New documents found that GOP presidential nominee Donald Trump used a legally questionable tactic to avoid paying federal income taxes in the early 1990s, according to the New York Times.
{mosads}The Times reported on Monday that Trump used a method that Congress later banned to deal with a $916 million loss. The tax avoidance maneuver was “so legally dubious” that his own lawyers told him the IRS would likely declare it improper if he was audited, the paper added.
Under those 1990s rules, the loss could have been used to wipe out more than $50 million a year in taxable income for up to 18 years.
Trump possibly avoided paying tens of millions in federal income taxes, but the reality of what he paid when remains unknown because the real estate mogul has refused to release his tax returns, saying he won’t do so until the IRS completes an audit of him.
Earlier this month, the Times obtained parts of Trump’s 1995 tax returns that showed he reported the nearly billion-dollar loss and may have legally avoided paying any federal income tax for up to 18 years.
Monday’s report elaborates on the Times’ earlier tax report, and comes just a week before Election Day.
The Times had tax experts examine the documents, which they say stretched the tax laws of the time.
“Whatever loophole existed was not ‘exploited’ here, but stretched beyond any recognition,” said Steven M. Rosenthal, a senior fellow at the nonpartisan Tax Policy Center.
These experts said Trump was able to receive tax benefits for losing substantial amounts of money that was given to the real estate mogul from investors and banks to help his casinos in Atlantic City.
Trump was able to get his backers to forgive millions of dollars in debt he wasn’t able to repay. According to the IRS, he was supposed to report the canceled debt as taxable income, but due to the tactic he used, Trump sidestepped having to report any of it.
Trump spokeswoman Hope Hicks pushed back against the Monday report in a statement, saying, “there is no news here.”
“Your e-mail suggests either a fundamental misunderstanding or an intentional misreading of the law,” Hicks said.
“Your thesis is a criticism, not just of Mr. Trump, but of all taxpayers who take the time and spend the money to try to comply with the dizzyingly complex and ambiguous tax laws without paying more tax than they owe. Mr. Trump does not think that taxpayers should file returns that resolve all doubt in favor of the I.R.S. And any tax experts that you have consulted are engaged in pure speculation.”