Trump Fights Back After Tax Revelations

Donald Trump and his supporters rushed Sunday to defend the Republican nominee following revelations that he may not have paid income taxes for 18 years, a new disclosure that shook the presidential race and capped an extraordinarily damaging week for Trump’s campaign.

News that Trump could have spent nearly two decades without paying income taxes — largely because he reported a loss of nearly $1 billion in the mid-1990s — threatens to puncture one of the core arguments of his campaign: that he is a successful businessman who could do for the country what he has done for his businesses.

And while his supporters have been extremely loyal to Trump, the idea that he hasn’t contributed to the federal coffers for so long could damage the notion that he fights for the little guy.

Trump’s campaign launched a vigorous defense of his business practices, saying he wasn’t breaking any laws but instead was helping get his business back on track.

“He’s a genius — absolute genius,” former New York City mayor Rudy Giuliani said on ABC’s “This Week,” saying the word over and over again. “This was a perfectly legal application of the tax code, and he would’ve been a fool not to take advantage of it.”

Democrats quickly pounced, saying that Trump’s business record — and his lack of paying taxes — should be deeply troubling to voters.

“You’ve got the middle-class people working longer hours for low wages — they pay their taxes, they support their schools, they support their infrastructure, they support the military,” Senator Bernie Sanders said on CNN’s “State of the Union.” “Trump goes around and says: ‘Hey, I’m worth billions! I’m a successful businessman! And I don’t pay any taxes. But you — you make 15 bucks an hour — you pay the taxes, not me.’ ”

News of Trump’s tax history came late Saturday night, when The New York Times reported that Trump declared a loss of $916 million on his income tax forms in 1995. That loss could have been used to avoid paying taxes for up to 18 years, according to the report, which was based on several pages of Trump’s taxes that were anonymously sent to a Times reporter and later confirmed as authentic by Trump’s former accountant.

Trump would have been taking advantage of tax laws that allow him to apply such losses for the prior three years, as well as the next 15 years.

It reflected a period when he was struggling mightily with his Atlantic City casinos, as well as his Trump Shuttle airlines. Writing off the losses from those businesses helped him avoid the taxes.

“From a tax standpoint, it was a very good deal,” Trump told the Globe in a May interview about the Trump Shuttle failure.

But two subsequent bankruptcies — which Trump-owned businesses filed in 2004 and 2009 — could have significantly lowered the benefits of the $916 million in losses that he declared in 1995, Boston-based tax attorney Morris Robinson said in an interview Sunday.

Trump would have had to balance the 1995 losses against the debt that was written off in his bankruptcies. Doing so — particularly with the magnitude that Trump was dealing with — could have triggered the audit that Trump says he is now under.

“It’s very possible that the audit that is happening in 2016 may be dealing with some of these issues that are going back 20 years,” Robinson said. “It’s a complicated, drawn-out process. There’s a lot involved, and when you have bankruptcies, some before the loss, some after the loss, it adds another layer of complication.”

Trump’s campaign released a statement late Saturday that did not dispute any of the facts in the Times story, complaining only that the documents were published without permission.

The Boston Globe