their cost can't be written off.)
From 2007 through 2013, a number of Trump companies, including Trump Productions, also deducted a total of at least US$95,000 in payments to the longtime hairstylist of Ivanka Trump, Trump's daughter, who also appeared on The Apprentice.
The former NBC executives said Ivanka Trump's hair and makeup costs would generally have been covered by the show.
A spokeswoman for Ivanka Trump at the White House didn't respond to a request for comment.
Whether these deductions were merely aggressive or illegal would ordinarily be the subject of IRS audits. Trump has said he remains under audit, and The Times reported that one focus is a US$72.9 million refund that he claimed and received. It is not clear whether the IRS has examined the Trump family's hair-care deductions.
An IRS spokeswoman said the agency does not comment on individual tax returns or audits.
Compared with Trump's billion-dollar losses, which offset any profits, US$70,000 in dubious hair-care deductions might seem trivial. But they are emblematic of his overall approach to taxes: No amount is too small to withhold from the government's coffers.
Should Trump face IRS scrutiny for deducting personal expenses from his taxable income, he'll be in knowledgeable hands.
In 1989, real estate mogul Leona Helmsley was sentenced to four years in prison for tax evasion after she tried to write off improvements to her estate in Greenwich, Connecticut, as business expenses.
One of her lawyers was Alan Dershowitz, who defended Trump during the impeachment proceedings.
The US attorney who brought the charges? Rudy Giuliani, who appeared this week with Trump to denounce The Times' reporting and has called Trump a "genius" for finding ways to shrink his tax bill.
Written by: James B. Stewart
Photographs by: Doug Mills and Tom Brenner
© 2020 THE NEW YORK TIMES
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