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trump's taxes
May 23, 2019

One of House Speaker Nancy Pelosi's (D-Calif.) arguments against opening impeachment proceedings against President Trump is that House Democrats are actually winning their oversight battles with the White House. And in fact, a second federal judge green-lighted congressional subpoenas of Trump's financial records on Wednesday, and two of Trump's lenders — Wells Fargo and TD Bank — have reportedly already handed over some financial records.

On the other hand, Trump's lawyers plan to appeal the rulings on his Deutsche Bank, Capital One, and accounting records, and Treasury Secretary Steven Mnuchin has refused to hand over Trump's tax returns, despite a law that says he "shall," a subpoena, and a memo from IRS lawyers agreeing he has little choice. New York may have just given House Democrats a workaround on Trump's tax returns, though.

On Wednesday, the New York state Assembly and Senate gave final approval to a law that would allow three congressional committees — House Ways and Means, Senate Banking, and Joint Committee on Taxation — to request the state tax returns of any elected or top appointed official. It covers both business and personal tax returns filed in the state. New York is Trump's home and the headquarters of many of his core businesses, and the information on his state returns should be very similar to what's on his federal returns.

If Gov. Andrew Cuomo (D) signs the legislation — a spokesman said he is reviewing it carefully — it will take effect immediately. That would probably provide House Democrats their fastest path to viewing Trump's tax returns — though the law, like all the other avenues, might have to overcome a court challenge first. Peter Weber

May 21, 2019

A confidential draft Internal Revenue Service memo directly contradicts Treasury Secretary Steven Mnuchin's reason for not turning over to Congress President Trump's tax returns, The Washington Post reports.

House Ways and Means Chairman Richard Neal (D-Mass.) formally requested Trump's tax returns last month; under a 1924 law, he is one of a handful of top lawmakers with the authority to do so. Mnuchin has refused to give Neal the returns, claiming Congress does not have a "legitimate legislative purpose" to request the documents.

The memo, obtained by the Post, states otherwise, asserting that it is "mandatory" the returns are disclosed, as the law "does not allow the Secretary to exercise discretion in disclosing the information provided the statutory conditions are met." The only way the IRS can refuse to comply with a Congressional subpoena "would be the invocation of the doctrine of executive privilege," the memo states, which has not happened.

The IRS told the Post the draft was prepared in the fall by a lawyer in the Office of Chief Counsel, and does not represent the "official position" of the agency. Trump has not released his tax returns on his own, first claiming that he can't do so because he is under audit, and later saying no one could understand his complex filings anyway. Catherine Garcia

May 7, 2019

In 1985, two years before releasing his book The Art of the Deal, President Trump purchased several properties, including his Mar-a-Lago club in Florida, and reported losses of $46.1 million from his casinos, hotels, and retail space in apartment buildings, The New York Times reports.

The Times obtained tax information from 1985 to 1994 that shows Trump's businesses lost more than $1 billion over the decade. Trump spent the 1980s boasting about his business talents; the figures show that in 1985, he borrowed hundreds of millions of dollars in order to purchase a $351.8 million casino, $60 million hospital, and $85 million undeveloped railroad yards. He also borrowed $10 million to buy Mar-a-Lago.

The Times reports that it took Trump 10 years to make any money off Mar-a-Lago; it cost $18.7 million a year to carry the rail yards; and it took five years to turn the hospital property into a building with apartments that could be sold. In 1985, Trump also owned a United States Football League team, the New Jersey Generals, but the league soon folded. He did have one win that year: He purchased the Hotel St. Moritz in Manhattan for $73.7 million, and sold it in 1989 for $180 million.

Because most of his businesses were not created as partnerships, Trump was on the hook for federal income taxes. In addition to losing $46.1 million in 1985, his tax information shows he also carried over $5.6 million from earlier losses, the Times reports; in fact, IRS data on one-third of high-income tax returns shows that for 1985, only three other taxpayers had greater losses that year. Under the tax code, business owners can use their losses to keep from paying taxes on future income. This is known as a net operating loss, and by 1991, the Times says, Trump's net operating losses had grown to almost $418 million, or 1 percent of all the losses reported to the IRS by individual taxpayers that year.

For more on Trump's heavy losses in other years — including 1989, when he purchased an airline that never made any money, and 1990, when he opened his debt-laden Taj Mahal Hotel and Casino in Atlantic City — visit The New York Times. Catherine Garcia

May 7, 2019

Tax information obtained by The New York Times shows that from 1985 to 1994, President Trump's businesses lost more than $1 billion — so much that he did not have to pay income taxes for eight of the 10 years.

The Times received printouts of Trump's Internal Revenue Service tax transcripts, with figures from his 1040 forms, from someone who has legal access to them. Every year, the IRS releases information compiled from a sampling of high-income earners, and the Times discovered upon comparison that "year after year," Trump "appears to have lost more money than nearly any other individual American taxpayer."

In 1990 and 1991, Trump reported losses of more than $250 million each year, indicating that his core business losses "were more than double those of the nearest taxpayers in the IRS information for those years," the Times reports. Trump, who has long boasted about his business acumen, has not released his tax returns like every other president has over the last 40 years.

The House Ways and Means Committee has asked for the last six years of Trump's business and personal tax returns, but Treasury Secretary Steven Mnuchin on Monday announced the documents will not be turned over, despite the committee chair's legal authority. A lawyer for Trump, Charles J. Harder, told the Times that IRS transcripts "particularly before the days of electronic filing, are notoriously inaccurate" and "would not be able to provide a reasonable picture of any taxpayer's return." Read more at The New York Times. Catherine Garcia

May 7, 2019

On Monday, Treasury Secretary Steven Mnuchin informed House Ways and Means Committee Chair Richard Neal (D-Mass.) that he will not willingly hand over President Trump's tax returns, as requested under a 1924 law that clearly states he "shall" turn them over. House Minority Leader Chuck Schumer (D-N.Y.) got out his highlighter:

To put it bluntly, Mnuchin appears to be breaking the law. He doesn't frame it that way, of course. In a one-page letter to Neal, he said that after consulting with Trump's Justice Department, "I have determined that the committee's request lacks a legitimate legislative purpose" and "the Supreme Court has held that the Constitution requires that congressional information demands must reasonably serve a legitimate legislative purpose."

The 1924 law does not require any legislative or policy rationale for obtaining tax returns, but some legal experts agree that a string of court opinions demanding legislative reasons could pose a significant hurdle for Democrats if they sue Mnuchin, Politico reports. Neal gave one policy reason, and he could presumably give more.

This dispute may very well be decided by the Supreme Court, eventually. For more context, read Paul Blumenthal's short, engaging history of how and why Congress gave itself the power to see anyone's tax returns in 1924. Peter Weber

April 10, 2019

Treasury Secretary Steven Mnuchin sent a letter Wednesday to the House Ways and Means Committee, announcing that his department won't meet the deadline for turning over six years of President Trump's tax returns.

Last week, Chairman Richard Neal (D-Mass.) sent a formal request to the Internal Revenue Service for the returns, setting a deadline of April 10; he is one of three congressional leaders with the authority to request the tax returns of individuals. In his letter, Neal cited a 1924 law stating the IRS "shall furnish" records at the request of an authorized lawmaker.

Mnuchin wrote that he is discussing the request with the Justice Department, and feels it "raises serious issues concerning the constitutional scope of congressional investigative authority, the legitimacy of the asserted legislative purpose, and the constitutional rights of American citizens."

Previous presidents voluntarily released their tax returns, and Trump has given several reasons as to why he hasn't followed in their footsteps, saying that he can't do so because he is under audit, and also claiming they are so complex, no one would be able to understand them. There is no law keeping him from releasing tax returns while under audit. Catherine Garcia

April 7, 2019

President Trump's tax returns will "never" be turned over to Democrats, acting White House Chief of Staff Mick Mulvaney said on Fox News Sunday, calling their request "a political stunt."

"That is not going to happen and they know it," Mulvaney said, adding that Democrats have no business seeing the returns. Last week, House Ways and Means Chair Richard Neal (D-Mass.) formally requested six years of Trump's tax returns, both personal and business, from the IRS. He is one of three congressional officials with the authority to request the returns, and said he did so in order to review the agency's policy of auditing sitting presidents. He gave the IRS until April 10 to send over the returns.

Under a 1924 statute, when an authorized person makes a request for returns, the Treasury Department "shall furnish" them, and if it's done without the taxpayer's consent, the returns must be reviewed by members of Congress in "closed executive session," The Associated Press reports. Unlike previous presidents, Trump has not voluntarily released his tax returns, claiming he is both under audit and they are too complicated for the average person to understand. IRS officials have said a person who is being audited is not prohibited from releasing their tax returns. Catherine Garcia

April 5, 2019

President Trump personally lobbied Senate Majority Leader Mitch McConnell (R-Ky.) to prioritize the confirmation of his nominated Internal Revenue Service chief counsel on Feb. 5, about the time House Democrats started talking seriously about telling the IRS to turn over Trump's tax returns, The New York Times reports. On Feb. 27, the Senate confirmed the nominee, California tax lawyer Michael Desmond, and now Desmond will be advising the IRS on how to respond to House Ways and Means Chairman Richard Neal's (D-Mass.) request for six years of Trump's personal and business tax returns.

As a private tax lawyer, Desmond had briefly advised the Trump Organization on what a spokesman called a "discrete" IRS reporting matter before Trump took office, Bloomberg reported last July, and he worked alongside two current tax counsels to the Trump Organization, Sheri Dillon and William Nelson.

Trump's IRS commissioner, Charles Rettig, meanwhile, owns 50 percent shares of two one-bedroom residential rental units in the Waikiki Trump International Hotel and Tower in Hawaii, each worth $1.1 million, The Wall Street Journal reported last June, before Rettig's confirmation hearing. And as ProPublica and WNYC noted in October, Rettig — then a California tax attorney — argued in Forbes in February 2016 that Trump shouldn't release his tax returns, four days after Trump unveiled his dubious "I'm under audit" excuse for keeping his returns secret.

Trump has indicated he will fight the release of his returns to Neal's committee, but the 1924 law Neal cited "does not appear to give the White House any input into whether the IRS furnishes an individual's tax returns" and "does not appear to give the treasury secretary any legal mechanism to deny the request," The Washington Post reports. "In fact, the law was written in part to give Congress the ability to scrutinize the tax returns of executive branch officials to investigate conflicts of interest or other potential improprieties because of the Teapot Dome scandal in the early 1920s." Peter Weber

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