No, not the X-rated one with Stormy Daniels for which he deducted $130,00 on his tax returns, Michael Cohen went to jail, and we learned much, much TMI about mushrooms.
This one is G-rated (as far as we know) --It’s the “quickie” tax refund he received in about 2010.
We’ve known about this one since September 2020, when the Times managed to get some of his tax returns. These revealed that in about 2010, Trump requested and received an immediate “quickie” tax refund of $72.9 million. You and I have to wait months after filing returns to get our usually meager refunds, if any. But Trump requested, and the IRS wrote him a check for that amount. (Did he write “For Deposit Only” on the back?)
That’s 2010, with the IRS under Obama’s control. (Not necessarily blaming the Obama IRS, but it sure is an interesting contrast with the Trump IRS failure to audit him until Dems got the House in 2019.) Why was Trump supposedly entitled to the quickie?
During his run on The Apprentice, Trump earned huge amounts and paid about $73 million in taxes from 2005-2007 — extraordinary not because of the amount, but because it was pretty much the first time Trump paid any taxes in 21 years, from 1984 to 2004. But in 2008 and 2009, Trump was back in the deep red, declaring to the IRS losses of $1.4 billion.
The Obama Stimulus was passed in 2009 and contained contained a provision relating to offsetting certain income with losses in prior years. Trump claimed this provision entitled him to write off against his 2008-2009 losses every penny of income tax he paid in 2005-2007, totaling $72.9 million. So the IRS wrote a check for that amount, leading him to say (according to Michael Cohen) he “could not believe how stupid the government was for giving someone like him that much money back.” for that amount. The IRS is still reviewing this and many believe the refund was completely bogus.
This apparently woke up the IRS, which initiated an audit, but, according to John Cassidy of the New Yorker:
Under tax law, refunds of more than two million dollars require approval from Congress’s Joint Committee on Taxation, which also got involved. In 2014, an agreement between Trump and the I.R.S. appeared to have been reached, “but the audit resumed and grew to include Mr. Trump’s returns for 2010 through 2013,” the Times report says. “In the spring of 2016, with Mr. Trump closing in on the Republican nomination, the case was sent back to the [congressional] committee. It has remained there, unresolved, with the statute of limitations repeatedly pushed forward.”
So Trump’s claim that he was “under audit” in 2016 had some truth to it, although the audit was languishing in a Congressional Committee, in a Congress controlled by Republicans. Unsurprisingly, it continued to languish there until at least 2019, when Dems got the House back, leading to today’s release of the returns.
Of course, even if it was true, or partly true Trump’s returns were under audit in 2016, he was completely free to release the returns to public. In one of the many gigantic media failures of 2016, the media failed to press this or even make reasoned speculation about his taxes or net worth that he could not rebut as long as the returns were kept secret. At the same time, of course, they were wildly speculating about every pixel in Hillary’s emails, including Risotto recipes.
On Chris Hayes tonight, the brilliant NY Times tax reporter, Susanne Craig, said she was disappointed today’s IRS documents apparently did not include information about the quickie refund and its basis in the years 2005-2010.
The potential “happy ending”* is if Trump loses the audit of the $72.9 million, he will have to pay that plus interest and penalties totaling over $100 million. But they will be in line to foreclose on his assets (if any) after NY State, E. Jean Carroll, and a cast of thousands.
Note — Though I am a lawyer, IANAA (I am not an accountant), so CPA’s et al, as Rachel likes to say (which annoys me btw), did I get this all correct? did I miss anything or get anything wrong?
*not another Stormy reference.