What Is Self-Dealing? Donald Trump's Foundation Might Have Violated This Charity Finance Rule

Donald Trump's charitable foundation is in more trouble following the release of new tax returns showing that the charity admitted to violating a legal prohibition against self-dealing. Bustle has reached out to Trump's representatives for comment. According to IRS forms recently released online, Trump's foundation reportedly marked "yes" on the box indicating self-dealing, a prohibited financial strategy that gives money to people closely related to the charity. So what is self-dealing? It's when someone high up in a charity gets paid when they're not supposed to.

Self-dealing is defined as "[transference of] any income or assets to a disqualified person (or make any of either available for the benefit or use of a disqualified person)" by Question 5 of Section VII-B of the 990-PF form issued by the IRS. You can find the "yes" box checked on page five of the Trump Foundation documents. In plain terms, that means you're not allowed pay charitably-donated funds to people who work directly with a charity, or anyone related to someone who works directly with that charity.

The Internal Revenue Code specifies four distinct categories of people who cannot benefit from charities without qualifying for self-dealing, the most pertinent of which seems to be the third and fourth categories — substantial contributors and their family members. Substantial contributors are defined as people or organizations who donate more than 2 percent of the charity's yearly contributions, or people who own more than 20 percent of organizations that are substantial contributors.

According to Schedule B Part 1 of the Trump Foundation document, the Trump Corporation gave about 69 percent of the foundation's contributions in the fiscal year 2015. Although there's no readily available information on the ownership of The Trump Corporation, which is different than the Trump Organization that runs the hotels and major brands, the New York Department of State's records show that Donald J. Trump is the CEO of the corporation, and that only 200 shares of the company exist. Trump has not yet commented on the matter.

The company's reported admission is unfortunately unlikely to change anyone or anything. It certainly won't do any lasting financial damage to Trump or the foundation, as the maximum penalty is only $20,000. Neither are any Trump supporters likely to be persuaded of Trump's unscrupulousness — for those who didn't care enough about Trump's allegedly sketchy dealings before this most recent news won't be likely to change their minds about Trump now.

Significantly more investigation into the matter is needed to figure out the exact nature of the action, and whether it is indeed Trump himself who is at the center of the self-dealing. However, for those who have been following the matter closely, this seems like it might be one more nail in Trump's fraudulent coffin.