Why would we trust Trump's tax returns?
November 9, 2018 1:22 PM Subscribe
If Trump did release his taxes, or if they got leaked: do we have any reason to think there's incriminating information on them, other than that he's not already releasing them? Why wouldn't his tax forms be bullcrap? Surely his accountants have ways to make him look squeaky clean, especially if they're not hindered by the truth?
There absolutely could be evidence of potential tax fraud, as could be sorted out from Fred Trumps tax returns (hundreds of millions of dollars!) Most white collar crime(well over 90 percent) is uninvestigated. The IRS is so incredibly underfunded at this point, they can barely process the tax returns, let alone do much enforcement.
posted by rockindata at 1:34 PM on November 9, 2018 [2 favorites]
posted by rockindata at 1:34 PM on November 9, 2018 [2 favorites]
There absolutely could be evidence of potential tax fraud, as could be sorted out from Fred Trumps tax returns (hundreds of millions of dollars!)
Yes, but only if you also investigate to determine the facts underlying the numbers; it won't be obvious if you just pick up the return and look at it. This is actually good, in a way; his accountants are surely smart enough to avoid putting "embezzled money" in Schedule A, but they need the numbers to be "good" (i.e., false) in order to dodge taxes. So it's easy neither to spot nor to cover up, but the evidence will still be there, if you do the investigation into the underlying facts.
posted by praemunire at 1:39 PM on November 9, 2018
Yes, but only if you also investigate to determine the facts underlying the numbers; it won't be obvious if you just pick up the return and look at it. This is actually good, in a way; his accountants are surely smart enough to avoid putting "embezzled money" in Schedule A, but they need the numbers to be "good" (i.e., false) in order to dodge taxes. So it's easy neither to spot nor to cover up, but the evidence will still be there, if you do the investigation into the underlying facts.
posted by praemunire at 1:39 PM on November 9, 2018
The itemized list of deductions would potentially have evidence of tax fraud, and crowdsourcing the research to millions of readers instead of the overworked team at the IRS could push toward prosecution.
While his accountants may flat-out make things up, they can't simultaneously make other people's records match: if he claims a charitable deduction, that org may need to provide proof that he handed over the money. If he claims a loss of a quarter-million dollars worth of art, the appraisal value needs to show that, and so on.
posted by ErisLordFreedom at 1:42 PM on November 9, 2018 [5 favorites]
While his accountants may flat-out make things up, they can't simultaneously make other people's records match: if he claims a charitable deduction, that org may need to provide proof that he handed over the money. If he claims a loss of a quarter-million dollars worth of art, the appraisal value needs to show that, and so on.
posted by ErisLordFreedom at 1:42 PM on November 9, 2018 [5 favorites]
The Organization is comprised of hundreds of purpose-built privately-held entities, some corporations but mostly LLCs. Unless an LLC chooses to be taxed as a corporation, it is a pass-through business and the tax liability appears on the individual returns of its owners.
Access to tax returns would provide insight into how all those entities interact, how much money gets piped from one to another, or how debt is being used to reduce tax liability. There are public hints: because the UK legally requires companies to publish accounts, we can see the accounts and structure of the two Scottish golf courses, but the trail goes cold when it reaches Delaware.
So it's the structure that matters as much as the numbers, and the work of the NYT in unpicking how Daddy Fred structured his businesses -- for instance, the bullshit builder's merchant that existed to mark up purchases and justify rent increases -- will serve as a decoder ring.
If he claims a loss of a quarter-million dollars worth of art, the appraisal value needs to show that, and so on.
Along similar lines, they might show discrepancies between the valuation of property as an asset versus its assessed value for tax purposes.
posted by holgate at 1:57 PM on November 9, 2018 [3 favorites]
Access to tax returns would provide insight into how all those entities interact, how much money gets piped from one to another, or how debt is being used to reduce tax liability. There are public hints: because the UK legally requires companies to publish accounts, we can see the accounts and structure of the two Scottish golf courses, but the trail goes cold when it reaches Delaware.
So it's the structure that matters as much as the numbers, and the work of the NYT in unpicking how Daddy Fred structured his businesses -- for instance, the bullshit builder's merchant that existed to mark up purchases and justify rent increases -- will serve as a decoder ring.
If he claims a loss of a quarter-million dollars worth of art, the appraisal value needs to show that, and so on.
Along similar lines, they might show discrepancies between the valuation of property as an asset versus its assessed value for tax purposes.
posted by holgate at 1:57 PM on November 9, 2018 [3 favorites]
The big surprise we're expecting in Trump's tax returns is he doesn't pay taxes. He's already said as much in public, but seeing it so starkly may look worse to the public.
The #1 person to read on Trump's finances is Adam Davidson now for the New Yorker.
posted by Nelson at 1:58 PM on November 9, 2018 [3 favorites]
The #1 person to read on Trump's finances is Adam Davidson now for the New Yorker.
posted by Nelson at 1:58 PM on November 9, 2018 [3 favorites]
Yeah, I think the big reveal that many folks suggest is that he just hasn't really ever paid all that much in taxes.
posted by bluedaisy at 3:35 PM on November 9, 2018
posted by bluedaisy at 3:35 PM on November 9, 2018
Also, he's claimed that he's a billionaire, and his taxes will probably reveal that he claims to be worth much less. So, if his traces are revealed, he might have to make a choice: admit to tax fraud or admit he's not that rich.
posted by studioaudience at 3:41 PM on November 9, 2018 [5 favorites]
posted by studioaudience at 3:41 PM on November 9, 2018 [5 favorites]
The other half of that "doesn't pay taxes" big reveal would be it turning out that basically most of his businesses are either actively losing money or making much, much less money than one would be led to believe.
The actual level of detail provided by anybody's actual returns is so low that you'd never be able to find real fraud. Releasing your taxes doesn't mean you release the account detail, so if you don't get audited, there's basically no chance it comes up. Actual tax fraud prosecution versus the number of people who do it is... not even on the radar. But he's led people to this idea that he's a business genius and fabulously wealthy, and the white middle class is not great at understanding that a lot of the "fabulously wealthy" people they see are actually modestly successful and in amounts of debt that would crush ordinary people. I can't guarantee it would make a difference if the sexual assault stuff didn't, but it might.
posted by Sequence at 3:43 PM on November 9, 2018 [1 favorite]
The actual level of detail provided by anybody's actual returns is so low that you'd never be able to find real fraud. Releasing your taxes doesn't mean you release the account detail, so if you don't get audited, there's basically no chance it comes up. Actual tax fraud prosecution versus the number of people who do it is... not even on the radar. But he's led people to this idea that he's a business genius and fabulously wealthy, and the white middle class is not great at understanding that a lot of the "fabulously wealthy" people they see are actually modestly successful and in amounts of debt that would crush ordinary people. I can't guarantee it would make a difference if the sexual assault stuff didn't, but it might.
posted by Sequence at 3:43 PM on November 9, 2018 [1 favorite]
It will almost certainly reveal that he's worth a lot less than he's said, and that he's paid no taxes. Trump's entire brand is based on the idea that he's incredibly wealthy and a genius businessman, so maybe he's worried no one will buy Trump steaks (or anything else) when that's shown not to be true?
The NYTimes analyzed just a year's worth of taxes before the election, and found that Trump had likely not paid taxes for ten years, taking advantage of a loophole in a very likely illegal fashion. So... that's like a billion dollars of unpaid taxes? That he owes? And nothing came from that? You would certainly think that the worst of it is already known.
And yet... He's SO obviously worried about it. I feel there must be something we're missing. I'll be watching this thread. :-) Whatever it is, it's gotta be big.
posted by xammerboy at 5:41 PM on November 9, 2018
The NYTimes analyzed just a year's worth of taxes before the election, and found that Trump had likely not paid taxes for ten years, taking advantage of a loophole in a very likely illegal fashion. So... that's like a billion dollars of unpaid taxes? That he owes? And nothing came from that? You would certainly think that the worst of it is already known.
And yet... He's SO obviously worried about it. I feel there must be something we're missing. I'll be watching this thread. :-) Whatever it is, it's gotta be big.
posted by xammerboy at 5:41 PM on November 9, 2018
Oh, and I sort of think he's owned by Russia. Not sure if tax returns would show that info though. Maybe someone else can comment on that.
posted by xammerboy at 5:46 PM on November 9, 2018 [1 favorite]
posted by xammerboy at 5:46 PM on November 9, 2018 [1 favorite]
If the tax returns are provided by Trump, there is no guarantee that these are the same returns with the same numbers that he gave to the IRS. There is nothing illegal in giving the press doctored tax returns since they aren't the copies submitted to the IRS. The IRS is prohibited from commenting on or disclosing tax returns without a subpoena. So the press copies could be a complete fiction and there is nothing the IRS could do about it.
It would be illegal for Trump to submit phony returns to a bank, for example, as a part of a business transaction. But lying to the press -- nothing illegal about that as we have seen every single day.
The only way to guarantee that the tax returns are legitimate is to subpoena them directly from the IRS.
posted by JackFlash at 7:32 PM on November 9, 2018 [2 favorites]
It would be illegal for Trump to submit phony returns to a bank, for example, as a part of a business transaction. But lying to the press -- nothing illegal about that as we have seen every single day.
The only way to guarantee that the tax returns are legitimate is to subpoena them directly from the IRS.
posted by JackFlash at 7:32 PM on November 9, 2018 [2 favorites]
The #1 person to read on Trump's finances is Adam Davidson now for the New Yorker.
And for further reference, David Cay Johnston and the late Wayne Barrett, who managed to piece together what they could from public filings and legal discovery, especially during the casino days.
the white middle class is not great at understanding that a lot of the "fabulously wealthy" people they see are actually modestly successful and in amounts of debt that would crush ordinary people
And that the ostentatiously wealthy often engage in the equivalent of check-kiting on a grand scale, constantly shifting money between corporate entities and jurisdictions.
There are some specific narratives where access to tax returns might fill in some details, especially the turn to large cash purchases [WaPo / sub req] in 2006, which is both unusual for large-scale property acquisitions and means no public mortgage records.
posted by holgate at 8:21 PM on November 9, 2018 [2 favorites]
And for further reference, David Cay Johnston and the late Wayne Barrett, who managed to piece together what they could from public filings and legal discovery, especially during the casino days.
the white middle class is not great at understanding that a lot of the "fabulously wealthy" people they see are actually modestly successful and in amounts of debt that would crush ordinary people
And that the ostentatiously wealthy often engage in the equivalent of check-kiting on a grand scale, constantly shifting money between corporate entities and jurisdictions.
There are some specific narratives where access to tax returns might fill in some details, especially the turn to large cash purchases [WaPo / sub req] in 2006, which is both unusual for large-scale property acquisitions and means no public mortgage records.
posted by holgate at 8:21 PM on November 9, 2018 [2 favorites]
> Also, he's claimed that he's a billionaire, and his taxes will probably reveal that he claims to be worth much less.
I don't agree. A tax return is a report on income and expenses, in all their forms, not on assets or net worth.
posted by megatherium at 6:52 AM on November 10, 2018 [2 favorites]
I don't agree. A tax return is a report on income and expenses, in all their forms, not on assets or net worth.
posted by megatherium at 6:52 AM on November 10, 2018 [2 favorites]
First, he's taken great pains to avoid releasing his returns. So it seems like there must be some reason, right? Otherwise why not do it.
Even if it only is a report on income and expenses, so not technically on assets or wealth, an income report gives an idea of wealth. For instance it should show his capital gains income. Truly rich people live almost entirely off of capital gains, that is, returns on investments. If he's worth 1 billion or 3 billion or whatever, like if that's his wealth and assets, he should be bringing in millions a year just in capital gains.
He'll likely also report his debt in order to avoid paying any taxes at all. So who owns this debt? The returns might give us hints. Perhaps its all owned by, say, Russian oligarchs? We might be a step closer to finding out.
posted by dis_integration at 11:10 AM on November 10, 2018
Even if it only is a report on income and expenses, so not technically on assets or wealth, an income report gives an idea of wealth. For instance it should show his capital gains income. Truly rich people live almost entirely off of capital gains, that is, returns on investments. If he's worth 1 billion or 3 billion or whatever, like if that's his wealth and assets, he should be bringing in millions a year just in capital gains.
He'll likely also report his debt in order to avoid paying any taxes at all. So who owns this debt? The returns might give us hints. Perhaps its all owned by, say, Russian oligarchs? We might be a step closer to finding out.
posted by dis_integration at 11:10 AM on November 10, 2018
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posted by praemunire at 1:28 PM on November 9, 2018 [10 favorites]