The U.S. House Ways and Means Committee released six years of former President Donald Trump’s tax returns on Friday.
Experts will be looking closely at large business losses reported by Trump that significantly reduced his tax liability. For instance, he paid no federal taxes in 2020.
“Trump paid miniscule income taxes in 2015-2020, and almost no income taxes for the prior three decades,” said Steve Rosenthal, a senior fellow at the Tax Policy Center in Washington, in an email.
“We also have learned that, in the 1990s and 2000s, Trump claimed business losses of tens and sometimes hundreds of millions annually. I studied these a few years ago and found some real, and some fake,” he added.
“It is still early to determine how much of Trump’s most recent losses were real or fake,” Rosenthal said.
Analysts are also going to pore over the documents for any details of Trump’s foreign business dealings.
Some certified public accountants who looked at the documents say the returns show that the U.S. tax system has been written to “incentivize” real estate investing.
Bottom line: In order to generate these kinds of losses, you need to be super rich. It’s not a poor man’s game,” said Jonathan Medows, managing member of Medows CPA PLLC in New York.
David Cay Johnston, a Pulitzer Prize winning author and longtime Trump critic, in a post on his non-profit news organization DC Report, called the former president’s tax returns “a rich environment in which questionable conduct is found throughout the filings and needs only seasoned auditors to uncover fictional expenditures.”
He said that Trump was warned by two New York state judges in trials about his 1984 taxes not to deduct huge expenses in businesses with no revenue.
“That Trump persisted in using the same fraudulent technique in six years of recent tax returns is powerful evidence of criminal intent,” Johnston wrote.
In a statement, Trump said his returns show “how I have been able to use depreciation and various other tax deductions as an incentive for creating thousands of jobs.”
Key words: Trump on release of his tax returns
Some experts said they were going to look at the returns for details about Trump’s foreign sources of income. The documents show that Trump had foreign bank accounts while he was president.
Democrats on the Ways and Means Committee said they voted to release the Trump tax returns to help improve the tax laws. Republicans warned that the release would set a precedent where political parties routinely release the tax returns of their opponents.
Another question is why the Internal Revenue Service failed to audit Trump’s tax returns as it routinely does for U.S. presidents.
On Jan. 3, Republicans will take control of the House along with the tax-writing committee.
Rep. Don Beyer, a Democrat from Virginia who is a member of the Ways and Means Committee, said the Trump tax returns “underscore the fact that our tax laws are often inequitable and that enforcement of them is often unjust.”
Rep. Kevin Brady, the Republican from Texas who was the minority leader of the Ways and Means panel and is leaving Congress in January, said Democrats did not release the Trump tax records for any legislative purpose but wanted to “unleash a dangerous new political weapon” at the former president.