Checks & Imbalances: Inside Trump’s Tax Returns

Trump Paid $0 In Taxes In 2020—Here’s What To Know About His Tax Returns

“After a years-long legal battle over former President Donald Trump’s tax returns, a House Committee report released Wednesday revealed he paid $1.1 million during his presidency, but $0 in 2020, ending the former president’s efforts to keep his tax returns private,” reports Brian Bushard.

As a presidential candidate in 2016 and as president in 2017, he paid $750 each year in net federal taxes. In 2018, he reported $24.3 million in gross income—nearly double what he made the year before ($12.9 million). He paid significantly more in 2018 ($999,466) and 2019 ($144,445). In 2020, the documents show Trump reported a loss of $4.8 million and no income taxes paid, as the economy was crippled by the Covid-19 pandemic…

The release of Trump’s tax returns comes as the House Ways and Means Committee issued a report claiming the IRS did not properly audit Trump during his first two years in office, something it’s been required to do for all sitting presidents since Richard Nixon’s administration.

Watch: Inside Trump’s Tax Returns—Forbes Breaks Down The Major Revelations Post-Release

Tip Me

Any tips or suggestions? Email me at zeverson@forbes.com or call/SMS/Signal 202.804.2744. Follow me on Mastodon at @z_everson@journa.host. Thanks!

The IRS Was Slow To Audit Trump’s Tax Returns. We Need To Know Why

“The two new reports on the IRS’s handling of former President Donald Trump’s tax returns raise more questions than answers. And the most important one is: Why has the agency been so slow to review Trump’s returns?” reports Howard Gleckman.

While there is no statutory requirement for these audits, the agency’s own rules have mandated a review of the president’s and vice president’s returns for nearly a half-century—since 1977. The IRS’s staff manual says explicitly, “[t]he returns require expeditious handling at all levels to ensure prompt completion of the examinations.”

But the Ways & Means description of IRS activities tells a very different, though complex, story. During Trump’s term in office, the agency designated only one return, for tax year 2016, for a mandatory presidential audit.

That doesn’t mean the agency was ignoring other Trump returns. Even before Trump’s election, the agency had been auditing his returns from 2009 to 2013. But while it had been reviewing portions of these returns to address specific concerns, it did not select any of the returns Trump filed during his presidency for review until April 3, 2019.Curiously, the day the agency selected Trump’s tax year 2015 return for audit was the same day Ways & Means Committee Chair Richard Neal (D-Mass.) formally asked Treasury Secretary Steven Mnuchin for some of Trump’s returns. Even that return, however, was not selected for a full presidential audit.

Watch: ‘The Dysfunction Within The IRS’—Here’s What Stood Out About Trump’s Tax Returns

Debate Over Trump’s Taxes Sparks As Many Questions About The IRS As The Former President

“The world’s most-famous tax returns are finding their way into the public record. The House Ways and Means Committee has already delivered a broad overview of Donald Trump’s tax filings during a six-year period, and his actual returns are slated for release in a few days. Predictably, people are talking a lot about Trump’s behavior as a taxpayer. How much did he earn? How much did he pay? Was he following the law? All reasonable questions, to be sure. Ultimately, however, the more important questions don’t focus on Trump as a taxpayer but on the IRS as a tax collector,” reports Joseph Thorndike.

When the Ways and Means Committee first requested Trump’s tax returns from the IRS, many scoffed at the panel’s stated objective: to investigate the mandatory audit program for presidential tax returns.

The skepticism was understandable; leading Democrats had already spoken gleefully of their plans to make Trump’s tax returns public. Investigating the audit program seemed like an afterthought—or a pretext.But in fact, the committee had good reason to suspect that audit program might be prone to failure: The agency has a history of coddling presidents. In June 1973, while reporters were already on the trail of Nixon’s tax misbehavior, the IRS was concluding its audit of the presidential return with a thank-you note. “I want to compliment you on the care shown in the preparation of the returns,” wrote the Baltimore district director in an obsequious letter to Nixon.

From 2020: Yes, Donald Trump Is Still A Billionaire. That Makes His $750 Tax Payment Even More Scandalous

“Is Donald Trump really a billionaire?’ everyone seemed to be asking Sunday night, after the New York Times dropped a bombshell report about the president’s taxes, which detailed big losses in some years and limited income in others. The answer: Yes, he is indeed,” reports Dan Alexander.

In fact, Trump is a multibillionaire, worth $2.5 billion, by our count. His portfolio, which includes commercial buildings, golf properties and branding businesses, is worth an estimated $3.66 billion before debt. The president has a fair amount of leverage—adding up to a roughly $1.13 billion—but not enough to drag his net worth below a billion dollars.

To understand how Donald Trump could be so rich—yet look so poor—it’s essential to comprehend the difference between what we’ll call (a) taxable income and (b) operating income. Taxable income is the amount people tell the Internal Revenue Service they earned, after subtracting a bunch of things like depreciation, interest, past losses and, in Trump’s case, questionable business expenses. Operating income captures the amount businesses make from their standard operations, ignoring a bunch of fancy accounting tricks and financial maneuvers.

Across Forbes

In Closing

“Time for the audit The gathering trial A collector’s dilemma Repositioned and filed”

— The Skids, “Into the Valley”