One of the greatest secrets of American politics – what's in the tax returns that President Donald Trump hasn't published in a long time – has finally been revealed by the New York Times.
Times journalists Russ Buettner, Susanne Craig and Mike McIntire received "tax return data spanning more than two decades" relating to the president and published their findings in a new bombshell report. (You do not publish the documents yourself to avoid endangering their sources.)
For years the political world has speculated on what Trump was trying to hide by withholding his returns and falsely claiming he could not release them until the IRS completed an expanded review. Was it so that in a few years' time he didn't pay any income tax at all? Was it that he was far less successful as a businessman than he allowed himself to be? Was he asking for legally dubious deductions?
It turns out the answer is all of the above.
The Times story makes it clear that the supposedly wealthy president has often paid no income taxes while his companies have regularly lost huge sums of money and he himself has been hooked to increase loan amounts. All of this is politically detrimental enough to Trump's image and probably sufficient reason to work hard to keep tax returns confidential.
But there's probably another reason for Trump's reluctance – because reporters would scour his returns for legally dubious claims and put the pieces together of how he tried to snooker the IRS.
That's exactly what happened here. To take just one example, Buettner, Craig and McIntire found that mysterious write-offs on consulting fees for certain Trump projects matched the amounts paid to Trump's daughter Ivanka Trump. And there's so much more to the excellent piece by The Times.
A major theme of the Times article is that the IRS scrutiny of Trump is extremely serious and that he could end up owing the U.S. government more than $ 100 million. The review of his tax returns by reporters could not only be politically problematic for Trump, but also financially and legally problematic.
The tax returns show that Trump paid little tax, that his companies are losing a lot of money, and that he is heavily in debt – which doesn't look good politically
When Trump first ran for the Republican President nomination in 2016, he was heavily criticized by his rivals for failing to publish his tax returns, as previous presidential candidates have. At first he had promised to release her. But he kept making excuses, his most important being the false claim that he could not approve the returns yet because they were being checked.
Trump's tax return became the white whale of his critics, and everyone from reporters to House Democrats to New York prosecutors tried to get a grip on them.
After more than four years, Buettner, Craig and McIntire of the Times got the goods.
Her story reveals the following: Trump actually paid no income taxes from 2011-2014, and the small amount of $ 750 in 2016 and 2017. He achieved this by claiming his companies lost massive amounts of money. He has $ 421 million in debt due over the next few years, and he could owe the U.S. government an additional $ 100 million if he loses his exam battle with the IRS.
There are many political reasons why Trump was reluctant to publish these tax returns.
For one, there's the fact that he paid so little income tax, which is going to look bad from the point of view of many Americans who paid far more taxes than him. You may wonder why Trump would care, given his longstanding ability to break free from political scandals – but that ability wasn't as clear in 2016 when he began holding back returns. In addition, Trump's first campaign came just a few years after the then Sen persecuted Mitt Romney. Harry Reid's false claim that Romney hadn't paid taxes for ten years. Politically conventional wisdom was that a wealthy candidate who had paid little to nothing in taxes would be penalized in the election.
But the specific reason Trump didn't pay taxes is embarrassing – it's because his companies lost tons of money. (At least that's what he claims – remember, the tax return information is his representation of his company to the IRS.)
To be clear, some parts of Trump's business are really making money – for example, The Apprentice has cashed in and Trump Tower is profitable. However, he avoids paying taxes on these profits because he has claimed such massive losses from other parts of his business empire.
Trump may also have withheld returns to avoid legal and financial harm
The other big reason Trump probably wasn't ready to post the returns is that there are clearly some legally questionable things going on.
For example, the Buettner, Craig, and McIntire records show that Trump wrote off alleged $ 26 million consulting fees as business expenses between 2011 and 2018. However, reporters took the extra step of figuring out where some of that money is going – and they found that some of those write-offs matched payments to Trump's daughter Ivanka, as reported on their own financial disclosure forms.
Now Ivanka was Executive Vice President of the Trump Organization – not an outside advisor. And sources told the Times that certain projects for which Trump's companies had written off consulting fees did not involve outside consultants.
The Times story also mentions other questionable practices – Trump called a mansion in Westchester, New York, "an investment property" so he could write off property taxes on it, but Eric Trump called it "our connection." The Trump Organization also wrote off Donald Trump Jr.'s legal fees for the attorney who represented Don Jr. in the Russia investigation.
This is likely just scratching the surface – the Times reporters say more stories are to come. The bigger point, however, is that Trump has a history of questionable tax practices, is facing an exam where he has a lot at stake, and appears to find himself in a financial position where it can only be a problem if reporters his Examine tax returns carefully for him.