The House Ways and Means Committee released six years of former President Trump’s business and individual tax returns on Friday, totaling 46 documents with hundreds of pages and more than a gigabyte’s worth of data.
The returns are giving a clearer picture of Trump’s financial situation, underscoring how he’s making his money mostly from investments and interest payments rather than from real estate businesses, which are marked down consistently in the red.
Some of these losses were described in the Ways and Means Committee as “large, unusual or questionable.”
While Trump didn’t pay income tax in certain years, the returns show that Trump had been making payments to the government in the form of estimated taxes. But these are in anticipation of future refunds, such as in 2020 when Trump took only a partial refund and left the rest to be returned in the following year.
The returns also show that Trump has been making money from his inheritance.
Following up the paper’s own investigative reporting about Trump’s taxes in 2020, the New York Times reported that in 2018 Trump reported gains of nearly $26 million from the sale of a Brooklyn housing complex inherited from his father.
Further, the returns show that Trump made zero dollars in charitable contributions in 2020 despite promising to give all of his presidential salary away.
The dump of raw returns comes in the final hours of Democratic control of the House and a week after they were summarized in two congressional reports that found Trump was reporting huge losses, greatly offsetting his tax liability, in some cases reducing it to zero.
The reports from the Ways and Means Committee and Joint Committee on Taxation (JCT) also found that Trump was not being regularly audited by the IRS, in an apparent violation of agency policy, which mandates that sitting presidents are to be audited under normal IRS procedures.
Tax experts say they are interested to get a closer look at Trump’s accounting methods and the ways he was able to get out of paying taxes.
Trump reported large business losses, usually in the tens of millions of dollars, in every tax return obtained by the Ways and Means Committee. Several of these losses derive from a larger $105 million loss that was then spread out to reduce Trump’s tax liability.
This is an established accounting practice to get out of paying taxes in the real estate industry, tax experts say.
“The losses seem to be from K-1s (Partner’s share on income and Deductions) received from entities and partnerships that he has shares in,” New York tax attorney Steven Goldburd said in an email to The Hill. “As a real estate professional he is entitled to take these losses. These losses can be from actual losses, but more likely from real estate depreciation expenses. These entities may not actually [be] losing money, but in fact have the depreciation that are wiping out the partnership’s income.”
Analysts are also looking at foreign bank accounts and payment information that may give a clearer picture of Trump’s relationship abroad.
“I’m going to be looking for things like foreign ownership, foreign accounts, foreign ownership of Trump businesses, payments to foreigners,” Steve Rosenthal, an expert with the Urban-Brookings Tax Policy Center, said in an interview. “There’s bound to be some items that may yet pop out to external reviewers that [the JCT] missed.”
The committee released returns on eight of Trump’s nearly 500 business entities. Those eight returns comprise two of Trump’s branding trademarks, three that pertain to his golf club in Bedminster, N.Y., and two high-level holding companies that contain the others.
“Those two upper-tier entities sit at the top of Trump’s LLC empire. The numbers all roll into those, and I’d like to see some aggregate numbers there,” Rosenthal said.
Democrats released the tax returns as part of a probe into the IRS’s presidential audit program, but Republicans have interpreted the release as a personal attack against Trump.
“With the publicly released transcript of Democrats’ secret executive session, Americans now have confirmation that there was never a legislative purpose behind the public release of these confidential records and that the IRS was conducting audits prior to Democrats’ request,” Ways and Means ranking member Kevin Brady (R-Texas) said in a statement on Friday.
“Despite these facts, Democrats have charged forward with an unprecedented decision to unleash a dangerous new political weapon that reaches far beyond the former president, overturning decades of privacy protections for average Americans that have existed since Watergate.”
Brady also warned of future committee actions related to the release of personal tax returns. The Ways and Means Committee will be led by Republicans when control of the House switches next week.
“Going forward, all future Chairs of both the House Ways and Means Committee and the Senate Finance Committee will have nearly unlimited power to target and make public the tax returns of private citizens, political enemies, business and labor leaders or even the Supreme Court justices themselves,” Brady said.
Via The Hill