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After a lengthy court battle that went all the way to the Supreme Court, the U.S. House Ways and Means Committee has announced it will finally release the tax returns of Donald Trump, the former U.S. president, on Friday.
What will be released?
The returns are expected to cover Trump’s federal income taxes from 2015 through 2020 and include both personal and business returns.
His returns are certain to be complex.
As the former president’s lawyers have explained, Trump operated his businesses almost exclusively through sole proprietorships and closely held partnerships. This makes his personal returns inordinately large and complicated.
What’s important?
The committee has already released rough details of Trump’s income and tax payments over the period 2015 to 2020.
Essentially, what is missing is the nuts and bolts that will add to the big picture.
In September 2020, the New York Times published some data from Trump’s tax returns spanning more than 20 years. The paper reported that Trump paid just $750 in taxes in 2016 and 2017. The paper said Trump paid no taxes for 10 of the 15 years analyzed.
The Times also published an exposé in 2018 about how Trump received millions of dollars from his father’s real-estate empire through tax deductions and maneuvers.
Also read: What could be learned from Trump’s tax returns?
What will the experts be focusing on?
Individuals who own so-called pass-through companies can deduct their businesses’ losses from their personal returns. The overview from the committee showed that Trump took advantage of this tax-code feature during the six years.
Steven Rosenthal, a senior fellow at the Tax Policy Center, told Congress that experts are wondering whether Trump’s reported businesses losses are fair.
So far there has been no evidence that Trump violated the law, Rosenthal testified. “But Trump stretched it beyond recognition to omit income,” he added.
In addition, Trump often portrayed himself as one of the richest American businessmen, but his tax payments are a small fraction of the average $8 million paid in 2017 by the top category of taxpayers.
The documents could also reveal information about the sources of Trump’s income and about his use of tax-planning strategies, said Andrew Schmidt, a professor of accounting and tax at North Carolina State University. Information on offshore companies and foreign bank accounts could be revealed.
Also: The fight for Trump’s tax returns is over, but it could rev up the fight over IRS funding
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