A congressional committee recently conducted an audit of President Donald Trump’s tax returns and found that Trump paid over $4 million in taxes over the course of six years. The report also suggests that there may be inconsistencies in Trump’s tax records which could suggest financial fraud.
House Ways and Means Committee report on Trump’s tax returns
A House Ways and Means Committee report on Trump’s tax returns is expected to be released within a few days. The report will likely include audit notes and other supporting material, and it will provide a deeper look into Trump’s personal finances. However, the release is expected to bring intense political fallout. While Republicans have argued against the release of the documents, Democrats say it is crucial to expose damaging information about the former president. They argue that the IRS has not properly reviewed Trump’s returns and that the agency is not equipped to handle the high-income returns that Trump has filed.
In a previous report, the House Oversight Committee found that the Internal Revenue Service failed to conduct an audit of Trump during his three years in office. Trump carried forward losses from his businesses, reducing his liabilities to zero for several years. He also carried forward $73 million in losses from his 2016 return. It is unclear whether the report will detail the extent of these losses or how much money was given to charity.
House Ways and Means committee members held a four-and-a-half-hour hearing to discuss the report. In addition to discussing the contents of the report, the meeting was held in a closed, private session, which allowed members to discuss the records privately.
The report covers six years of Trump’s personal income and business taxes. Although the committee does not yet know how quickly they will release the tax returns, Democratic ranking member Rep. Kevin Brady said that they will likely release all six years in the next couple of days.
Democrats argued that releasing the tax returns will be important for transparency. It will allow the committee to see the full extent of the president’s finances, including his wealth and the amount of charity he gives. But the report is likely to be heavily redacted to protect sensitive information.
Republicans have long argued that making Trump’s returns public would lead to an unprecedented breach of privacy protections for the average American. That’s why Republicans urged the House to reject the release. One of their arguments is that the release would be politicized, putting the president at risk. Other Republicans, such as Texas Rep. Kevin Brady, said the release could encourage further congressional action.
The House Ways and Means Committee voted along party lines on Tuesday to approve the release of the report. It was the third time the committee had voted on the issue. Members voted 24-16 on the motion. During the last session, the committee was in the middle of a three-year legal battle to obtain the documents.
Last month, the Democrats on the Ways and Means Committee received copies of the President’s federal tax returns. After a lengthy fight in lower courts, the committee won the right to obtain the tax filings.
Trump’s tax liability was $4.4 million over the six years
When he ran for president, Donald Trump boasted that he did not pay federal taxes, but his return showed that he actually carried forward losses on his estate to zero out his tax liabilities. He also took out loans for his children, which he claimed were taxable gifts, and made charitable contributions. In fact, his total income was negative in four of his six years as president. And his taxes were $750 or less in three of those years.
But that’s not the end of the story. The Internal Revenue Service is investigating the Trump’s tax scheme, and there may be more to the story. On Tuesday, documents were released that showed that Trump continued to take advantage of his losses and collect tax benefits through 2018. This raises questions about his business practices and how his taxes are calculated.
After years of trying to keep his tax returns secret, Mr. Trump’s core businesses began to report losses on his returns. His real estate portfolio and golf courses often reported significant losses. Eventually, he reclassified his Seven Springs estate in Westchester County, N.Y. as an investment property. By doing so, the property was allowed to be written off as a business expense.
The House Ways and Means Committee, controlled by Democrats, recently released Trump’s taxes. In a series of reports, the committee reviewed the former president’s tax records from 2015 to 2020. It found that the former president’s total federal tax liability was $4.4 million over those six years. Among other things, the report says the former president and his wife reported negative adjusted gross income in four of those six years.
Moreover, the report notes that the IRS did not review the deductions that Mr. Trump claimed, including the donation of his property to charity and personal expenditures that were deducted as travel expenses. These areas should be further investigated, according to the report.
One example of an improper deduction was when a speaking gig for a charity cost the couple $50, but the report said they only incurred $46,162 in travel expenses. It suggested that the appraiser of the land could be fined for misstating its value. Another example was when a loan to Trump’s sons was listed as a taxable gift, but it was actually a disguised taxable gift.
Another area of interest is the $72.9 million tax refund that the former president received. This is a hefty amount, and it could be related to the billions of dollars in losses that he claimed in 2009.
Aside from Trump’s total tax liability, the committee also found that the former president and his wife paid about $133,445 in taxes in 2018. Trump also carried forward $73 million in losses in 2016.
The IRS assigned just one agent to oversee the audit, which it started in January of this year. That single agent had the most experience with the IRS’s process.
Inconsistencies in Trump’s tax returns could point to financial fraud
It’s been a long battle for Donald Trump to keep his tax returns private. He fought to avoid a mandatory audit, even after the Supreme Court ruled that congressional lawmakers have a right to look over federal tax returns. But in February of 2021, the Manhattan district attorney’s office obtained eight years of his tax returns and subpoenaed his accounting firm and financial information.
The resulting report, which was published in The New York Times, makes a powerful case that Trump may have cheated the IRS. It outlines some of the ways in which Trump appears to have profited from tax schemes dating back to the 1990s. For instance, it shows how Trump set up a sham company that took in financial gifts from him as business transactions. In the process, it shows how his tax records are different from the public record.
The Times was able to verify some of the tax data by comparing it with confidential business records and publicly available documents. However, it was not able to uncover itemized payments to Michael D. Cohen, who was hired to help protect Trump in the Stormy Daniels scandal.
As a result, it’s unlikely that the IRS will investigate any of the allegations made in the Times’s report. And if it does, it’s unlikely it will pursue any of the more serious offenses. Still, the release of Trump’s tax returns could have political implications. That’s why House Democrats have been on a crusade to compel the president to provide his returns.
Last month, the US Supreme Court ruled that congressional representatives can obtain tax returns from the Treasury Department. This was a boon to the Ways and Means Committee, which has a duty to review all of Trump’s income and expenses to determine whether he has been defrauding the IRS.
Although the court ordered the Treasury to release the return, it wasn’t entirely clear what was in the report. One of the stipulations was that the returns be redacted, citing possible “sensitivities.” Another was that the identifying information about taxpayers under examination was not shared with politicians assigned to the committee. Though the report is about Trump, it is also about IRS audits of the wealthy.
While the report was clearly not the first time Congress has looked into a President’s tax records, it did highlight some of the more interesting claims. These include the claim that Trump claimed “overall foreign losses” as an offset against his domestic source income. Also, he used legal fees to reduce his tax burden. Neither of these claims have been substantiated by the IRS, however.
It’s also possible that Trump may have improperly merged his legal fees with his campaign costs. In this scenario, the hush money payment to Daniels was considered part of his campaign expenses. A 3.8 percent payroll tax would have been triggered.
Highlights of the report released Tuesday night include:
- Trump paid $1.1 million in government annual charges during the initial three years of his administration – and no in his last year in the White House. He paid no government charges in the Coronavirus attacked year of 2020 in light of the fact that he announced pay misfortunes of $4.8 million, as per the report ready by the staff of the Joint Board on Tax collection and delivered by the Vote based larger part on the House Available resources Council.
- There were no signs that Trump “made moves to speedily and ideal determination remarkable duty issues while in office,” the report said. The review records showed “proceeded with conflict with the assessment realities” and “endeavors to draw out the assessments.”
- An interior IRS reminder refered to “some ill will” between an IRS direction and one of Trump’s duty lawyers. Albeit the reminder said an IRS chief didn’t really accept that the aversion was justified, it expressed “ill will between the two makes the assessment somewhat more troublesome.”
- One more interior IRS reminder alluded to likely hardships in taking care of one of Trump’s assessment filings. Taking note of the intricacy of the return, the update expressed that to “do a careful survey of these profits we would require a group a lot bigger than the ongoing group.”
- The Available resources report and comparative examination by the Joint Panel on Tax assessment featured Trump expense form gives that need more survey. They incorporate taking business allowances for what ought to be private costs, guaranteeing derivations for huge magnanimous commitments in real money without documentation, and uncommon advance plans.