On Sunday, The New York Times released a bombshell story born of a massive investigation into President Donald Trump’s taxes. Trump has historically been coy about his taxes. He’s the only major presidential candidate since Richard Nixon not to make his tax returns public during his campaign. Since 2016, Trump has claimed that he is unable to release his tax returns because he is “under audit by the IRS.” But the refusal to make his personal finances transparent has fed speculation about what he could be hiding from the public.
Now, the Times report lays bare several revelations about Trump’s tax strategies. Here are some of the key takeaways from the report.
Trump only paid $750 in federal income tax in 2016 and 2017.
The Times examined 18 years of Trump’s taxes, finding that he paid no federal income tax in 11 of those years. The year he won election as president, and his first year in that office, he paid only $750 each, which experts say is the same amount a person making an $18,000 yearly income would pay. Further, it is highly unlikely that a tax return as complex as Trump’s would land on the same $750 amount two years in a row. It raises suspicion.
Trump is being audited for a $72.9 million tax refund.
The main way Trump has been able to reduce his income tax rate is through a massive refund he received starting in 2010. A year later the IRS began investigating this $72.9 million tax refund, which may well be the audit that Trump has claimed prevents him from making his taxes public. When applying for the refund, he cited giant financial losses, which the Times suggest may be connected to his Atlantic City casino failures.
Trump writes off personal indulgences, like $70,000 in haircuts, as business expenses.
The onetime tough-guy host of The Apprentice has spent much of his career curating an image as a self-made billionaire. But he has expensed mansions, private jets, and even hair appointments to his business as a means of avoiding income taxes. Seven Springs, for instance, a Trump estate in Westchester County, NY, served as a summertime family retreat for his children. In 2014, son Eric Trump said as much, referring to the estate where he and his brother summered as “home base for us for a long, long time.” But by classifying the estate as an investment property, as opposed to a private residence, Trump has been able to avoid paying $2.2 million in property taxes on the compound since 2014.
Ivanka may have received questionable “consulting fees”
The report claims that Trump wrote off about $26 million in “consulting fees” across several projects. And while the tax returns do not identify these “consultants,” the consulting fees on several of his documents match, down to the penny, consulting fees that daughter Ivanka Trump reported as income. All of this suggests that Ivanka may have collected independent consultant fees for Trump Organization projects on which she already collected a salary. Her father later wrote-off the consultant fees as a business expense, allegedly as a means to avoid personally paying taxes on them.
But this maneuver is not a unique ploy for getting out of taxes, says the Times. In the past, the IRS has pursued penalties against entities that tried to wriggle out of taxes by paying consulting fees to people who were not, in reality, independent contractors.
Trump’s businesses mostly lose money.
In fact, since 2000, Trump has reported $315 million in losses from his golf courses, entities he often points to as “crown jewels” of his empire. Much of that loss comes from the Trump National Doral, a Miami resort he opened in 2012. And his Washington Hotel, open since 2016, has lost some $55 million.
Meanwhile, the question is raised about how he values these businesses and properties when he applied for the loans that make up is enormous debt obligations.
Trump may owe $421 million in debt within the next four years
Trump owes hundreds of millions in loans that lenders could demand within the next four years. Among the debt is the mortgage he took on Trump Tower back in 2012. He has apparently paid none of the principal on that loan, and the full $100 million becomes due in 2022. All of this means that if he wins re-election, lenders could demand immense amounts from him even while he is serving as president.
National Security Threat?
House Speaker Nancy Pelosi is now sounding the alarm on a potential “national security question,” in regard to Trump’s debts. The Democratic leader cried foul Sunday over “the fact that you could have a sitting president who owes hundreds of millions of dollars that he’s personally guaranteed to lenders, and we don’t know who these lenders are.” She also suggested that he could owe money to foreign entities, including Russian President Vladimir Putin.
Meanwhile, Trump himself brushed aside the bombshell report as “fake news,” but would take no questions about the revelations on Monday. He will appear live on TV for the first presidential debate against Democratic challenger Joe Biden on Tuesday evening.