Trump's Tax Returns and Other Stuff

I wrote about the Trump Tax returns issue in February.  It's back in the news this week as he has announced he probably won't be releasing copies of his tax returns until after the November tradition.  That would break a tradition that goes back to the early 1970s that presidential candidates release copies of at least some recent tax returns.  At the time his campaign released a letter from his tax attorneys:

I know this is difficult to read but you can see a full-sized .PDF of the letter here.

The letter points out that all of Donald Trump's tax returns from 2009 forward are currently being audited.  Considering that less than 1% of all tax returns are audited by the IRS, on the surface this would seem highly unlikely.  But it isn't.  Money Magazine ran an article last year that pointed out that for tax year 2014 the returns where the taxpayer reported income of more than $10 million, that those returns made up 0.01% of the total number of returns filed.  But the chances of an IRS audit are highest for two groups. Those who have no adjusted gross income (AGI) and those whose adjusted gross income is above $10 million.  5.86% of returns with no AGI (or whose AGI is below zero due to something called a Net Operating Loss) and 16.22% of returns filed by those whose AGI is above $10 million level.

The question is, why would these current audits have anything to do with the now closed audits on Mr. Trump's tax returns for years prior to the oldest return being audited at the moment, the 2009 return?  The answer is they would not.  The prior audits are closed.  The claim that "...the pending examinations are continued examinations of prior closed examinations" is phrased to make it seem there is a connection between the current audits and those that were completed.  This is false.  The IRS has seen these returns and is through with them.  Nothing in them will alter the current, ongoing audits.

The Donald is also claiming that we won't learn anything new from the release of his tax returns.  Rather than take my word, as a professional tax preparer with over 20 years of experience, let's ask someone more qualified.  Kelly Phillips Erb is a tax attorney and write a column on tax issues for Forbes.  In February she wrote a piece on this very issue.  Here's an excerpt from that pieceL

"Despite Trump’s claims, you can learn a lot from a tax return and Trump understands this. It’s likely the reason he’s been so guarded with his returns and not only with respect to the presidential campaign. He previously refused to provide his returns in a libel case filed against Timothy O’Brien, a reporter for The New York Times. Trump unsuccessfully sued O’Brien for $5 billion after O’Brien claimed Trump’s wealth was $150 million to $250 million, not the billions that Trump claimed. The case went on for several years, O’Brien claimed, “because he wouldn’t comply with discovery requests” including the fact that “he wouldn’t turn over the tax returns, then the tax returns came in almost so completely redacted as to be useless."

 I've already written about the Donald's foundation being less charitable than one would expect from someone of his claimed wealth so no need to revisit that.  But I'm of the opinion that it is the amount of charitable contributions claimed on his tax returns prior to 2009.  He has nothing to lose by releasing those returns.  Unless of course there is something new we will learn from seeing them.