New Evidence Donald Trump Didnāt Pay Taxes
If the presumptive GOP nominee keeps hiding his returns, Congress could force him to show his hand with a one-line amendment to the tax code.
DAVID CAY JOHNSTON
06.15.16 1:00 AM ET
New questions about the integrity of Donald Trumpās income tax returns, and new indications that he does not pay income taxes, arise from rulings in two tax appeals that Trump filed in the 1990s. Trump lost both cases.
Trumpās 1984 federal income tax return included a Schedule C, the form used by sole proprietors, the decision in the first case shows.
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Trump listed no income on that form, yet he deducted $626,264 as expenses. His New York City tax return also showed no income, but listed slightly less in expenses: $619,227.
No receipts, invoices, or other documentation were provided when Trump was under audit or during his appeal from what he argued was an unfair demand for more tax.
āThe record does not explain how Petitioner [Trump] had significant expenses without any concomitant income from his consulting business,ā wrote H. Gregory Tillman, the city administrative law judge who heard the case on April 29 and May 28 of 1992.
Jack Mitnick, the lawyer and accountant who prepared Trumpās tax returns for more than two decades, was Trumpās only witness. Mitnick testified that he was āthoroughly familiarā with the Trump tax returns and all aspects of the finances of Trump Tower, which were central to the appeal.
But when shown a photocopy of Trumpās 1984 tax return, Mitnick testified that āwe did notā prepare that return, referring to himself and his firm, and he said did not know who did. However, Mitnick did not dispute that it was his signature on the photocopy.
The original tax return was never found, the judge noted.
Among the issues raised by Mitnickās 1992 testimony is whether Trump or someone acting on his behalf substituted a return that he or someone else prepared and then transferred Mitnickās signature using a photocopier.
Mitnick, now 71 and semi-retired, told me in a telephone interview Tuesday that he had no recollection of that case or a second appeal in which he represented Trump, whose returns he prepared until about 1995.
The second case was before the New York State Division of Tax Appeals in 1994 and concerned taxes on profits from selling units in an East 61st Street apartment building which was 90 percent owned by Trump, with his brother Robert and aide Louise Sunshine splitting the remaining share.
Again the issue was 1984 deductions Trump took without providing any documentation to auditors or when Frank W. Barrie, a state administrative law judge, heard his appeal.
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It was in this appeal that the record shows Trump paid no income tax in 1984.
āMr. Mitnick has prepared Donald Trumpās income tax returns for the last 20 years and testified that Mr. Trump had no income tax due against with the credit ācould have been applied,āā Judge Barrie wrote in his 23-page opinion.
In the city case, Judge Tillman noted that Trump complained of double taxation, but found that claim baseless. Using bold face to emphasize his point, Judge Tillman wrote, āThe problem at issue is not one of double taxation, but of no taxation.ā
The Trump campaign did not respond to an emailed list of detailed questions about the two cases. A second email was also ignored.
These two decisions should prompt new calls for Trump to release his tax returns. He claims, falsely, that he cannot release his returns since 2012 because they are being audited. But a tax return is filed under penalty of perjury and releasing a return has no effect on an audit, as many tax authorities (including a former IRS commissioner) have noted.
But even accepting Trumpās specious claim, no reason exists for him to withhold his complete returns from 1980 through 2011 since by his account those audits are closed.
And to be clear, releasing just the summary of the tax return, the Form 1040, is not adequate. Trump, like all candidates as well as sitting presidents and vice presidents, should disclose his complete tax returns including every form, schedule, statement, and the worksheets so we see just how the tax liability was determined.
That Trump has no intention of ever releasing his tax returns became clear on May 13 when he snapped at an ABC anchor that his federal income tax rate āis none of your business.ā
The tradition of presidential candidates disclosing their tax returns has an august purpose: making sure that another criminal is not a heartbeat from the presidency or in the Oval Office.
The disclosure tradition dates to when Spiro Agnew resigned as vice president in 1973 and then plead guilty to a tax crime. President Richard Nixon was an unindicted conspirator in a felony for which his tax lawyer Edward L. Morgan went to prison for creating a fraudulent $576,000 tax deduction on his behalfāone of the specifications in the impeachment proceedings that never came to a vote because Nixon resigned in August 1974.
If the presumptive GOP nominee keeps hiding his returns, Congress could force him to show his hand with a one-line amendment to the tax code.
DAVID CAY JOHNSTON06.15.16 1:00 AM ET
New questions about the integrity of Donald Trumpās income tax returns, and new indications that he does not pay income taxes, arise from rulings in two tax appeals that Trump filed in the 1990s. Trump lost both cases.
Trumpās 1984 federal income tax return included a Schedule C, the form used by sole proprietors, the decision in the first case shows.
ADVERTISEMENT
inRead invented by Teads
Trump listed no income on that form, yet he deducted $626,264 as expenses. His New York City tax return also showed no income, but listed slightly less in expenses: $619,227.
No receipts, invoices, or other documentation were provided when Trump was under audit or during his appeal from what he argued was an unfair demand for more tax.
āThe record does not explain how Petitioner [Trump] had significant expenses without any concomitant income from his consulting business,ā wrote H. Gregory Tillman, the city administrative law judge who heard the case on April 29 and May 28 of 1992.
Jack Mitnick, the lawyer and accountant who prepared Trumpās tax returns for more than two decades, was Trumpās only witness. Mitnick testified that he was āthoroughly familiarā with the Trump tax returns and all aspects of the finances of Trump Tower, which were central to the appeal.
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But when shown a photocopy of Trumpās 1984 tax return, Mitnick testified that āwe did notā prepare that return, referring to himself and his firm, and he said did not know who did. However, Mitnick did not dispute that it was his signature on the photocopy.
The original tax return was never found, the judge noted.
Among the issues raised by Mitnickās 1992 testimony is whether Trump or someone acting on his behalf substituted a return that he or someone else prepared and then transferred Mitnickās signature using a photocopier.
Mitnick, now 71 and semi-retired, told me in a telephone interview Tuesday that he had no recollection of that case or a second appeal in which he represented Trump, whose returns he prepared until about 1995.
The second case was before the New York State Division of Tax Appeals in 1994 and concerned taxes on profits from selling units in an East 61st Street apartment building which was 90 percent owned by Trump, with his brother Robert and aide Louise Sunshine splitting the remaining share.
Again the issue was 1984 deductions Trump took without providing any documentation to auditors or when Frank W. Barrie, a state administrative law judge, heard his appeal.
GET THE BEAST IN YOUR INBOX!
By clicking āSubscribe,ā you agree to have read the Terms of Use and Privacy Policy
It was in this appeal that the record shows Trump paid no income tax in 1984.
āMr. Mitnick has prepared Donald Trumpās income tax returns for the last 20 years and testified that Mr. Trump had no income tax due against with the credit ācould have been applied,āā Judge Barrie wrote in his 23-page opinion.
In the city case, Judge Tillman noted that Trump complained of double taxation, but found that claim baseless. Using bold face to emphasize his point, Judge Tillman wrote, āThe problem at issue is not one of double taxation, but of no taxation.ā
The Trump campaign did not respond to an emailed list of detailed questions about the two cases. A second email was also ignored.
These two decisions should prompt new calls for Trump to release his tax returns. He claims, falsely, that he cannot release his returns since 2012 because they are being audited. But a tax return is filed under penalty of perjury and releasing a return has no effect on an audit, as many tax authorities (including a former IRS commissioner) have noted.
But even accepting Trumpās specious claim, no reason exists for him to withhold his complete returns from 1980 through 2011 since by his account those audits are closed.
And to be clear, releasing just the summary of the tax return, the Form 1040, is not adequate. Trump, like all candidates as well as sitting presidents and vice presidents, should disclose his complete tax returns including every form, schedule, statement, and the worksheets so we see just how the tax liability was determined.
That Trump has no intention of ever releasing his tax returns became clear on May 13 when he snapped at an ABC anchor that his federal income tax rate āis none of your business.ā
The tradition of presidential candidates disclosing their tax returns has an august purpose: making sure that another criminal is not a heartbeat from the presidency or in the Oval Office.
The disclosure tradition dates to when Spiro Agnew resigned as vice president in 1973 and then plead guilty to a tax crime. President Richard Nixon was an unindicted conspirator in a felony for which his tax lawyer Edward L. Morgan went to prison for creating a fraudulent $576,000 tax deduction on his behalfāone of the specifications in the impeachment proceedings that never came to a vote because Nixon resigned in August 1974.
