Trump’s tax return sheds light on former president’s finances

Six years of federal tax returns by Donald Trump released on Friday show the former president paid very little in federal taxes in the first and last years of his presidency, claiming huge losses that helped limit the amount of taxes. , among other revelations.

The statements, long shrouded in secrecy, were released to the public by the House Ways and Means Committee, after a battle over disclosure that went to the Supreme Court.

They confirm a report issued by the Joint Committee on Taxation that Trump claimed large losses before and during his presidency that he used to reduce and virtually eliminate his tax burden. For example, his returns show that he had losses of $105 million in 2015 and $73 million in 2016.

The thousands of pages of documents from the former president’s personal and business tax returns – which spanned the years 2015 to 2020 – were obtained by the Democrat-run committee just weeks ago after a lengthy legal battle. The committee voted last week to release the tax returns, but its release was delayed to edit sensitive personal information such as social security numbers.

THE CNN is currently reviewing tax returns.

The release of the tax returns follows a years-long search for documents that are normally made public on a voluntary basis by former US presidents.

Trump and his legal team have continually sought to keep his statements secret, arguing that Congress has never exercised its legislative powers to require tax returns from a president, which Trump said could have far-reaching implications.

“The Democrats should never have done this, the Supreme Court should never have approved it, and it will lead to horrible things for so many people,” Trump said in a statement after the release.

“Tax returns once again show how proudly I have been successful and how I have been able to use depreciation and various other tax deductions as an incentive to create thousands of jobs and magnificent structures and companies,” he said.

Taxes shed light on interest Trump claims he received on loans to his children

The Joint Taxation Committee flagged that Trump claimed a large number of questionable items on his tax returns, including amounts of interest he claims he received on loans to his children that the committee said could indicate Trump was disguising gifts.

The committee, which did not say whether Trump should have paid more or less in taxes in the years it reviewed, argued that an auditor should investigate the loan agreements Trump made with his children, including interest rates. If the interest that Trump claims he charged his children does not meet the market rate, for example, it could be considered a gift for tax purposes, obliging him to pay a higher tax rate on the money.

In 2017, for example, Trump claimed to have received exactly $18,000 in interest on a loan he said he gave to his daughter Ivanka Trump. He claimed $8,715 in interest from his son Donald Trump, Jr., and exactly $24,000 from his son Eric Trump.

This raises the question of whether “the loans were bona fide transactions under market conditions or whether the transfers were gifts in disguise that could trigger a gift tax and a ban on interest deductions by related borrowers,” the Committee said in your report.

“It’s unusual to be interested in round numbers — very rare,” said Martin Sheil, a former supervising special agent in the Internal Revenue Service’s Criminal Investigation unit. “An auditor would want to see payments, loan agreements and interest rates.”

Returns show he maintained foreign bank accounts while in office.

Trump had foreign bank accounts between 2015 and 2020, including a bank account in China between 2015 and 2017, according to his tax returns.

Trump was required to report the accounts to the Financial Crimes Enforcement Network. The records show that the former president had accounts in foreign banks in countries such as the United Kingdom, Ireland and China.

China’s bank account, reported by The New York Times in 2020, was linked to Trump International Hotels Management’s business push in the country, Trump Organization lawyer Alan Garten said at the time.

The 2020 China business disclosure came as the Trump campaign sought to portray opponent Joe Biden as a “puppet” of China. Biden’s tax returns and financial disclosures showed no business dealings or revenue from China.

Committee found that the IRS failed to conduct mandatory audits

The committee, responsible for overseeing the IRS and writing tax policy, requested the filings under the authority of section 6103 of the US tax code. Their report focused primarily on whether Trump’s tax returns during his tenure were properly audited by the mandatory audit program for US presidents.

The committee found that the agency opened only one “mandatory” audit during Trump’s tenure — for his 2016 tax return. And that didn’t happen until fall 2019, after Richard Neal, a Massachusetts Democrat, sent for the first time a letter asking the IRS for Trump’s tax returns and information. The report characterizes the presidential audit program as “dormant”.

Other Republicans also criticized Democrats’ efforts to pursue tax returns as having “political ends.” Texas Rep. Kevin Brady – the committee’s top conservative – said a release would amount to “a dangerous new political weapon that goes far beyond the former president and overturns decades of privacy protections for average Americans that have existed since Watergate reform. ”.

Last week, the House passed a bill that would overhaul the presidential audit process in a largely symbolic vote before Republicans won a majority in the new Congress. The legislation is not expected to pass the Senate before the new Congress takes office.

Attached to the report was an analysis of the numbers on each of Trump’s six tax returns by the nonpartisan Joint Committee on Taxation. Among the committee’s findings, the then-president paid very little federal income tax in 2017 — just $750 — and none in 2020.

The report also showed that Trump paid a combined $1.1 million in income taxes in 2018 and 2019, a stark contrast to the $750 he paid in 2017 and nothing in 2020.

For many years before his run for president, a New York Times investigation showed that Trump claimed huge net operating losses, which greatly reduced or simply eliminated his annual income tax.

The Committee’s report also raises questions about the accuracy of some large charitable deductions that Trump has claimed on several of his tax returns. Deductions can reduce the amount of income tax you owe.

While the newly released tax returns do not indicate Trump’s net worth or the full extent of his financial dealings, they could offer a window into his business profits and losses, whether and where he has foreign bank accounts or whether he has paid taxes. to foreign governments.