Trump tax files leaked, prompting questions of tax evasion

Mallory Steffey, Contributing Columnist

The New York Times published Republican presidential candidate Donald Trump’s 1995 tax files on Oct. 1, which were leaked to reporter Susanne Craig via her New York Times mailbox. After verifying the authenticity of the postage, which had a return address of the Trump Organization, Craig and her colleagues contacted Jack Mitnick, the semiretired accountant who had prepared and filed Trump and his then-wife Marla Maples’ taxes for that year. Mitnick and the IRS both verified the documents.

When Craig and her colleagues approached the Trump campaign for comment, they were threatened with legal action should they release the files. Tax files are confidential documents and the unauthorized publishing of them may violate federal law. Craig and the New York Times felt the risk to be worth it and published the files, along with analysis of their contents, in an article titled “Donald Trump Tax Records Show He Could Have Avoided Taxes for Nearly Two Decades, The Times Found.” A separate article, “The Time I Found Donald Trump’s Tax Records in My Mailbox,” was published by Craig a day later on Oct. 2 detailing how the documents came to be in her hands.

While Trump’s current financial standings are still unknown due to his refusal to release his 2015 tax returns, the 1995 files do contain some interesting new developments. Within these documents, Trump claimed $916 million dollars in losses that year. A loss of this size, under current tax law and tax law of the time, could have allowed Trump to abstain from federal income tax for 18 years. This practice of claiming losses on tax returns and then being exempt from tax on potential earning in the future is very common in business.

According to Politico, these claimed losses are termed “net operating losses” and are meant to offset the irregularities in business during the tax year. For example, the agriculture industry is one of particular interest regarding net operating losses. A farmer could make a very decent amount of money one year, but pull up in the red the next two. Net operating losses allow them to stabilize their income slightly.

However, no expert seems to be able to interpret what these documents say about Trump. Politifact points out that Trump has declared bankruptcy for his companies six separate times, four of which happened between 1991 and 1992. Trump has claimed in past debates that these were smart business moves, made in order to maximize his profits. He has not offered commentaries on the jobs that were removed as a result of these decisions.

On the one hand, Trump has used his business expertise as a pillar of his campaign and his almost billion dollar losses do not stand as a great example of that history. On the other hand, his use of these losses to avoid federal income tax for nearly two decades could prove him to be economically savvy, albeit morally suspect. This potential tax evasion has drawn the ire of lower- and middle-class voters who couldn’t take the same liberties with their taxes.

As for how this news affects Trump’s campaign, the data is still out. With many polls still collecting post-debate numbers, the impact of this information could be days or weeks away from tangible findings.

(Visited 253 times, 1 visits today)