Takeaways from the House committee’s report on Trump taxes – CNN
New York
It will take time for lawmakers and the public to digest the trove of documents relating to former President Donald Trump’s tax returns released Tuesday night by the House Ways and Means Committee.
Trump repeatedly defied convention and refused to release his tax returns both as a presidential candidate and as a sitting president.
The committee, which is responsible for IRS oversight and writing tax policy, had long sought and finally obtained just a few weeks ago Trump’s tax returns for 2015 through 2020. Its stated aim was to review “how the IRS enforces the federal tax laws against, and ensures compliance by a president.”
Here are some of the top initial takeaways from the committee’s report, which includes both its analysis of the IRS presidential audit program and an analysis of Trump’s returns by the nonpartisan Joint Committee on Taxation.
Committee says IRS failed to properly audit Trump
The Ways and Means Committee asserts that the IRS presidential audit program was “dormant” during Trump’s term.
The report found that during Trump’s time in office the IRS opened only one “mandatory” audit – for his 2016 tax return. And that didn’t take place until the fall of 2019, after Chairman Neal first sent a letter asking the IRS for Trump’s returns and tax information.
It also notes that the agency had opened an audit earlier that year for his 2015 return but it was not designated as mandatory.
The 2017 tax return, meanwhile, was marked as “evaluated and picked up for examination, if necessary.”
It remains unclear why the IRS wasn’t more active in auditing Trump’s returns while president.
“Despite knowledge of an ongoing Congressional investigation and the Manual, no priority was given to the mandatory audit program by the prior Administration,” the report asserts.
Sen. Ron Wyden, who chairs the tax writing committee in the Senate, said Wednesday “the IRS was asleep at the wheel, and the presidential audit program is broken. There is no justification for the failure to conduct the required presidential audits until a congressional inquiry was made. I have additional questions about the extent to which resource issues or fear of political retaliation from the White House contributed to lapses here.”
Many Democrats, including those on the committee, as well as tax policy experts suggest that a lack of resources, including manpower to handle highly complex audits like those of Trump, may also be a factor.
“It’s easy to find the IRS deficient. They’re starved for resources. Rich guys can take advantage of the tax law because the IRS doesn’t have the resources to go after them,” said Steven M. Rosenthal, senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute.
CNN reached to the IRS for comment but has not heard back.
Trump paid no federal income taxes in his last year as president
After years of reporting large losses, according to the New York Times investigation, Trump reported a stunning reversal of fortune during the middle two years of his presidency that led to a considerable tax bill, according to the report from the Joint Committee on Taxation released Tuesday night.
The $1.1 million Trump paid in federal income taxes in 2018 and 2019 stand in stark contrast to the $750 he paid in 2017 and $0 in 2020.
Trump’s tax bill grew substantially as his income surged in 2018 and 2019. For example, Trump reported a $22 million capital gain in 2018 and a $9 million gain in 2019 from asset sales, sending his income into the black following years of enormous losses.
In 2015 and 2016, Trump reported he lost more than $32 million each year. In 2017, Trump said he lost nearly $13 million. But he reported taxable income of $24 million in 2018 and more than $4 million in 2019, giving him a sizeable tax bill.
Trump has leveraged massive losses he accumulated over the years to zero out his tax liabilities, as previously shown by a New York Times investigation. For example, the JCT noted that Trump carried forward $105 million in losses on his 2015 return, $73 million in 2016, $45 million in 2017 and $23 million in 2018.
“It’s the 2,000-pound gorilla. … He still uses the net operating losses” to reduce his tax liability,” Rosenthal said.
And once again, in 2020, as the pandemic raged on, Trump reported a loss of nearly $5 million. He paid $0 in federal income taxes that year.
What’s next: Committee plans to release Trump’s actual returns
The Ways and Means Committee said it intends to release the Trump tax returns at issue in its report.
The release could come in a matter of days. First, Neal said, sensitive personal information such as Social Security numbers and account numbers must be redacted.
Meanwhile, Neal has proposed legislation that would codify the mandatory audit program “to require the IRS to conduct mandatory audits while a President is in office and publicly disclose related returns and return information.”
House Speaker Nancy Pelosi said the House will “move swiftly to advance” that bill.
Swiftness will be required if the bill is to pass and become law. The Democrats hand over control in the House to the Republicans on January 3.
CNN’s Jeanne Sahadi contributed to this report.
Published at Wed, 21 Dec 2022 16:36:00 +0000
