House panel releases Trump tax returns in another setback for former president
The Washington Post December 30, 2022
The House Ways and Means Committee on Friday released Donald Trump's tax returns, dealing yet another setback to the former president and 2024 White House candidate as he faces multiple federal and state investigations.
The Democratic-led panel released the financial documents for six years, capping a protracted legal and political battle that could have been prevented had Trump followed presidential precedent and released his returns voluntarily.
Democrats have pushed for more than three years to make Trump's tax returns public, and thousands of pages of documents were finally made available to the Ways and Means Committee late last month after the Supreme Court denied a last attempt by Trump to withhold the records.
The returns show that Trump paid little, if anything, in income taxes compared with his gross income over six years, including the four in which he served as president. Trump lost thousands of dollars in income from 2015 to 2017, largely due to net losses tied to real estate and other businesses. On his 2017 tax return, Trump claimed business expenses and other losses and deductions in excess of $279.5 million, significantly reducing the amount of tax he owed. Those deductions included "helicopter expenses" and foreign taxes paid.
That year, he paid $750 in federal income taxes. Due to significant business losses in 2020, Trump paid no taxes.
The returns also reinforce that Trump - who used to brag of his philanthropic efforts - has given relatively little money to charity. In the 2019 tax year, he reported just over $500,000 in charitable donations and he reported giving no money at all to charity in 2020 - the first year of the coronavirus pandemic that upended the economy, led to widespread job losses and forced many Americans to rely on charity and food banks.
Friday's release from the committee includes thousands of pages of financial documents, which lawmakers made available for the public to download and review.
The release marks another blow to Trump, who is struggling to mount a campaign for president as numerous investigations and controversies continue to swirl around him. His most recent actions, from dining with avowed white supremacists to suggesting terminating the Constitution, have left many in the Republican Party reconsidering whether he remains the most viable candidate to lead the GOP after midterm voters largely rejected candidates backed by the former president.
The release of Trump's tax information is the most sweeping such action taken by Congress in a half-century. A similar action involving a president has not occurred since 1973, when the IRS turned over President Richard M. Nixon's tax returns to a congressional committee.
The IRS handed over the Nixon returns on the day that Congress requested them, a fact noted by House Democrats who were seeking the Trump documents. Republicans denied any similarity, The Washington Post has reported, noting that Nixon requested the investigation into his returns, while Trump fought such a probe.
Trump broke with a decades-long tradition of presidential candidates and presidents by refusing to make his tax returns public, and has for years falsely claimed that he could not release them while under "routine audit" by the IRS.
In response to the release Friday, Trump said: "The Democrats should have never done it, the Supreme Court should have never approved it, and it's going to lead to horrible things for so many people. The radical, left Democrats have weaponized everything, but remember, that is a dangerous two-way street!"
President Joe Biden, as a candidate and officeholder, has released his tax returns.
After the returns were made public, an exchange between CNN's Chris Wallace and Trump during a 2020 debate resurfaced showing the former president repeatedly denying that he only paid $750 in 2016 and 2017, claiming he had instead paid "millions of dollars" in taxes. Three days before the debate, the New York Times had reported on the tax payments based on data it had obtained. The returns prove Wallace was correct.
Trump had pledged on taking office to enter into no new foreign deals to avoid conflicts of interest, but he continued to receive income from foreign business dealings throughout his time as president. Trump filed several FinCEN reports during tax years 2015 to 2017, suggesting that he had financial accounts in the United Kingdom, Ireland and China. He also filed in St. Martin in 2015 and 2016.
He received more than $55 million in gross income from more than a dozen countries, including Azerbaijan, Panama, Canada and Qatar. Many of the foreign locations were places where Trump's company was set to partner on Trump-branded real estate projects, a lucrative licensing business Trump declined to extricate himself from after he was elected.
In 2018, two years into his presidency, Trump no longer claimed financial accounts abroad except in the U.K. According to the Joint Committee on Taxation, Trump paid more in foreign taxes than in net income taxes in 2018.
"As we know from last month's New York trial of the Trump Organization, Trump's tax accountants told him and the organization to clean up their tax returns after Trump took office, and China disappears. So what's that all about?" asked Steve Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center.
In 2020, Trump's tax returns showed that he filed foreign tax credits in more than a dozen countries, including China, Qatar and Israel.
It remains unclear exactly what Trump's business dealings were abroad, especially in China. A report by the Center for American Progress provided some insight after it reviewed Trump's July 2015 financial disclosure that showed that he "owned, had ownership interest in, or was a managing member of" eight corporations. His 2016 financial disclosures showed nine corporations he played a role in, which CAP acknowledges "may not include all of his foreign deals or assets."
While Trump declined to end his foreign business dealings upon taking office, his 2017 return shows he did take steps to sell some stock in companies he would be dealing directly with as president. Trump sold shares of Apple, Exxon Mobil, Caterpillar and PepsiCo in the two weeks before he was sworn in. In most cases, he sold for a profit.
"A president is no ordinary taxpayer. They hold power and influence unlike any other American. And with great power comes even greater responsibility," Rep. Richard E. Neal (D-Mass.), chairman of the committee, said in a statement last week.
Trump filed voluminous tax returns - his 2015 return alone ran for more than 500 pages. Yet the flood of paperwork fails to explain many of the nuances of his financial empire, as he lists pages and pages of deductions described only, over and over, as "other business expenses." It is not clear how deeply the IRS probed for proof of those expenses - and it is easy to see how auditors could be overwhelmed by the sheer volume of opaque filings.
Last week, the Ways and Means Committee revealed that the IRS did not audit Trump's returns during his first two years in office, despite a rule mandating such reviews, and never completed any audits while he served.
The tax returns give some sense of Trump's earnings from various aspects of his business empire, with money coming in from real estate across the country, his TV acting jobs, aviation, an ice rink, a pageant and a slew of other businesses. He reported income from all over the world; in 2015, he made about $52 million of his $316 million gross income outside of the United States, he said.
They also show how he aggressively reported losses, to reduce his multimillion-dollar gross income into negative numbers in most years so he would owe little to nothing in taxes. One page says, for instance, that his restaurants took in $1.6 million in 2015 but spent more than $2 million - a figure that was later amended, in pen, to more than $3.4 million.
His returns show numerous business enterprises that he said had no earnings at all, only expenses - a pattern that the House committee says should have raised red flags for auditors. On one 2015 speaking engagement, for instance, Trump says he was paid $50,000 but spent $46,162 on travel expenses for the appearance. (The tax return doesn't say where Trump traveled to give that speech, which was one of his lowest-paid engagements; he reported making as much as $450,000 as a speaker on other occasions.)
If the IRS completes its audit work and validates some of the concerns raised by the report, the likelihood that Trump could subsequently face serious legal trouble - something beyond adjustments or fines - appears to be low. The Manhattan District Attorney's Office, which has been conducting a criminal investigation of Trump since summer 2018, has had access to Trump's tax returns for more than a year and has not charged him.
Trump's chief financial officer and his company were both convicted of tax crimes after investigators found that the CFO and another Trump Organization executive had received perks such as luxury apartments and Mercedes-Benz vehicles while purposely concealing them from tax authorities.
The release comes as special counsel Jack Smith oversees the Justice Department's criminal probe of Trump's possible mishandling of classified documents at his Florida home and his role in trying to overturn the 2020 election. Last week, the House select committee investigating the Jan. 6, 2021, attack on the U.S. Capitol referred four criminal charges against Trump to the Justice Department: obstruction of an official proceeding of Congress, conspiracy to defraud the United States, inciting or assisting an insurrection and conspiracy to make a false statement.
New York Attorney General Letitia James (D), who has said she had access to Trump's federal income tax returns "for a series of years," has filed a $250 million lawsuit against Trump, his eldest children and executives at the Trump Organization, accusing them of manipulating property and other asset valuations to deceive lenders. Trump and his company have denied the allegations. A trial is set for October 2023.
Sentencing for the Trump Organization on the conviction earlier this month of tax crimes committed by two of its longtime executives is set for Jan. 13. A fine of $1.6 million is possible.
Trump also is facing a probe in Georgia, where a Fulton County grand jury was investigating whether Trump and his allies interfered in the 2020 election in the state. District Attorney Fani Willis (D) has said she expects the grand jury to issue a report on its findings before the end of the year. Willis said she will then decide whether to bring criminal charges.
IRS agents began but failed to complete multiple audits of the Trumps during their time in the White House, according to a letter from acting IRS Commissioner Douglas W. O'Donnell and a detailed report from congressional tax experts, both of which the committee released. The records paint a picture of an agency struggling to meet the demands of auditing a sitting president whose finances involve nearly 500 business entities, many of them actively operating.
The agency began an audit of the Trumps' 2015 taxes in January 2018, O'Donnell said in a letter this month to Neal, with a plan specifically to examine the Trumps' charitable donations, capital gains, supplemental income and the couple's having used losses from one tax year to reduce their taxes in a subsequent year (called a net operating loss carryforward).
As the audit began, an IRS agent began examining a $21.1 million deduction Trump claimed for a conservation easement at his Seven Springs estate in New York, according to a 40-page report from the staff of the Joint Committee on Taxation, which advises Congress on crafting and deciphering tax bills. The easement's value was based on an appraisal, obtained by The Post in 2020, that appears to have relied upon unsupported assertions and misleading conclusions.
The IRS agent investigating the easement visited the property Jan. 24, 2022, according to the report, and met with appraisers on Nov. 22. The agent kept notes mentioning two possible adjustments: disqualifying the entire deduction "based on the fact that the appraisal was not a qualified appraisal" or reducing the deduction to $8.95 million.
The issue remains unresolved, according to the report. Despite that work starting four years ago, O'Donnell, who began as acting commissioner Nov. 12, wrote that the audit had not been completed.
The Washington Post's Michael Kranish and Jonathan O'Connell contributed to this report.