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Trump Supreme Court rulings don’t mean transparency on his finances
The Supreme Court’s rulings on President Trump’s financial documents will not produce public information, or his tax returns, before the elections.
WASHINGTON – President Donald Trump on Sunday refused to discuss his tax returns after a report said he paid only $750 in personal federal income taxes in 2016 and 2017, and he paid no income taxes at all in 10 of the previous 15 years.
Trump dismissed a New York Times investigation into his tax records, which revealed a string of financial losses that helped him avoid paying taxes, and showed the president is beset by hundreds of millions in personal debt that will come due within the next four years. The analysis also found Trump earned millions abroad after he took office, raising questions about whether it conflicts with his role as president.
During a news conference Sunday, the president called the report “totally fake news.”
“Actually I paid the tax, and you’ll see them as soon as my tax returns are done,” Trump told reporters at the White House. “It’s under audit. They’ve been under audit for a long time. The IRS does not treat me well.”
Trump was the first major presidential candidate in four decades to refuse to release tax returns and has long used the excuse that he cannot reveal them due to an audit by the Internal Revenue Service. However, an audit does not prevent Trump from releasing his records.
The report found Trump is battling the IRS over a tax refund he claimed of nearly $73 million, the total income tax he paid from 2005 to 2008, with interest. Should the IRS render the refund invalid, Trump would have to pay back the money, with interest, and possible penalties for a total that could “exceed $100 million.”
When pressed to give an estimate of how much he paid in federal income taxes in 2016 and 2017, Trump declined to give any figures.
“I paid a lot and I paid a lot of state income taxes, too,” Trump said. “New York State charges a lot and I paid a lot of money in state.”
Just before the news conference began, The New York Times posted a story saying that Trump paid $750 in federal income taxes in 2016, the year he won the presidency, and another $750 in 2017, his first year in office.
The Times, citing tax return data it obtained spanning two decades, also said Trump paid no income taxes at all in 10 of the previous 15 years, “largely because he reported losing much more money than he made.” Those losses enabled Trump to lower his taxable income, or drop it to zero in some years.
USA TODAY has not confirmed the details of the New York Times report.
The Times said “his reports to the I.R.S. portray a businessman who takes in hundreds of millions of dollars a year yet racks up chronic losses that he aggressively employs to avoid paying taxes.”
The investigation found that while Trump declared losses, he continued to maintain a luxurious lifestyle by deducting taxes on what could be considered personal expenses, including declaring his estates as investment properties and writing off aircraft travel between his properties as business expenses.
Trump wrote off more than $70,000 for hair-styling services during “The Apprentice.”
The president’s daughter, Ivanka Trump, also allegedly received “consulting fees” while working as a Trump Organization employee, further helping to reduce the family’s tax bill.
The Times found that Trump made $73 million from his foreign operations. While most of the revenue came from his golf properties in Scotland and Ireland, he also made $3 million from the Philippines, $2.3 million from India and $1 million from Turkey. After he took office, Trump vowed he would no longer pursue foreign deals.
Top tax takeaways: Seven revelations from New York Times report on Trump income taxes
While Trump paid only $750 in federal income taxes in 2017, he or his companies paid $145,400 to India, $15,598 to Panama and $156,824 in the Philippines the same year.
Trump will have to repay more than $300 million in loans, which he has personally guaranteed, within the next four years.
The president said that details about his taxes would “all be revealed,” but gave no timeline on when he would disclose his records.
Trump is currently embroiled in a legal battle with New York prosecutors seeking his tax records.
Manhattan District Attorney Cyrus Vance is investigating hush money payments allegedly made to two women who claimed to have had affairs with Trump before the 2016 presidential election. Vance’s office suggested in court documents last month that prosecutors are also looking broadly at “allegations of possible criminal activity” at the Trump Organization.
Trump has dismissed Vance’s investigation as a political “witch hunt” and has fought all the way to the Supreme Court to keep his financial records private.
The president is seeking to block a legal challenge from the Democratic-controlled House of Representatives, which is suing to access to his tax returns.
The report comes two days before Trump is set to face his Democratic challenger Joe Biden in the first presidential debate, and just 37 days before the election.
The Times said “additional articles” on Trump’s taxes “will be published in the coming weeks.”
Trump told reporters he has many filings from many of his companies, and “nobody talks about that … They’re very big, they’re very powerful and very accurate.”
Trump’s financial disclosures showed he made at least $434.9 million in 2018, but the tax records show that he had $47.4 million in losses, according to the Times.
The president campaigned in 2016 on his record as a successful businessman who raked in millions by making great deals.
Alan Garten, a lawyer from the Trump Organization, told the Times “most, if not all, of the facts appear to be inaccurate” in the report.
“Over the past decade, President Trump has paid tens of millions of dollars in personal taxes to the federal government, including paying millions in personal taxes since announcing his candidacy in 2015,” Garten told the Times in a statement.
The Times pointed out that Garten used the term “personal taxes,” which could include other federal taxes such as Social Security, Medicare and taxes for his household employees.
Former Joint Committee on Taxation Counsel and tax policy expert Clint Stretch said some of Trump’s actions are question and are moves “an auditor would want to look at hard.”
“Even though the president is heavily invested in real estate which is still a great tax shelter, he appears to have maxed out in a way that’s hard to believe. Keeping legitimate tax losses going for so many years in a successful business would be very unusual,” Stretch said.
“Beyond the real estate, some of the items identified by the Times arouse suspicion that there could be improper deductions on these returns.”
Lisa Gilbert, executive vice president of the consumer advocacy group Public Citizen, called the report “unsurprising.”
“The President has sold the American people a false bill of goods, claiming vast wealth as a qualifier for the Presidency, while this newly released tax information paints a vastly different picture,” Gilbert said. “The revealed documents demonstrate irrefutably the conflicts of interest inherent in Trump’s refusal to divest his assets and the way he has profited off the Presidency. The America people deserve better.”
Democrats quickly questioned the legality of Trump’s tax maneuvers. Richard Neal, D-Mass., chairman of the House Ways and Means Committee, said the report showed how Trump “gamed the tax code to his advantage.”
“Now, Donald Trump is the boss of the agency he considers an adversary. It is essential that the IRS’s presidential audit program remain free of interference,” Neal said. “Today’s report underscores the importance of the Ways and Means Committee’s ongoing lawsuit to access Mr. Trump’s tax returns and ensure the presidential audit program is functioning effectively, without improper influence.”
Senate Finance Committee Ranking Member Ron Wyden, D-Ore., pointed out that middle-class families pay more in taxes than the president.
“If you’re a hardworking middle-class family struggling to pay the bills and save for the future, you pay more in federal taxes than Donald Trump. It’s outrageous,” he said.
The president’s supporters said the news report needs to be scrutinized, noting that the newspaper did not publish the actual returns.
“There’s no way to assess the veracity of the reporting without the returns being published,” said Matt Mackowiak, a Texas-based Republican political consultant. “The New York Times says they have them. Why not publish them? There are only two possible explanations: They were illegally acquired or they don’t exist.”
The Times reported that it “declined to provide the records” to the Trump Organization “in order to protect its sources.” It also reported: “All of the information The Times obtained was provided by sources with legal access to it.”
Contributing: Kristine Phillips