Donald Trump could owe as much as $100 million in taxes after allegedly “double deducting” deductions, according to an IRS audit.
The investigation, revealed by The New York Times and ProPublica, focuses on the former president’s stunning skyscraper in Chicago.
The 92-story structure opened during the budget and during the recession, resulting in huge losses that Trump sought to recoup.
However, the IRS and several tax experts believe he actually wrote off the same losses twice, resulting in huge tax benefits.
“I think he defrauded the tax system,” said Walter Schwidetzky, a law professor at the University of Baltimore and an expert on corporate taxes. Time.
Donald Trump could owe as much as $100 million in taxes after reportedly ‘double deducting’ deductions, according to an IRS audit
The IRS investigation, revealed by The New York Times and ProPublica, centers on the former president’s glittering skyscraper in Chicago (pictured)
The IRS and several tax experts believe that Trump may have written off the same losses on the tower twice, leading to huge tax benefits.
The first write-down came in 2008, when Trump claimed the $847 million condo-hotel met the tax threshold of “worthless” because mounting debts meant he would never make a profit.
Trump captured the former Chicago-Sun Tribune site in 2001 and made it the centerpiece of his TV show The Apprentice, offering the winner the “mind-boggling job” of managing the facility.
Initially planned to open in 2007 at a cost of $650 million, several setbacks pushed the deadline and budget further and further away.
The onset of the recession slowed already slow apartment sales even further and Trump began defaulting on his loans.
This allowed him to report losses of up to $651 million for the year, The Times and ProPublica found.
He would eventually take his lenders Deutsche Bank to court over the loans, claiming that the recession was an act of God that the bank and its contemporaries had helped orchestrate.
In his 2008 tax return, he filed business losses of $697 million, with experts suggesting most of this came from the tower as this information is not made public.
But just two years later, Trump’s accountants appear to have tried to extract even more tax benefits from the losses by transferring the company that owned the tower to a new partnership.
It is alleged that Trump attempted to write off losses on the tower in 2008 and again in 2010
But Eric Trump (right), executive vice president of the Trump Organization, said the matter has been resolved and that he is confident in the company’s position.
In 2008, Trump declared that his hotel-apartment tower in Chicago was “worthless” under the tax definition
This apparently allowed him to declare another $168 million in losses over the next decade, according to the Times.
If he had left the setup as it was in 2008, he would not have been able to claim the deficit as a loss again.
Continued losses reportedly allowed him to avoid tax liability on income from other sources, such as his entertainment career and the tower’s unpaid debt.
In 2010, his lenders forgave about $270 million of this debt, but Trump was able to use a post-recession Obama stimulus bill to spread it out over five years.
The 2010 merger maneuver is believed to have put the IRS on Trump’s trail and is referenced in a memo from the federal agency examining the legality of the strategy.
Trump was not named in the memo, but the Times identified him using details from New York attorney Letitia James’ 2022 lawsuit against Trump and several Trump Organization executives for alleged financial fraud.
The Technical Advice Memorandum, used to outline the IRS’s position where the law is unclear, states that the agency believes the merger violated the laws designed to prevent double-dipping on tax-reducing losses.
The audit was mentioned in a congressional report in December of that year, but details of its progress would not be publicly available unless Trump chooses to challenge the findings in open court.
The 92-story structure opened during the budget and during the recession, resulting in huge losses that Trump tried to recoup
The first claim came in 2008 and was for about $651 million, according to the New York Times. In the photo: Trump (R) stands with his wife Melania Trump (2L), their son Barron Trump (C) and father-in-law Viktor Knavs, at the beginning of a funeral for Amalija Knavs, the mother of the former first lady
Trump was identified as the subject of an investigation in a 2019 technical advisory memorandum
The “worthless” classification Trump uses covers a gray area of tax law, which says it is partially up to the owner.
However, several tax experts have a vague view of the Republican candidate’s tactics.
IRS veteran Monte Jackel stated that including the debt in the deduction was “simply not right.”
“This issue was settled years ago, but only came back to life when my father ran for office,” said Trump’s son Eric, executive vice president of the Trump Organization.
“We are confident in our position, which is supported by opinion letters from several tax experts, including the former General Counsel of the IRS.”
Interest in Trump’s tax returns was sparked in 2016 during his run for the White House, when he became the first candidate to defy tradition by refusing to publish due to an ongoing audit.
The revelation is the latest threat to the presidential hopeful’s finances and follows several expensive legal rulings, including a $454 bill from James’ civil fraud case and $83 million in damages for defaming sex assault accuser E. Jean Carroll.
He is also currently facing a criminal trial in Manhattan over alleged hush money payments he made to adult actress Stormy Daniels in the lead-up to the 2016 election.
A representative for the Trump Organization did not immediately respond to DailyMail.com’s request for comment.