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The House House Ways and Means Committee released Donald Trump’s tax returns today, via the relatively undramatic method of just publishing them in the daily Congressional Record, as though they were a bill to fund a new sewage plant in Palm Beach, to choose a perfectly random example of Congress doing its business. Talk about your Friday news dump!
The committee voted last week to release Trump’s tax records from 2015 through 2020, but it took a few days to redact personal information like Social Security and bank account numbers, as if there’s anything in those accounts anyway. The AP notes that the document trove totals just short of “6,000 pages, including more than 2,700 pages of individual returns from Trump and his wife, Melania, and more than 3,000 pages in returns for Trump’s business entities.” Politico reports the tax forms will also be supplemented by a new report on the IRS program that was supposed to audit presidential taxes every year but, oops, didn’t.
Another 722 pages are just the handwritten note “Can’t sleep, VP still watching” over and over again, although it’s unclear why Trump would be so worried about his vice president.
So what amazing secrets are squirreled away in Trump’s taxes? It’s really sweet of you to think we’ve actually read them this soon! Rather, we’re just very subtly inserting this breaking part into the preview that we started too late to post before the taxes were actually released, which are expected to come out sometime this morning just a little while ago. Like we say, subtle.
As we noted last week, the committee already teased some of what’s in Trump’s 1040s and 666s and schedules A through Z-28 — the form to report depreciation on a Bitchin’ Camaro — in a report compiled by staff on the Congressional Joint Committee on Taxation (JCT). Financial journalist David Cay Johnston, who’s followed the spoor of Trump’s taxes for ages, did a deep dive into that document and, once he’d had a long hot shower, declared that he’s pretty darn sure that the full Trump documents will provide evidence of tax criming. As Johnston puts it, Trump “knowingly committed dozens of brazen tax frauds during the six years when he ran for office and was President.”
For instance, there’s Trump’s highly dubious uses — 26 times during the six years covered by the report — of “sole proprietor reports,” aka Schedule C,
that showed huge business expenses despite having zero revenue. That created losses which Trump used to offset his income from work and investments, thus lowering his income taxes. Additional Schedule Cs had expenses exactly equal to revenues while only a few showed profits.
Trump knew this was unlawful because he lost two trials over his 1984 income taxes in which he did the exact same thing, a story I broke in June 2016. Both judges, in scathing opinions, ruled that Trump committed civil tax fraud.
Johnston notes that creative Schedule C filings may not have been “Trump’s most lucrative tax cheating technique, but it is the easiest for jurors to understand should Trump be indicted on tax charges.” All told, he filed 65 Schedule C forms from 2015 to 2020, which “helped him convert a federal tax bill that could have been as high as $46 million into a $2.1 million profit from the federal tax system.” Yes, he actually made a profit on the Alternative Minimum Tax. That’s some minimum, etc., etc., you know the drill.
Also too, Johnston points out that the JCT treats all the Trump businesses named in the Schedule C filings as if they’re legitimate, but adds that some “may not exist except in tax filings.”
Auditors would be smart to demand evidence of business activity such as calendars, correspondence, travel to see potential clients, and the like to determine whether some or all of these businesses exist only on paper, if that.
And if the filings were fraudulent, that’s not proof that Trump is a genius, it really isn’t:
Trump received more than $154.2 million in wages, interest, dividends, capital gains, and pensions over the six years when he ran for president or lived in the White House. Despite this huge revenue stream, Trump reported minus $53.2 million in Adjusted Gross Income, the last number on the front page of your Form 1040 income tax return.
Johnston runs down several other potentially hinky deductions, such as potentially (LOL) bogus charitable donations, deductions for business costs that may have actually been personal expenses, and, as ever, those loans to Eric, Ivanka, and Don Junior that may or may not have actually been an effort to avoid gift taxes.
Even in the preliminary report, Johnston says, the numbers look sketchy:
In four of the six years, Trump’s taxable income was zero.
The report shows that Trump paid no income tax in three of the six years and just $750 in 2016.
Over the six years, he paid $776,126 in net federal income tax. That’s just half of one percent of his positive income, the equivalent of a married couple earning $100,000 paying $500 instead of the typical $8,500. The typical tax rate for Trump’s income class is more than 25%.
Trump received $18.7 million in refunds under the Alternative Minimum Tax, which is $2.8 million more than he paid, a nifty profit off that tax law. Three decades ago Trump lobbied Congress for generous Alternative Minimum Tax refund provisions for himself and other real estate investors.
In four of those six years, all but 2016 and 2017, his Schedule Cs showed losses totaling almost $1.3 million.
OK, but what if he’s not a tax cheat, but just really really bad at business? Haha, who are we kidding? He could (LOL) absolutely be both! Johnston also points out that there’s no statute of limitations on civil tax fraud, which means that even if Trump escapes criminal charges, he could still get his ass sued for back taxes. That said, Johnson adds, the JCT report
also notes another tax integrity issue I have spent years exposing: the least compliant taxpayers get away with wrongdoing because fighting them consumes vast amounts of limited government resources.
Good thing the IRS is hiring a lot more personnel, then.
