The six years of Donald Trump’s federal tax returns, which were made public on Friday, reveal that he paid very little in federal income taxes during his first and last years in office while simultaneously reporting significant losses that reduced his overall tax burden.
The House Ways and Means Committee disclosed the returns to the public on Friday, capping a legal struggle over their release that reached the Supreme Court. The returns had been long cloaked in secrecy. They support a Joint Committee on Taxation finding that Trump carried forward sizable losses from before and throughout his presidency to substantially lower or eliminate his tax liability. For instance, according to his tax forms, he took over losses of $105 million in 2015 and $73 million in 2016.
The Democratic-led committee only recently received the returns, which cover 2015 through 2020, following a protracted court struggle. The committee decided last week to release the tax returns, but this was postponed so that Social Security numbers and other private data could be redacted.
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The thousands of pages worth of tax forms are currently being examined by CNN.
The disclosure of the tax returns comes after a long search for records that previous US presidents had routinely made available willingly. Trump and his legal team fought tirelessly to keep his tax returns a secret, claiming that Congress had never used its legal authority to request a president’s tax returns, which Trump claimed may have significant ramifications.
“The Democrats should have never done it, the Supreme Court should have never approved it, and it’s going to lead to horrible things for so many people,” Trump said in a statement following the release.
“The ‘Trump’ tax returns once again show how proudly successful I have been and how I have been able to use depreciation and various other tax deductions as an incentive for creating thousands of jobs and magnificent structures and enterprises.”
The committee’s top conservative Republican, Texas Rep. Kevin Brady, said a release would amount to “a dangerous new political weapon that reaches far beyond the former president and overturns decades of privacy protections for average Americans that have existed since the Watergate reform.” Other Republicans also criticized Democrats’ efforts to obtain the tax returns as political.
The committee required the returns in charge of regulating the IRS and formulating tax laws by section 6103 of the US tax code. Their investigation primarily focused on whether Trump’s tax returns from his administration were examined correctly by the IRS’s presidential audit program.
During his administration, the committee discovered that the IRS only initiated one “mandatory” audit for Trump’s 2016 tax return. And that didn’t happen until the fall of 2019, following a request for Trump’s tax returns and documents from the IRS by Chairman Richard Neal, a Massachusetts Democrat. The presidential audit program is described in the report as “dormant.”
In a mainly symbolic vote last week, the House approved a plan to update the presidential audit procedure before the GOP gains control of the new Congress. Before the next Congress is sworn in, the Senate is not anticipated to take up the bill.
The impartial Joint Committee on Taxation’s review of the data from each of the six Trump tax returns was included in the report. The JCT found that the then-president paid no federal income tax in 2020 and only $750 in federal income tax in 2017. Trump paid a total of $1.1 million in federal income taxes in 2018 and 2019, a significant increase from the $750 he spent in 2017 and the $0 he paid in 2020, according to the report.
A New York Times investigation revealed that Trump declared sizable net operating losses for several years before launching his presidential campaign, which he was permitted to carry forward and apply to subsequent tax years, considerably reducing or eliminating his annual income tax due.
For instance, according to the JCT analysis, Trump carried forward losses totaling $105 million on his 2015 tax return, $73 million in 2016, $45,00,000 in 2017, and $23,00,000 in 2018.
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The JCT analysis also casts doubt on the integrity of several sizable charitable deductions that Trump listed on many of his tax filings. The amount of income tax due can be decreased by deductions.
Although the recently made public tax returns won’t reveal Trump’s net worth or the full extent of his financial dealings, they can provide a window into the profits and losses of his businesses, whether or not he has foreign bank accounts, and whether or not he has paid taxes to other countries.
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