Calls on Trump to Release at Least 2015 Tax Returns, Which Are Not Under Audit
Yesterday, the New York Times published new documents that showed Trump engaged in “legally dubious” schemes to avoid paying millions in federal income taxes, even as his own lawyers made clear they likely would not hold up to IRS scrutiny. Trump’s campaign claims the reporting is not true, yet they refuse to produce the only evidence that could prove the Times wrong: Trump’s tax returns.
In response to the new report, Hillary for America deputy communications director Christina Reynolds issued the following statement:
“In the wake of a blockbuster report showing that even Trump’s own lawyers thought the IRS would likely find the “legally dubious” scheme he used to avoid taxes was against the law, the Trump campaign still refuses to release his tax returns. While breaking a precedent running for 40 years, Trump has clung to the excuse that he is under audit, despite no proof that he is and no prohibition for releasing returns under audit. Given that Trump was required to file his 2015 taxes recently, he has no reason to withhold it since it is too soon for him to possibly be under audit for those year. There’s no excuse left for Trump—if he’s not still using these “dubious” schemes to avoid paying taxes, he needs to prove it with his most recent tax returns.”
Trump and his campaign continue to dodge disclosure of these critical documents that could shed light on important issues including his wealth, his questionable charitable giving, his foreign and domestic business entanglements, his personal tax rate and more. The Times’ reporting raising important new questions that underscore the urgency in releasing the tax returns before Election Day.
Key Point: “As he scrambled to stave off financial ruin, Mr. Trump avoided reporting hundreds of millions of dollars in taxable income by using a tax avoidance maneuver so legally dubious his own lawyers advised him that the Internal Revenue Service would likely declare it improper if he were audited.”
- “Tax experts who reviewed the newly obtained documents for The New York Times said Mr. Trump’s tax avoidance maneuver, conjured from ambiguous provisions of highly technical tax court rulings, clearly pushed the edge of the envelope of what tax laws permitted at the time. ‘Whatever loophole existed was not ‘exploited’ here, but stretched beyond any recognition,’ said Steven M. Rosenthal, a senior fellow at the nonpartisan Tax Policy Center who helped draft tax legislation in the early 1990s.”
- “One letter, 25 pages long, analyzed seven distinct components of Mr. Trump’s proposed tax maneuver. It found only “substantial authority” for six of the components. In the stilted language of tax opinion letters, the phrase “substantial authority” is a red flag that the lawyers believe the I.R.S. can be expected to rule against the taxpayer roughly two-thirds of the time. In other words, Mr. Trump’s tax lawyers were telling him there were at least six different reasons the I.R.S. would likely cry foul if he were audited.”
- “Regardless of whether the I.R.S. objected, Mr. Trump’s tax avoidance in this case violated a central principle of American tax law, said Mr. Buckley, the former chief of staff for Congress’s Joint Committee on Taxation, who later served as chief tax counsel for Democrats on the House Ways and Means Committee. ‘He deducted somebody else’s losses,’ Mr. Buckley said.”
IN CASE YOU MISSED IT
Donald Trump Used Legally Dubious Method to Avoid Paying Taxes
New York Times
By: David Barstow, Mike McIntire, Patricia Cohen, Susanne Craig, and Russ Buettner
October 31, 2016
Donald J. Trump proudly acknowledges he did not pay a dime in federal income taxes for years on end. He insists he merely exploited tax loopholes legally available to any billionaire — loopholes he says Hillary Clinton failed to close during her years in the United States Senate. “Why didn’t she ever try to change those laws so I couldn’t use them?” Mr. Trump asked during a campaign rally last month.
But newly obtained documents show that in the early 1990s, as he scrambled to stave off financial ruin, Mr. Trump avoided reporting hundreds of millions of dollars in taxable income by using a tax avoidance maneuver so legally dubious his own lawyers advised him that the Internal Revenue Service would likely declare it improper if he were audited.
Thanks to this one maneuver — which was later outlawed by Congress — Mr. Trump potentially escaped paying tens of millions of dollars in federal personal income taxes. It is impossible to know for sure because Mr. Trump has declined to release his tax returns, or even a summary of his returns, breaking a practice followed by every Republican and Democratic presidential candidate for more than four decades.
Tax experts who reviewed the newly obtained documents for The New York Times said Mr. Trump’s tax avoidance maneuver, conjured from ambiguous provisions of highly technical tax court rulings, clearly pushed the edge of the envelope of what tax laws permitted at the time. “Whatever loophole existed was not ‘exploited’ here, but stretched beyond any recognition,” said Steven M. Rosenthal, a senior fellow at the nonpartisan Tax Policy Center who helped draft tax legislation in the early 1990s.
Read the rest of the article on the New York Times.