House panel releases Trump tax returns in another setback for former president

The House Ways and Means Committee on Friday released Donald Trump’s tax returns, dealing yet another setback to the former president and 2024 White House candidate as he faces multiple federal and state investigations.

The Democratic-led panel released the financial documents for six years, capping a protracted legal and political battle that could have been prevented had Trump followed presidential precedent and released his returns voluntarily.

Democrats have pushed for more than three years to make Trump’s tax returns public, and the documents were finally made available to the Ways and Means Committee late last month after the Supreme Court denied a last attempt by Trump to withhold the records.

The returns show that Trump paid little, if anything, in income taxes over six years including the four in which he served as president. They have also raised questions over the lengths he took to claim tax deductions on items that may not warrant it to evade paying taxes.

“A president is no ordinary taxpayer. They hold power and influence unlike any other American. And with great power comes even greater responsibility,’ Rep. Richard E. Neal (D-Mass.), chairman of the committee, had said in a statement last week.

The release marks another blow to Trump, who is struggling to mount a campaign for president as numerous investigations and controversies continue to swirl around him. His most recent actions, from dining with avowed white supremacists to suggesting terminating the Constitution, have left many in the Republican Party reconsidering whether he remains the most viable candidate to lead the GOP after midterm voters largely rejected candidates backed by the former president.

The release of Trump’s tax information is the most sweeping such action taken by Congress in a half-century. A similar action involving a president has not occurred since 1973, when the IRS turned over President Richard M. Nixon’s tax returns to a congressional committee.

The IRS handed over the Nixon tax returns on the day that Congress requested them, a fact noted by House Democrats who were seeking the Trump documents. Republicans denied any similarity, The Washington Post has reported, noting that Nixon requested the investigation into his returns, while Trump fought such a probe.

Trump — who broke with a decades-long tradition of presidential candidates and presidents by refusing to make his tax returns public — has for years falsely claimed that he could not release them while under “routine audit” by the IRS.

Last week, the Ways and Means Committee revealed that the IRS did not audit Trump’s returns during his first two years in office, despite a rule mandating such reviews, and never completed any audits while he served.

If the IRS completes its audit work and validates some of the concerns raised by the report, the likelihood that Trump could subsequently face serious legal trouble — something beyond adjustments or fines — appears to be low. The Manhattan District Attorney’s Office, which has been conducting a criminal investigation of Trump since the summer of 2018, has had access to Trump’s tax returns for more than a year and has not charged him.

Trump’s chief financial officer and his company were both convicted of tax crimes after investigators found that the CFO and another Trump Organization executive had received perks like luxury apartments and Mercedes Benzes while purposely concealing them from tax authorities.

The release comes as special counsel Jack Smith oversees the Justice Department’s criminal probe of Trump’s possible mishandling of classified documents at his Florida home and his role in trying to overturn the 2020 election. Last week, the House select committee investigating the Jan. 6, 2021, attack on the U.S. Capitol referred four criminal charges against Trump to the Justice Department: obstruction of an official proceeding of Congress, conspiracy to defraud the United States, inciting or assisting an insurrection, and conspiracy to make a false statement.

New York Attorney General Letitia James (D), who has said she had access to Trump’s federal income tax returns “for a series of years,” has filed a $250 million lawsuit against Trump, his eldest children and executives at the Trump Organization accusing them of manipulating property and other asset valuations to deceive lenders. Trump and his company have denied the allegations. A trial is set for October 2023.

Sentencing for the Trump Organization on the conviction earlier this month of tax crimes committed by two of its longtime executives is set for Jan. 13. A fine of $1.6 million is possible.

Trump also is facing a probe in Georgia where a Fulton County grand jury was investigating whether Trump and his allies interfered in the 2020 election in the state. District Attorney Fani Willis (D) has said she expects the grand jury to issue a report on its findings before the end of the year. Willis said she will then decide whether to bring criminal charges.

IRS agents began but failed to complete multiple audits of the Trumps during their time in the White House, according to a letter from acting IRS Commissioner Douglas W. O’Donnell and a detailed report from congressional tax experts, both of which the committee released. The records paint a picture of an agency struggling to meet the demands of auditing a sitting president whose finances involve nearly 500 business entities, many of them actively operating.

The agency began an audit of the Trumps’ 2015 taxes in January 2018, O’Donnell said in a letter this month to Neal, with a plan specifically to examine the Trumps’ charitable donations, capital gains, supplemental income and the couple’s having used losses from one tax year to reduce their taxes in a subsequent year (called a net operating loss carryforward).

As the audit began, an IRS agent began examining a $21.1 million deduction Trump claimed for a conservation easement at his Seven Springs estate in New York, according to a 40-page report from the staff of the Joint Committee on Taxation, which advises Congress on crafting and deciphering tax bills. The easement’s value was based on an appraisal, obtained by The Post in 2020, that appears to have relied upon unsupported assertions and misleading conclusions.

The IRS agent investigating the easement visited the property Jan. 24,. 2022, according to the report, and met with appraisers on Nov. 22. The agent kept notes mentioning two possible adjustments: disqualifying the entire deduction “based on the fact that the appraisal was not a qualified appraisal” or reducing the deduction to $8.95 million.

The issue remains unresolved, according to the report. Despite that work starting four years ago, O’Donnell, who began as acting commissioner on Nov. 12, wrote that the audit had not been completed.

For the 2016 tax years, the IRS also began an audit. That time, one of the issues raised by an IRS agent was a tax credit Trump claimed for rehabilitating a historic building, the Old Post Office in downtown Washington, into a luxury hotel. (It has since been turned into a Waldorf Astoria.) But the IRS did not appear to request the tax returns for that property so they were not considered in the report.

The audit of the 2016 tax year was “initially completed,” O’Donnell wrote but required information from the other audits to be finalized, which was “pending resolution.”

The IRS similarly began audits for tax years 2017, 2018 and 2019. In September 2020, after the New York Times began reporting on Trump’s taxes, IRS officials met to discuss myriad issues raised by the newspaper’s reporting, according to the report, among them Seven Springs, loans to family members, consulting payments to family members and expenditures for “fuel, meals, haircuts, makeup artists, etc.” that Trump wrote off as business expenses in his 2017 return. The discussions lead to conversations with a representative for Trump, who was not named in the report, about the parameters of the inquiry.

But for each of those years, O’Donnell repeated the same line in his letter to Neal: “The examination team has not yet concluded its work.” He said the Trumps’ 2020 returns “were not yet under examination.”

O’Donnell also told Neal the IRS is auditing two of Trump’s companies, DJT Holdings LLC and DJT Holdings Managing Member LLC. The dual companies reflect Trump’s personal ownership of his businesses; combined, they hold stakes in the vast majority of Trump’s real estate properties and businesses, according to disclosure forms Trump filed with the government as president.

The IRS has begun audits of both companies for every year from 2015 through 2019, O’Donnell wrote to Neal, but he said none of those audits is fully complete either. Other records released by the committee indicate the IRS has repeatedly sought extensions to the statute of limitations for those audits.

To ensure that the IRS can audit future president’s returns, the House passed legislation in a 220-201 vote last week that would make it mandatory for the IRS to expedite an audit on the president and their businesses and release them within 90 days of filing. The Senate did not consider the legislation before the end of the congressional term, killing the effort.

“The American people want to have trust that the most powerful individual in this country, who has vested in them all the powers of the executive branch, is making decisions based on the interest of American people and not their own self financial interest,” Rep. Jimmy Gomez (D-Calif.), who sits on the Ways and Means Committee, said in an interview.