The House Democrats Have Finally Released Trump’s Tax Returns; on Friday, the federal government disclosed six years’ worth of tax returns belonging to former president Donald Trump, revealing, among other things, that he paid very little in federal income taxes in his first and last years in office by taking advantage of massive losses.
The House Ways and Means Committee finally released the long-secret returns to the public on Friday, capping off a legal struggle that reached the Supreme Court. They corroborate a study from the Joint Committee on Taxation that states Trump claimed huge losses before and throughout his presidency, losses he carried forward to lower or eliminate his tax burden. His tax forms reveal, for instance, that he had a loss of $105 million in 2015 and a loss of $73 million in 2016.
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The Democratically controlled committee only recently got thousands of pages of data from the former president’s personal and corporate tax returns, which cover the years 2015 through 2020. Although the committee voted to make the tax returned public last week, the documents were held back so that private information like Social Security numbers could be redacted.
In the end, it took years of pressure from the public to get the tax returns released, even though previous presidents of the United States had always voluntarily released theirs. Trump and his legal team fought tooth and nail to keep his returns under wraps, claiming that Congress had never used its legislative powers to demand a president’s tax returns, the release of which, Trump declared, might have “dangerous” consequences.
Trump said in a statement after the release, “The Democrats should have never done it, the Supreme Court should have never allowed it, and it is going to lead to bad things for so many people.”
The “Trump” tax returns “demonstrate once again how proudly successful I have been,” the president said. “I have been able to use depreciation and various other tax deductions as an incentive to create thousands of jobs and spectacular structures and enterprises.”
His tax returns illuminate Trump’s allegations that he earned interest on loans to his kids.
Trump’s assertions on his tax returns have been called into question by the bipartisan Joint Committee on Taxation. One red flag was the enormous amount of interest Trump claimed to have earned from loans to his children, which the committee speculated could be an attempt to conceal gifts.
The JCT did not assert that Trump should have paid more or less in taxes for the years it analyzed, but it recommended that an auditor looks at Trump’s loan agreements with his children, particularly the interest rates. For example, if the interest Trump claimed to have charged his children was lower than the going rate, the IRS could classify it as a gift and subject him to a higher tax rate.
For instance, Trump stated that the interest he earned from a loan to his daughter Ivanka Trump in 2017 was precisely $18,000. He noted that his son Donald Trump, Jr. owed him $8,715 in interest and that his son Eric Trump owed him exactly $24,000.
That makes it unclear whether “the loans were bona fide arm’s length transactions, or whether the transfers were disguised gifts that could trigger gift tax and a disallowance of interest deductions by the connected borrowers,” as the JCT put it in its report.
Former supervisory special agent for the IRS Criminal Investigation unit Martin Sheil once remarked, “It’s unusual to have interest in round numbers – very rare.” An auditor may request documentation of interest rates, loan agreements, and payments.
His tax returns reveal that he maintained overseas bank accounts while in office.
Trump’s tax returns show that he used foreign bank accounts between 2015 and 2020. One of these accounts was in China between 2015 and 2017.
Trump was obligated to notify the Financial Crimes Enforcement Network about the accounts (FinCEN). The documents reveal the ex-president kept bank accounts in several different nations, including the UK, Ireland, and China.
Trump Organization lawyer Alan Garten said that the commercial expansion efforts of Trump International Hotels Management in China were related to the Chinese bank account that The New York Times exposed in 2020.
The Trump campaign’s attempt to depict Joe Biden as a “puppet” of China in 2020 led to the discovery of business dealings in China. According to his tax records and financial disclosures, Biden has no business contacts or income from China.
The Committee on Oversight and Government Reform found that the IRS had not conducted any of the required.
The Committee on Internal Revenue Services Oversight and Tax Policy sought the returns under the authority of Section 6103 of the Internal Revenue Code. A significant focus of their research was whether the IRS conducted a proper audit of Trump’s tax returns while in office, as required by the IRS’s mandated audit program for US presidents.
The committee determined that Trump’s 2016 tax return was the only one subject to an IRS “mandatory” audit during his presidency. After Chairman Richard Neal (a Democrat from Massachusetts) initially wrote to the IRS requesting Trump’s tax returns and documents, the request was not fulfilled until the fall of 2019. The presidential audit program is described as “dormant” in the report.
Texas Representative Kevin Brady, the committee’s leading conservative, has called the Democrats’ pursuit of Trump’s tax returns “a dangerous new political weapon that reaches far beyond the former president and overturns decades of privacy protections for average Americans that have existed since the Watergate reform.” Other Republicans have made similar claims.
After a mostly symbolic vote last week, the House of Representatives approved legislation to overhaul the presidential audit process, setting the stage for the next Republican majority. Senate action on the bill is anticipated after the new Congress is inaugurated.
The non-partisan Joint Committee on Taxation analyzed all six of Trump’s tax returns and included their findings in their report. The JCT determined, among other things, that the former president owed no federal income tax for 2017 and 2020. According to the study, Trump paid a total of $1.1 million in federal income taxes in 2018 and 2019, significantly increasing from the $750 he produced in 2017 and the zero he spent in 2020.
The New York Times investigation revealed that for several years before his presidential bid, Trump had claimed enormous net operating losses that he was allowed to carry forward and apply to future tax years, significantly lowering or eliminating his annual income tax due.
In 2015, Trump reported a loss of $105 million; in 2016, it was $73 million; in 2017, it was $45 million; and in 2018, it was $23 million, according to the JCT report.
The JCT analysis also casts doubt on the legitimacy of Trump’s massive claims of charitable giving on many tax forms. The amount of income tax owing may be decreased by claiming deductions.
Trump’s new tax returns will provide insight into his business’ revenues and losses, as well as if and where he has international bank accounts and has paid taxes to other governments. Still, they will not reveal his total wealth or the full scope of his financial operations.