Daily Tax Report ®

Leaked Tax Details Add Fuel to Fight Over Trump’s Returns (1)

May 8, 2019, 4:25 PMUpdated: May 8, 2019, 4:36 PM

New information about President Donald Trump’s taxes is adding fuel to the already-contentious fight over his returns.

The New York Times, in a May 7 article citing figures from official Internal Revenue Service tax transcripts, reported that from 1985 to 1994 Trump disclosed losses of $1.17 billion from his businesses, including hotels and casinos. This allowed him to avoid paying income tax for eight of those 10 years because of generous write-offs available under the tax code to individuals whose losses exceed their profits in a given year.

These new details come days after Treasury Secretary Steven Mnuchin formally denied House Ways and Means Committee Chairman Richard Neal’s (D-Mass.) request for six years of the president’s individual and business returns. Neal has signaled he will likely sue for those documents. The scope of Trump’s tax avoidance may strengthen Democrats’ calls.

“We need to know the full extent of the damage that’s being done to revenue collection in this country due to uber wealthy individuals like Mr. Trump,” said Rep. Ron Kind (D-Wis.). “That’s another reason we should be looking at his tax returns.”

House Majority Leader Steny Hoyer (D-Md.) said May 8 that he doesn’t think Neal will have to go to court to get the tax returns.

Neal in his request said his committee needed the returns to oversee whether the IRS was impartially performing its job of auditing the president. Democrats in the past have also said they want to see Trump’s returns in order to understand whether, and how, he has benefited from the tax code and the 2017 Republican-led overhaul.

Call for Fairness

Many Democratic presidential contenders have complained that the tax laws disproportionately favor the rich. Beto O’Rourke of Texas and Sen. Elizabeth Warren (D-Mass.), are among those who have offered proposals to increase taxes on the very wealthy.

Sen. Tom Carper (D-Del.) said Republicans missed their chance to make the tax code more fair when they passed the 2017 overhaul.

Trump has criticized Amazon.com Inc. for avoiding tax responsibilities, but he used the same sections of the code to trim down his tax bill.

Sen. Marco Rubio (R-Fla.) said he wouldn’t read the Times story, which he said is an example of weaponizing tax information.

“The very idea, no matter how much you dislike someone, the very idea that we have now entered a territory where people leak individual transcripts to media entities to create political damage is a slippery slope,” he said.

‘Lowest Ethical Bar’

Trump shirked decades of precedent when he declined to release his returns during his 2016 presidential bid.

“Releasing one’s tax returns is the lowest ethical bar for presidential candidates and this blockbuster from the Times further shows why it should be required by law, which is what my legislation would do,” Senate Finance Committee ranking member Ron Wyden (D-Ore.) said in a May 8 email statement.

Wyden’s bill (S. 20), introduced Jan. 3, would require the current president and certain candidates for president to disclose three years of federal income tax returns.

The Times’ reporting “underscores for anybody who is running for president to fully disclose their taxes,” Rep. John Larson (D-Conn.) said May 8.

The article also “shows one of the reasons why Secretary Mnuchin has chosen to break the law, rather than comply with Chairman Neal’s request under section 6103 of the tax code for President Trump’s returns,” Wyden said.

Tax code Section 6103 gives Neal authority to request the president’s tax returns.

—With assistance from Katherine Scott.

(Adds comments in 10th paragraph.)

To contact the reporters on this story: Allyson Versprille in Washington at aversprille@bloombergtax.com; Kaustuv Basu in Washington at kbasu@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Colleen Murphy at cmurphy@bloombergtax.com

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