Donald Trump's Very Yuge Tax Problem

[whichphilosophy]

As I understand his returns for 2009 onwards are under audit. He can of course and should release any earlier returns.

Having trouble counting higher than one, WP?
Don't look now...

It's a normal procedure not to release accounts for large and complex organisations if they are subject to an audit. For individuals and smaller companies or single organisations the system is easier then releasing accounts early which is discretionary is also simpler. I'm quite aware of the political angle on this.

The CNBC article repeats the earlier quote this time by a former IRS inspector as follows:

Republican Presidential candidate Donald Trump
John Moore | Getty Images
Republican Presidential candidate Donald Trump
Much has been said and written about Donald Trump's refusal to release his tax returns. Tax returns paint a revealing picture of who we are. That's why confidentiality is a central pillar of our tax system. If our government expects taxpayers to share this information with the IRS, we are entitled to ironclad guarantees of confidentiality and privacy — for this reason, our laws provide that wrongful IRS disclosure of our tax-return information is a felony.

But nothing prevents us as taxpayers from choosing to release our tax returns — and those who aspire for the highest public office have done so for decades. And they do so precisely because their returns provide a window (for better and worse) into who they are. Those who say Trump should release his tax returns claim we are entitled to view this portrait of the man who aspires to lead our country.

Trump has promised to release his returns when his audit ends, but claims he is under continuous audit by the IRS and that releasing his returns (including returns for years that are now closed) could have an adverse impact on current and future IRS examinations. As a former IRS commissioner and practicing tax lawyer, I understand it may be inconvenient for Trump to release his tax returns but we all know — and the IRS has confirmed — that nothing prevents any of us from releasing our tax returns any time we want. And by the way, for those who listen carefully, Trump's promise means he will never release his tax returns. Trump's advisors also have substantial control over when his current examination will conclude.

As a citizen and voter, I want to take a look because I will learn something important about this man who would be president. Inevitably, his refusal to release his returns raises a question: What is Trump hiding? The additional audit hassle is nothing compared to the extraordinary burdens he would carry as president. It's a small price of admission to the Oval Office. The sooner he releases his entire returns, the better.

"As a former IRS commissioner and practicing tax lawyer, I understand it may be inconvenient for Trump to release his tax returns but we all know -- and the IRS has confirmed -- that nothing prevents any of us from releasing our tax returns any time we want."

However while this is true since there is no law against an individual releasing his own accounts before the audit is completed the IRS itself cannot legally release any returns that are under its audit.

Are you suggesting the law is changed so tax returns must mandatorily be released by the IRS before the completion of an audit?

 

[blastula]

Surprise, as hard as it is to believe you all are wrong.

A loophole in the law establishing the pass through 'S' corporations that allowed property developers to write off all of the losses on a project even the developer didn't personally incur the loss. The developer was allowed to claim the losses of the banks and other lenders, the losses of the various subsuppliers and subcontractors and even the losses of any governments, all as if they were the losses of the developer.

The loophole was an error in the drafting of the law. It was clear from the previous drafts of the bill that Congress didn't intend for developers to have this possibility.

Trump's developments were highly leveraged using extremely high interest junk bonds and very little if any of Trump's money in the project. He literally made money off of the bankruptcy and the losses of others.

That makes him smart! He's a genius! Actually, it makes his accountants smart, or at least competent, not him, since it's doubtful the know-nothing illiterate knows much about the tax code himself.

 

[whichphilosophy]

As I understand his returns for 2009 onwards are under audit. He can of course and should release any earlier returns.

No one disputes that he claims his attorney's told him not to. (He also falsely claimed at one point that the IRS forbids it) I wouldn't even dispute that his attorney's probably did tell him not to. They are paid to be cautious and protective. They are not running to be President. He is. He has the ability and the authority to release his tax returns, and he should do so.

But he won't.

We all knew that from the beginning.

So all of your posts of the subject add nothing. Thanks anyway.

This would be true but those beyond 2009 are under audit. I don't think everyone knew this from the beginning. Of course he should release those which have been audited as he has entered politics which is high profile.

 

[whichphilosophy]

This lawyer had hundreds of clients that were considering releasing their returns?

Who releases tax returns besides politicians?

It is a practice for companies who are bidding for projects to release the last 3 year's audited accounts to provide proof of profitability and stability.

 

[SimpleDon]

Trump's claim of 900 million dollars was fully 2% of the total losses claimed in the entire country in 1995.

Since this explanation exceeds the 140 character limit of most people's attention span, I don't expect that many people will understand it or that it will hurt Trump. This would of course include Trump himself.

 

[SimpleDon]

This lawyer had hundreds of clients that were considering releasing their returns?

Who releases tax returns besides politicians?

It is a practice for companies who are bidding for projects to release the last 3 year's audited accounts to provide proof of profitability and stability.

Yes, we required three years of tax returns not only to determine profitability but we had an internal standard that we didn't want our work to exceed 20 to 40% of the subsupplier or subcontractor's annual dollar volume, depending on exactly what they are doing for us.

 

[Horatio Parker]

This lawyer had hundreds of clients that were considering releasing their returns?

Who releases tax returns besides politicians?

It is a practice for companies who are bidding for projects to release the last 3 year's audited accounts to provide proof of profitability and stability.

Thanks. For companies. We're talking about a personal return.

 

[Elixir]

It is a practice for companies who are bidding for projects to release the last 3 year's audited accounts to provide proof of profitability and stability.

Thanks. For companies. We're talking about a personal return.

As an "S" Corp, all of us (principals) have had to provide individual returns every year, to the gov for contracts and to the bank that underwrites us.

 

[Horatio Parker]

Thanks. For companies. We're talking about a personal return.

As an "S" Corp, all of us (principals) have had to provide individual returns every year, to the gov for contracts and to the bank that underwrites us.

So the govt could essentially prevent such a corp or individual from bidding by auditing them?

Isn't Trump renovating a DC post office into a hotel for the GSA? And if those returns have been released, as the lawyer put it, can't we see them?

 

[Shadowy Man]

Has it even been proven that his returns are under audit? The man's a pathological liar, so who knows what is true.

 

[fast]

As I understand his returns for 2009 onwards are under audit. He can of course and should release any earlier returns.

No one disputes that he claims his attorney's told him not to. (He also falsely claimed at one point that the IRS forbids it) I wouldn't even dispute that his attorney's probably did tell him not to. They are paid to be cautious and protective. They are not running to be President. He is. He has the ability and the authority to release his tax returns, and he should do so.

But he won't.

We all knew that from the beginning.

So all of your posts of the subject add nothing. Thanks anyway.

RavenSky,

You say that he has the ability to release his tax returns, and I agree with you. You also say that he has the authority to release his tax returns, and on that too, I agree with you. However, in addition to those things, you say he should release his tax returns. On that, I am unable to agree with you.

I won't go so far as saying that I disagree with you, just that I don't agree with you. So, while I can't defend the position that he should not release them, I can't find any support to guarantee any conclusions that he should release them.

Everyone,

On a personal note regarding my own beliefs, I think it would be insanely stupid of him to release them, but just for the sake of argument, let's assume that RavenSky is in fact correct. Why doesn't a member of government with the POWER to release them violate his right to privacy and release them under the moral argument that the ends justify the means, demonstrated by the purported fact that the cost of not doing so far exceeds the benefit of not doing so? If his presidency would yield horrid consequences the world over, surely a violation of privacy is justified, right?

 

[RavenSky]

RavenSky,

You say that he has the ability to release his tax returns, and I agree with you. You also say that he has the authority to release his tax returns, and on that too, I agree with you. However, in addition to those things, you say he should release his tax returns. On that, I am unable to agree with you.

I won't go so far as saying that I disagree with you, just that I don't agree with you. So, while I can't defend the position that he should not release them, I can't find any support to guarantee any conclusions that he should release them.

He knew what was expected of him if he ran. If he could not fulfill those expectations, he should not have run. Since he is, he needs to release his returns

Everyone,

On a personal note regarding my own beliefs, I think it would be insanely stupid of him to release them, but just for the sake of argument, let's assume that RavenSky is in fact correct. Why doesn't a member of government with the POWER to release them violate his right to privacy and release them under the moral argument that the ends justify the means, demonstrated by the purported fact that the cost of not doing so far exceeds the benefit of not doing so? If his presidency would yield horrid consequences the world over, surely a violation of privacy is justified, right?

There is a helluva difference between saying someone needs to do as is expected of them for the position they want to hold, and suggesting that government should force the release of the returns.

 

[SimpleDon]

No one disputes that he claims his attorney's told him not to. (He also falsely claimed at one point that the IRS forbids it) I wouldn't even dispute that his attorney's probably did tell him not to. They are paid to be cautious and protective. They are not running to be President. He is. He has the ability and the authority to release his tax returns, and he should do so.

But he won't.

We all knew that from the beginning.

So all of your posts of the subject add nothing. Thanks anyway.

RavenSky,

You say that he has the ability to release his tax returns, and I agree with you. You also say that he has the authority to release his tax returns, and on that too, I agree with you. However, in addition to those things, you say he should release his tax returns. On that, I am unable to agree with you.

I won't go so far as saying that I disagree with you, just that I don't agree with you. So, while I can't defend the position that he should not release them, I can't find any support to guarantee any conclusions that he should release them.

Everyone,

On a personal note regarding my own beliefs, I think it would be insanely stupid of him to release them, but just for the sake of argument, let's assume that RavenSky is in fact correct. Why doesn't a member of government with the POWER to release them violate his right to privacy and release them under the moral argument that the ends justify the means, demonstrated by the purported fact that the cost of not doing so far exceeds the benefit of not doing so? If his presidency would yield horrid consequences the world over, surely a violation of privacy is justified, right?

I don't care if Trump releases his taxes or not. It is up to each voter to decide if it is important to them and how much it weighs in the balance of whether they vote for him or not. I am so far down the rabbit hole that if he releases all of his taxes and they showed that he paid 38.5% of his income every year in federal taxes and that he donates 50% of his earnings every year to worthwhile charities it won't convince me to vote for the egotistical, deluded SOB.

 

[whichphilosophy]

No one disputes that he claims his attorney's told him not to. (He also falsely claimed at one point that the IRS forbids it) I wouldn't even dispute that his attorney's probably did tell him not to. They are paid to be cautious and protective. They are not running to be President. He is. He has the ability and the authority to release his tax returns, and he should do so.

But he won't.

We all knew that from the beginning.

So all of your posts of the subject add nothing. Thanks anyway.

RavenSky,

You say that he has the ability to release his tax returns, and I agree with you. You also say that he has the authority to release his tax returns, and on that too, I agree with you. However, in addition to those things, you say he should release his tax returns. On that, I am unable to agree with you.

I won't go so far as saying that I disagree with you, just that I don't agree with you. So, while I can't defend the position that he should not release them, I can't find any support to guarantee any conclusions that he should release them.

Everyone,

On a personal note regarding my own beliefs, I think it would be insanely stupid of him to release them, but just for the sake of argument, let's assume that RavenSky is in fact correct. Why doesn't a member of government with the POWER to release them violate his right to privacy and release them under the moral argument that the ends justify the means, demonstrated by the purported fact that the cost of not doing so far exceeds the benefit of not doing so? If his presidency would yield horrid consequences the world over, surely a violation of privacy is justified, right?

From my own experience, when qualifying a company for inclusion onto a supplier list for specialised manufacturing for the oil and gas industry, I would ask them to provide the last 3 year's audited accounts which in most but not all cases would be available. For parent companies, these were not forthcoming but I would get these from the its subsidiary which I would deal with.

If the accounts were released without permission, I'm not sure what the detailed legal consequences would be in terms of penalties or the insane amount that would be awarded for punitive damages if such a case was successful. However such disclosures without permission would be risky if nothing illegal was discovered.

The consequences of any presidency would be based on his/her performance in conjunction with support from Congress and the Senate. Of course if there were cases of fraud then the president would face impeachment.

 

[whichphilosophy]

It is a practice for companies who are bidding for projects to release the last 3 year's audited accounts to provide proof of profitability and stability.

Thanks. For companies. We're talking about a personal return.

When someone owns a lot of companies establishing what actually is a personal income can be difficult in the event there is a dispute with the IRS. If this is like the UK then this may be a common area of dispute (though in most cases minor). Such incomes are often shown as being smaller than they are (at least for owners of smaller companies who want to offset travel and entertainment costs for instance).

 

[whichphilosophy]

Has it even been proven that his returns are under audit? The man's a pathological liar, so who knows what is true.

According to his law firm (Morgan Lewis).

 

[fast]

From my own experience, when qualifying a company for inclusion onto a supplier list for specialised manufacturing for the oil and gas industry, I would ask them to provide the last 3 year's audited accounts which in most but not all cases would be available.

When you say that you would "ask them," that leaves open the very important question of whether what you're asking for is required. If so, then getting them is a reasonable expectation. If not, then an expectation of compliance is as baseless as a waitress expecting a mandatory tip in the absence of a legal obligation for a patron to pay.

 

[whichphilosophy]

From my own experience, when qualifying a company for inclusion onto a supplier list for specialised manufacturing for the oil and gas industry, I would ask them to provide the last 3 year's audited accounts which in most but not all cases would be available.

When you say that you would "ask them," that leaves open the very important question of whether what you're asking for is required. If so, then getting them is a reasonable expectation. If not, then an expectation of compliance is as baseless as a waitress expecting a mandatory tip in the absence of a legal obligation for a patron to pay.

In this case it is almost no tip no waitress. This is relating to a business requirement by the Client which I would represent. In theory I would refuse to deal with a company that cannot show audited accounts for the last 3 years. In some cases we could ask for the previous 3 years if the last year's are not yet audited.

However looking at such documents alone tells very little except the size of the trade which can be washed by the accountants. I have accepted new bidders without such accounts where the risk is whether the company is facing bankruptcy. However sometimes the Client stipulate a particular company to use regardless of what it can provide. This will relate to specialist companies where they are sometimes a sole supplier or the only one in that field amongst 1 or 2 others who can meet the technical requirements for the design. Notably this may be fore specialised steel mixtures which are highly corrosion and temperature resistant.

 

[fast]

In this case it is almost no tip no waitress. This is relating to a business requirement by the Client which I would represent. In theory I would refuse to deal with a company that cannot show audited accounts for the last 3 years.

That (the requirement) makes all the difference in the world. In the current case with Trump, there are those that expect for him to release his taxes, and I'm not denying there is no good reason for him to do so (even though in his doing so, it would, in my predictive opinion, be very unwise). What I am denying is the reasonableness of the expectation given the absence of requirement.

We aren't required to be gentlemanlike and hold a door open for the ladies, and rest assured, gentlemanly or not, I'm going to ... because that's apart of who I am. But, like tipping, it's neither legally nor morally required--just apart of a culture where it's become expected. The problem is not unlike the issue we are having with Trump's refusal to release his taxes. Just as we bad mouth those that stiff waitresses despite no actual requirement to tip, there are those that will bad mouth Trump with no actual requirement for him to release his taxes.

Again, I'm no more denying that it's reasonable for him to release his taxes anymore than I am denying that it's reasonable to tip a waitress. It's the expectations spawned that give rise to the issue. Without the presence of a requirement to do either, the expectation to do either is misplaced.

Certain kinds of people expect us to act in mandate fashion even when an act is voluntary, lending credence to my notion that expectations are ill-conceived. Consider voting. I don't believe for a moment that with rights come the responsibility to vote. What I believe is that if we choose to vote, we should do so responsibly, yet those who exercised their right not to vote 8 years ago were chastised while racially motivated voters that voted for obama were portrayed positively as citizens participating in the democratic process.

 

[whichphilosophy]

In this case it is almost no tip no waitress. This is relating to a business requirement by the Client which I would represent. In theory I would refuse to deal with a company that cannot show audited accounts for the last 3 years.

That (the requirement) makes all the difference in the world. In the current case with Trump, there are those that expect for him to release his taxes, and I'm not denying there is no good reason for him to do so (even though in his doing so, it would, in my predictive opinion, be very unwise). What I am denying is the reasonableness of the expectation given the absence of requirement.

We aren't required to be gentlemanlike and hold a door open for the ladies, and rest assured, gentlemanly or not, I'm going to ... because that's apart of who I am. But, like tipping, it's neither legally nor morally required--just apart of a culture where it's become expected. The problem is not unlike the issue we are having with Trump's refusal to release his taxes. Just as we bad mouth those that stiff waitresses despite no actual requirement to tip, there are those that will bad mouth Trump with no actual requirement for him to release his taxes.

Again, I'm no more denying that it's reasonable for him to release his taxes anymore than I am denying that it's reasonable to tip a waitress. It's the expectations spawned that give rise to the issue. Without the presence of a requirement to do either, the expectation to do either is misplaced.

Certain kinds of people expect us to act in mandate fashion even when an act is voluntary, lending credence to my notion that expectations are ill-conceived. Consider voting. I don't believe for a moment that with rights come the responsibility to vote. What I believe is that if we choose to vote, we should do so responsibly, yet those who exercised their right not to vote 8 years ago were chastised while racially motivated voters that voted for obama were portrayed positively as citizens participating in the democratic process.

Not directly included in laws are our own moral codes where in the US and West many things are optional. Trump should release his tax returns once they have been audited. I think it is up to any company whether they do this but most will not until the audit is complete. Since Trump claims has been under iRS audit for several years, it is up to him if he submits these while waiting. Being correct or doing the right thing doesn't always match in instances like this.