The “fraud” here is that Cohen’s payment was recorded as legal fees when Bragg says it was hush money plus an extra fee to cover the taxes Cohen owed on legal fees, but wouldn’t have owed for money transferred from Trump to Daniels via Cohen.
Got that?
I don't "got it."
It sounds like Trump paid Cohen a fee recorded as tax-deductable "legal fees" on Trump's books and recorded as legal fees received on Cohen's books (in the amount of $180,000). And then Cohen paid out a non-deductable amount to Stormy Daniels of $130,000.
That sounds like Cohen reported income (legal fees) of $180,000 but had to pay taxes on the full amount (which is why Trump would have included an additional $50,000 to cover taxes.
Sounds pretty straightforward, but not an overpayment of state taxes. And actually, it sounds like Trump deducted his payment to Daniels (via Cohen) from his taxes as legal fees and I'm not sure that's kosher.
What am I missing here?
It’s the order in which the payments were made that you appear to have mixed up.
IIRC, Cohen became aware of the allegations from Stormy Daniels, and proceeded to negotiate an agreement, get it signed, and make full payment of $130,000 to Daniels on his own. Then he billed Trump for $180,000 in legal fees, knowing that receiving all of that money as legal fees (rather than separating out $130,000 as a non-taxable reimbursement) would boost his (Cohen’s) taxable income and cause him to incur additional federal and state (also maybe municipal?) taxes on the full 180k.
You’re aware, are you not, that Trump never knew about the affair allegations, AND never knew about the NDA and hush money payment made by Cohen to Daniels, until after he (Trump) had paid Cohen the 180k?
Start with, why did SDNY decline to prosecute on the identical theory of the case, if Trump made inappropriate business deductions?
Trump’s company paid Cohen $130,000 plus $50,000 for other legal costs incurred. Then the office DOUBLED that $180,000 to cover the taxes, and then the CFO threw in another $60,000 as a bonus. Total received was $420,000 paid out over 12 months in $35,000 installments. None of the payments were made until after Trump was inaugurated in 2017.