In a podcast interview with Mother Jones, tax guru Steven Rosenthal of the Urban-Brookings Tax Policy Center suggested that there is little in the recently released Donald Trump tax returns that he see as fraught with criminality, but that their release is now inviting scrutiny of a $700 million loss the former president reported in 2009.
Speaking with former Department of Justice official Harry Litman, Rosenthal suggested the only reason that the former president has been allowed to get away with sketchy deductions for decades is that he has overwhelmed the IRS which, curiously, has not pursued him vigorously.
On that point, he noted that one agent was tasked with looking into Trump’s taxes while he was in office.
“They only assigned one agent to one of Trump’s presidential returns—his first—in the third year of Trump’s presidency. And they only got to the other presidential returns after Trump left office. That one agent in effect outsourced the audit of a lot of income and deductions to Trump’s tax lawyers and accountants that prepared the return,” he told Litman before later adding, “I think the agent was so overwhelmed, they just said let’s trust Trump’s preparers to get these numbers right.”
After pointing out that Trump’s attorneys were advising him to make sure his taxes were “squeaky-clean” after he was elected, Rosenthal said going back and looking at that 2009 tax return could be where Trump has problems that would lead to fines and having to pay massive back taxes.
“If you go back to those big losses in the 1990s, the statute of limitations ran out. It looks as if the IRS just never adjusted any taxes for the positions Trump took,” he explained. “But the big $700 million loss claimed in 2009—Trump was under audit for that year at the time he entered office in 2017. And that audit remains open. Looking at the presidential years, the agent seemed to be slow in part because they hadn’t resolved the earlier cycle.”
He continued, “I think the peril to Trump is the very concerns that he expressed: Now that everyone knows there’s a $700 million adjustment potential out there and the whole world is looking at it, and people are writing articles, that could inform the audit.”
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