New York Times report says Donald Trump's tax avoidance stretched the law 'beyond any recognition'
Donald Trump used legally questionable maneuvers to avoid paying personal federal income taxes in the 1990s, The New York Times reported on Monday night.
The Times said Trump masked hundreds of millions of dollars in taxable income by using a maneuver so "legally dubious" that his lawyers told him the IRS "would most likely declare it improper if he were audited."
The report, published Monday night, follows the bombshell revelation in early October that showed Trump declared nearly $1 billion in losses in 1995 — a move that may have allowed him to avoid paying any personal federal income tax for nearly two decades.
Trump has not released any of his official tax returns, breaking from a multidecade tradition in presidential politics. The Republican nominee has cited an ongoing audit as a reason for withholding his returns.
While Trump and some of his businesses were in the throes of financial turmoil in the 1990s, Trump pressured investors to forgive millions of dollars in debt he could not repay at the time. But that forgiven debt would still have been viewed as taxable income, based on IRS provisions.
According to documents cited by The Times, however, Trump used a strategy that allowed the Manhattan billionaire to potentially escape "paying tens of millions of dollars in personal federal income taxes" on that forgiven debt.
Here's more from the newspaper:
"Mr. Trump's tax avoidance maneuver, conjured from ambiguous provisions of highly technical tax court rulings, clearly pushed the edge of the envelope of what tax laws permitted at the time. 'Whatever loophole existed was not "exploited" here, but stretched beyond any recognition,' said Steven M. Rosenthal, a senior fellow at the nonpartisan Tax Policy Center who helped draft tax legislation in the early 1990s."
During the second presidential debate, on October 9, Trump acknowledged that he went years without paying federal income taxes.
John Buckley, the former chief of staff to the congressional Joint Committee on Taxation, told The Times that Trump was "getting something for absolutely nothing."
Read the full story at The New York Times »
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