House Democrats release former President Trump's tax returns
A MARTÍNEZ, HOST:
The Democrat-led House Ways and Means Committee has released Donald Trump's tax returns. And it's unprecedented because the former president defied tradition when he refused to release his tax records while in office. And he continued to try and keep them secret after leaving office. In a summary earlier this month, the committee revealed that Trump paid 1.1 million in federal income taxes during his first three years in office. He paid none in 2020. On the line with us now is Philip London. He is a CPA with the public accounting firm Wiss. Philip, so why is it significant that we're seeing these returns now?
PHILIP LONDON: It's significant because it's showing us what the IRS has not done in reviewing the returns and to the extent of the losses and questionable deductions that Mr. Trump has claimed on his tax returns.
MARTÍNEZ: So that's interesting - what the IRS has not done. And that's something that - I think everyone has been wondering why they haven't done that.
LONDON: That's an excellent question, to which we don't have a definitive answer. It could be that political pressure was placed on them, which is not impossible. Although historically, the IRS has not been a political engine for people in power, it appears that now it has been. But the other thing has - goes back to what I once referred to as starving the beast. The IRS since 2000 has had very limited resources and has been unable to allocate those resources where necessary. And it is a result of tax cuts and not necessarily reducing spending. So that's a problem.
MARTÍNEZ: But considering who it is and the uniqueness of the situation, why wouldn't they devote a little more attention to this?
LONDON: Again, an excellent question. How they could only put one auditor doing risk assessment on what could be one of the most complicated returns that the IRS sees any year - it has 400 passthrough entities. It has significant expenses, appraisals and intercompany transactions that really require a team of auditors. So they're auditing it as if it's an individual when this is really a large business enterprise. And they're not looking at the underlying facts that go into the personal return.
MARTÍNEZ: And it's thousands of pages long.
LONDON: So for example, there were many...
MARTÍNEZ: Yeah, it's thousands of pages long.
LONDON: Excuse me?
MARTÍNEZ: It's thousands of pages long. So, I mean, to think that only one person is - was dealing with this. But I'm wondering, Philip, as a CPA, what would you be looking for in these actual returns?
LONDON: Well, I would be looking at the easement appraisals. He took charitable deductions on a property in West Chester called Seven Springs. And he made a charitable deduction of the use of the property and had that valued at $21.1 million. The IRS eventually looked at that. And they have two alternative approaches to adjusting it, one, to disallow it because the appraisal was substandard or two...
MARTÍNEZ: We have to leave it right there. I'm sorry, Philip. That's Philip London, CPA with the public accounting firm Wiss. Thank you very much. Transcript provided by NPR, Copyright NPR.