House Committee Votes To Make Trump’s Tax Returns Public

One of the longest running scams Donald Trump has run for years – “I want to release my taxes, but I am under an IRS audit” – has finally come to an end.

CNN supercut of Trump saying he would release his taxes (like every presidential candidate since “I am not a crook” Richard Nixon was busted for tax fraud  in 1973 (but pardoned by Gerald Ford).

It turns out Trump was under a pair of IRS audits in 2016, but when elected president, the “mandatory audit” of presidential tax returns by the IRS did not occur or were not completed. If Trump ordered this and then-IRS Director Charles Rettig complied, this warrants further investigation. Trump tax returns: House committee report shows IRS failed to conduct ‘mandatory’ audits:

The IRS failed to audit former President Donald Trump’s federal tax returns for his first two years in the White House, even though an IRS program states the returns are “subject to mandatory review,” a newly released House committee report disclosed.

Trump filed tax returns in 2017 for the prior two tax years. But the IRS did not start audits on the filings until 2019. And the tax agency started its audit on the same day the House Ways and Means Committee sought Trump’s tax returns and related audits, the report said.

Designated agents from the panel discovered only one mandatory audit was started and none completed during Trump’s four years in office.

“Clearly, the mandatory audit program was dormant, at best, during the prior Administration,” the report said.

Trump also demanded the IRS conduct an audit of his perceived political enemies. Trump Wanted I.R.S. Investigations of Foes, Top Aide Says:

Mr. Kelly said that among those Mr. Trump said “we ought to investigate” and “get the I.R.S. on” were the former F.B.I. director James B. Comey and his deputy, Andrew G. McCabe. His account of Mr. Trump’s desires to use the I.R.S. against his foes comes after the revelation by The Times this summer that Mr. Comey and Mr. McCabe had both been selected for a rare and highly intrusive audit by the tax agency in the years after Mr. Kelly left the White House.

Mr. Trump has said he knows nothing about the audits. The I.R.S. has asked its inspector general to investigate, and officials have insisted the two men were selected randomly for the audits.

Mr. Kelly said he made clear to Mr. Trump that there were serious legal and ethical issues with what he wanted. He said that despite the president’s expressed desires to have Mr. Comey and Mr. McCabe investigated by the I.R.S.

[A]fter Mr. Kelly left the administration, Mr. Comey was informed in 2019 that his 2017 returns were being audited, and Mr. McCabe learned in 2021 that his 2019 returns were being audited. At the time both audits occurred, the I.R.S. was led by a Trump political appointee [John Rettig].

The Inspector General issued a report asserting the rare audits of Comey and McCabe were “randomly selected.” Report Suggests Tax Audits of Trump Foes Were Random, but Leaves Questions”

[T]he 19-page report said there appeared to be some deviations from the I.R.S.’s rigorous rules for random selection when the agency winnowed down the initial pools to make the final selections of the returns that would be audited. That created a risk, the report said, that someone could have had the chance to have a return from the larger pool chosen for the smaller group that would be audited.

As a result, the report said, the inspector general, known as the Treasury Inspector General for Tax Administration, or TIGTA, would continue to look into what happened.

“Although we did not identify misconduct during our review, TIGTA is taking additional steps to assess the process used to select” the returns that would be audited, the report said.

The inspector general has referred the matter to its office of investigations, according to a congressional aide who heard a briefing the inspector general’s office gave Congress on Wednesday.

With this background, let’s take a look at what the House Ways and Means Committee found.

The New York Times – which previously did a deep-dive report into Trump’s tax returns provided by his niece, Mary Trump, Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father – reports, Trump Paid $1.1 Million in Taxes During Presidency, but $0 in 2020, Report Shows:

In his first three years as president, Donald J. Trump paid $1.1 million in federal income taxes before paying no tax as his income dwindled and losses once again mounted in 2020, according to tax data released Tuesday by a House committee.

The data, which includes details of Mr. Trump’s federal tax returns from 2015 through his full term in the White House, shows that he began his presidency suffering the sort of large business losses that had defined much of his career and paid almost nothing in income tax. But his fortunes changed in 2018, as he reported $24.3 million in adjusted gross income and paid nearly $1 million in federal tax.

Update:The New York Times reports that:

His year in the black appears to have resulted largely from the final windfall of the vast inheritance that financed much of his business career — more than $14 million in gains from the sale of his father’s 1970s investment in the Brooklyn housing development of Starrett City.

Mr. Trump’s tax returns show that he was in the black the following year as well, reporting $4.4 million in income and paying $133,445 in tax. But in 2020, as the country staggered under the coronavirus pandemic, his finances reversed course: Mr. Trump reported a loss of $4.8 million and zero income tax.

[T]he new information adds to what is publicly known about Mr. Trump’s income tax history, something he had fought for years to keep hidden. Two years ago, The New York Times detailed tax-return data extending over more than two decades for Mr. Trump and the hundreds of companies that make up his business organization. Those records told a story fundamentally different from the one he had sold to the American public.

His reports to the I.R.S. portrayed a businessman who took in hundreds of millions of dollars a year, yet racked up chronic losses that he aggressively employed to avoid paying taxes. But while the personal income tax data analyzed by The Times ran only through his first year in the White House, 2017, the information released Tuesday encompasses his entire presidency.

As previously reported by The Times, Mr. Trump paid just $750 in federal income tax and reported $12.9 million in losses in his first year as president, in keeping with a long pattern of reporting losses and paying little or no taxes. The newly released data shows that in 2018, his sudden burst of income occurred largely because he had sold properties or investments at a gain of $22 million. He also appears to have exhausted business losses he had been rolling over year after year to reduce his taxable income. The precise source of the income gain is not clear from the reports.

By 2020, however, Mr. Trump had returned to reporting losses. In fact, despite the capital gains that boosted his bottom line in 2018, the entirety of his core businesses — mostly real estate, golf courses and hotels — continued to report losses every year, totaling $60 million during his presidency. He was able to recoup $5.47 million because he had made millions of dollars in estimated tax payments that he ended up not owing.

Tuesday’s report also raises questions about some of Mr. Trump’s business practices, and the committee has requested that the I.R.S. investigate some of them further. Among them are his charitable contributions.

The tax records previously obtained by The Times show that Mr. Trump made significant charitable donations over the years, but that the vast majority of them came in the form of land donations, often after he had exhausted efforts to develop it.

The new tax data showed that while in the White House, Mr. Trump made charitable contributions in cash, something the House committee said warrants further investigation.

“We would have inquired as to whether the large cash contributions were supported by required substantiation,” the report said.

The Times’s findings were cited several times in the report, and helped shape the direction of the committee’s investigation.

For instance, Mr. Trump owns an estate in Westchester County, N.Y., called Seven Springs. For years it was classified as a personal residence. The tax records obtained in 2020 by The Times showed that in 2014, Mr. Trump reclassified the estate as an investment property.

Since then, he has written off $2.2 million in property taxes as a business expense — even as the law allows individuals to write off only $10,000 in property taxes a year.

On Tuesday, the committee revealed that the I.R.S. was looking at this tax maneuver.

The reports also showed that Mr. Trump continued to collect large sums of interest income, a total of $38.1 million during his presidency. They do not disclose the source of that income, but the tax returns previously obtained by The Times showed that through 2017 nearly all of his interest income came from his share of profits earned by a partnership that is controlled by Vornado Realty Trust.

The partnership owns two valuable office towers: 1290 Sixth Avenue in Manhattan; and 555 California Street in San Francisco. Mr. Trump, who has a 30 percent share in the partnership, has no authority over its management, and it has consistently been his strongest-performing asset.

A Wall Street Journal analysis of the tax data released by the committee showed that Trump and his wife Melania declared “negative income” in four of the six years between 2015 and 2020. The Trumps paid $750 or less in income taxes in three of those years. In all, their total net tax liability over the six years was $1.8 million, including self-employment taxes and household employment taxes.

The tax data showed the Trumps’ income fluctuating wildly, rising to as high as $24 million in 2018 after selling properties and investments before falling to $4.4 million in 2019, the only other year they reported positive income.

Read Congress’ reports on Trump’s tax returns.