Trump Tax Scandal

Trump Tax Scandal

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Updated Feb 22, 2019 at 07:39PM EST by 3kole5.

Added Oct 03, 2016 at 11:51AM EDT by Adam.

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Overview

The Trump Tax Scandal refers to the fallout from documents leaked to the New York Times[1] that indicate Republican presidential nominee Donald Trump could have avoided paying taxes since 1995.

History

Throughout the 2016 United States Presidential Election, Trump has bucked the tradition of presidential candidates releasing their tax returns, causing speculation that something detrimental to his campaign and reputation was hiding in them.[2] In the first Presidential Debate, Democratic nominee Hillary Clinton questioned why Donald Trump had not released his tax returns. Trump may have alluded to the fact he had not paid taxes and bragged, "That makes me smart."[14]

On October 1st, 2016, after receiving a leak of some of Trump's tax returns, The New York Times published an article that revealed Trump had lost $916 million dollars in 1995, "from the financial wreckage he left behind in the early 1990s through mismanagement of three Atlantic City casinos, his ill-fated foray into the airline business and his ill-timed purchase of the Plaza Hotel in Manhattan." Because of American tax laws, the loss would have wiped out over $50 million dollars in taxable income over the next 18 years.

Developments

The news dominated talk shows on October 2nd, 2016. On CNN,[3] Rudy Giuliani called Trump a "genius" for avoiding his tax returns. Clinton released an ad attacking Trump about the scandal that day.[4]




Slate,[5] NPR,[6] CNN,[7] and more speculated the leak could hurt the Trump campaign. ThinkProgress[13] and other Twitter users found instances of Trump complaining about where his now non-existent tax dollars were going. In a tweet,[8] Trump suggested the news proved he knows America's tax laws better than anyone who has ever run for president and he was the only one who could fix them.


Donald J. Trump @realDonaldTrump Follow I know our complex tax laws better than anyone who has ever run for president and am the only one who can fix them. #fail.ng@nytimes

#LastTimeTrumpPaidTaxes

On Twitter, the hashtag #LastTimeTrumpPaidTaxes spread as users reveled in 90s Nostalgia and used it to mock how Trump had avoided paying taxes for maybe twenty years. Uproxx,[9] Huffington Post,[10] TIME,[11] and Daily Mail[12] covered the spread of the hashtag.


Travon Free @Travon Follow #LastTimeTrumpPaidTaxes these we're still good people. MIPhotosCo Shauna Φ @goldengateblond Follow #LastTimeTrumpPaidTaxes was around the same time he talked about how stacked his baby daughter Tiffany might grow up to be UNLV SPECIAL COLLE NARCI 0:13 TALES FROM THE TRUMP ARCHIV Dani Fernandez @msdanifernandez Follow #LastTimeTrumpPaidTaxes Stoop Kid hadn't left his stoop GIF peteneems

New York Times Update

On October 31st, 2016, The New York Times[15] reported that it had discovered how Trump employed a number of legally questionable methods to avoid paying taxes, mainly the "stock-for-debt" swaps, a tax avoidance practice that had been routinely employed by large corporations for the same purpose. According to the article, Trump's proposed maneuvers were "so legally dubious" that his own lawyers advised him that the Internal Revenue Service (IRS) would most likely declare it improper and call for an audit for at least six different reasons.

"Say a company can repay only $60 million of a $100 million bank loan. If the bank forgives the remaining $40 million, the company faces a large tax bill because it will have to report that canceled $40 million debt as taxable income.

Clever tax lawyers found a way around this inconvenience. The company would simply swap stock for the $40 million in debt it could not repay. This way, it would look as if the entire $100 million loan had been repaid, and presto: There would be no tax bill due for $40 million in canceled debt."

The loophole practice eventually became regulated in 1993, the year after Trump pulled off the maneuver to minimize his tax filings. The New York Times also reported that Trump's tax advisers employed a similar concept in 1992, in which "stock" is replaced with "partnership Equity."

In the wake of the New York Times report, John L. Buckley, who served as the chief of staff for Congress’s Joint Committee on Taxation in 1993 and 1994, described Trump's act as “He deducted somebody else’s losses,” meaning that only the bondholders who forgave Mr. Trump’s unpaid casino debts should have been allowed to use those losses to offset future income and reduce their taxes.

Rachel Maddow's Report

On March 14th, 2017, MSNBC journalist Rachel Maddow tweeted a curious message revealing that her news team has obtained exclusive copies of "Trump's tax returns" about an hour and a half before the airing of her daily news program The Rachel Maddow Show on MSNBC. Given the shrouds of mystery surrounding President Trump's tax returns, Maddow's tweet immediately went viral, racking up more than 84,000 retweets and 155,000 likes in less than 24 hours.


Rachel Maddow MSNBC @maddow BREAKING: We've got Trump tax returns. Tonight, 9pm ET. MSNBC. (Seriously) RETWEETSLIKES 83,258 150,968 7:36 PM - 14 Mar 2017

Shortly after Maddow's teaser tweet began circulating the social media, the White House preemptively released a statement confirming that Donald Trump paid $38 million USD in federal income tax on over $150 million in income for the fiscal year of 2005.


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Attach Form 4797 15a IRA distributjons b Taxable amount (see page 25) b Taxable amout (see page 25) 16 Enclose, but do181 not altach, any payment. Also,1 please use Pensions and annuitiss Rontal real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E 18 Farm income or (oss), Attach Schedule F 19 20a 21 Unsmployment compensation Soclal security benelits Other income. List type and amount (see pape 29) b Taxable amount (see page 27) 20 22 Addheamounis in the far right column for lines 7 throusn 21. Ihs is your total incom 23 Educator expenses (see page 29 24 o布caps. Attach Form 2105 012105-EZ 26 Health savings account deduction. Atach Form 89 26 Moving expenses. Altach Form 3903 27 One-half of selt-ernplayment tax. Attach Schedute se 2e self-employed SEP, SIMPLE, and qualiled plans 29 Sell-emptoyed health insuranoa daduplion (eea page 30) 30 Penalty on parly wilthdrawal of savings 31a Alimony paid b Recipient's SSN 32 IRA deduetion (eee page31) 33 Student loan interest deduction (ses page 33) Ceriain busunezso rcevs, perlorilnz risis, and foo-o overiment 2 ncome 26 34 Tun and fees deduction (see page 34) 35 Oomesic productlon activities deduction. Attach Form 8803 36 Add lines 23 through 31a and 32 through 35 37 Subtract ine 36 from line 22.This is vour adiveled sross income LHA For DIsclosure, Privaoy Act, and Paperwork Roduetion Act Nolice, ses page 78. om 1040 12005) FolT 40 (2005) Tax and S8 Amount from lne 37 (adjusted gross Incoms) 38 Credits 39a Check Dian da en l..] It f□You were born before January 2, 1941, t □Blind.) □Spouse was born before January 2, 1941, □Blind. 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Altach Form 8863 hou nw51 Retirement savings contributions credi Attach Form 88 50 7,300 Child tax credit (ses page 41). Attach Form 8901 required 53 Adoption credil. Attach Form 8839 52 64 Credits from: 55 Oher credits. Chock applicable box(es): Form 8859 Form 3800 ー] Form B801 cr-Form 58 Add lines 47 through S5. These are your total credits 57 Subtract ling 56 trom line 46, lt line 56 is more than line 46, enter-0 57 Other 3 Sel-employment tax. Artach Schedule SE Taxes 59 Socal security and Medicare tax on tip income not reported to employar. Attach Form 4137 60 Addtional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 it required 61 Advanca earned income credit payments from Form(s) W-2 82 Household employment laxos. Anach Schedule H 59 Add lines $7 through 62. 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Despite the high level of anticipation that built up in the hour leading up to the airing of the program, Maddow's findings from Trump's tax returns were largely met with lukewarm reception, as the documents seemed to suggest that Trump paid his taxes in compliance with the laws, and even criticisms from some progressives who interpreted the story as a distraction from the ongoing congressional debate on the healthcare bill.



Throughout the evening and the next morning, thousands of viewers who had tuned into The Rachel Maddow Show for the report continued to ridicule the anticlimactic nature of Maddow's findings on Trump's tax returns, including both supporters of President Trump and followers of Rachel Maddow, with hashtag #TrumpTaxReturns.


Diamond and Silk react to Rachel Maddow and the "Bombshell" release of Trump's 2005 tax returns. #hannity Trump: 25% tax rate Obama: 19.5% tax rate Sanders: 1 3.5% tax rate Thank you Rachel Maddow for this quality information! #MSNBC

One of the most critical tweets came from none other than Donald Trump Jr., who sarcastically thanked Rachel Maddow for publicizing Trump's financial success and income tax filings (shown below).


Donald Trump Jr. @DonaldJTrumpur Thank you Rachel Maddow for proving to your #Trump hating followers how successful @realDonaldTrump is & that he paid $40mm in taxes! #Taxes RETWEETS LIKES 16,291 39,589lll 10:08 PM-14 Mar 2017

New Jersey Law

On February 21st, 2019, the New Jersey State Senate passed a bill that would bar President Donald Trump from the 2020 presidential ballot in the state of New Jersey unless President Trump released his tax returns.[25] This would be the second attempt to pass the bill, after it was vetoed by Governor Chris Christie in 2017. This 2020 version of the bill would not go into effect until Governor Phil Murphy signed it into law.

State Senator Loretta Weinberg, one of the bill's co-sponsors, said, "It is so obvious with this president that had voters known some of what seem to be his business interests, he may not have been elected president."

More than 30 states have introduced similar legislation, but New Jersey is the first to pass it in the state senate. Those similar bills were met with criticism among supporters and detractors of Trump alike. Former California Governor Jerry Brown vetoed a similar bill in 2017. He said at the time, "Today we require tax returns, but what would be next? Five years of health records? A certified birth certificate? High school report cards? And will these requirements vary depending on which political party is in power?"

Trump critic and Twitter[26] user Ed Krassenstein lauded the news. He tweeted, "BOOM! The New Jersey Senate is voting on a bill that will prevent Trump from being on the 2020 Presidential ballot unless he releases his tax returns. Every damn state in America should be doing the same thing! We deserve to know! Who's with me?" The tweet received more than 14,000 retweets and 48,000 likes in 24 hours (shown below, left).

Twitter[27] user @JerryAvalos7 disagreed (shown below, right). They tweeted, "Totally illegal, denying the people of #NewJersey the right to vote for a candidate is over the top unConstitutional, If it hasn't occurred to the #Democrats, the government does have Trump's tax returns, he does it every year, its called the IRS. Jeez."


Ed Krassenstein @EdKrassen BOOM! The New Jersey Senate is voting on a bill that will prevent Trump from being on the 2020 Presidential ballot unless he releases his tax returns. Every damn state in America should be doing the same thing! We deserve to know! Who's with me 4:31 PM-21 Feb 2019 Totally illegal, denying the people of #NewJersey the right to vote for a candidate is over the top unConstitutional, If it hasn't occurred to the #Democrats, the government does have Trump's tax returns, he does it every year, its called the IRS. Jeez. B-1 ized De B is on back CHEDULES A&B Form 10 or paid by othe 1040 us Label U.S more than line 1, e ar New Jersey Senate Passes Bill That Would Keep Donald Trump off 2020 Ballo... On Thursday, the Democrat-controlled New Jersey State Senate voted to pass a bill that would keep presidential candidates off of the state's 2020 ballot unless they r... thegatewaypundit.co 1:25 PM-22 Feb 2019

Search Interest

External References

[1] The New York Times – Donald Trump Tax Records Show He Could Have Avoided Taxes for Nearly Two Decades, The Times Found

[2] Chicago Tribune – Commentary: Donald Trump's tax returns: 6 theories why he won't release them

[3] The Week – Rudy Giuliani says Trump's taxes prove 'he's a genius'

[4] Twitter – @HillaryClinton

[5] Slate – The Six Main Reasons Why the Times Tax Story Could Be Devastating For Trump

[6] NPR – Tax Returns, Threats Of Hacks: Surprise! It's October

[7] CNN – What Trump tax report could mean for his campaign

[8] Twitter – @RealDonaldTrump

[9] Uproxx – The Internet Had A Blast Pointing Out Things That Happened The ‘Last Time Trump Paid Taxes’

[10] Huffington Post – Twitter Users Get Nostalgic Over The #LastTimeTrumpPaidTaxes

[11] Time – The Internet Can’t Stop Talking About the #LastTimeTrumpPaidTaxes

[12] Daily Mail – Twitter users mock the 'last time Trump paid taxes' with '90s references – while unearthing The Donald's critical tweets about people not paying taxes

[13] Think Progress – 7 tweets by Trump about taxes that are very awkward now

[14] Uproxx – Donald Trump Admits He Feels ‘Smart’ About Not Paying Federal Income Taxes During The Debate

[15] New York Times – Donald Trump Used Legally Dubious Method to Avoid Paying Taxes

[16] Twitter – @RachelMaddow's Tweet

[17] New York Times – Trump Wrote Off $100 Million in Losses in 2005, Leaked Forms Show

[18] New York Times – Donald Trump’s Tax Documents From 2005

[19] Twitter – Hashtag Results for #TrumpTaxReturns

[20] CNBC – Here's one curious thing about the Donald Trump tax leak

[21] The Atlantic – What Trump's 2005 Tax Returns Reveal

[22] NBC News – Trump Paid $38 Million in 2005 Federal Income Tax, White House Says Before Report

[23] AOL – Reaction to MSNBC's report on President Trump's taxes

[24] CNN – Did Donald Trump leak his own tax return?

[25] Courier Post – Bill would keep Trump off 2020 NJ ballot unless he releases his tax returns

[26] Twitter – @EdKrassen's Tweet

[27] Twitter – @JerryAvalos7's Tweet

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