Trump May Owe $100 Million From Double-Dip Tax Breaks, Audit Shows
Last edited Sat May 11, 2024, 01:12 PM - Edit history (1)
Source: New York Times
May 11, 2024 Updated 11:08 a.m. ET
Former President Donald J. Trump used a dubious accounting maneuver to claim improper tax breaks from his troubled Chicago tower, according to an Internal Revenue Service inquiry uncovered by The New York Times and ProPublica. Losing a yearslong audit battle over the claim could mean a tax bill of more than $100 million.
The 92-story, glass-sheathed skyscraper along the Chicago River is the tallest and, at least for now, the last major construction project by Mr. Trump. Through a combination of cost overruns and the bad luck of opening in the teeth of the Great Recession, it was also a vast money loser. But when Mr. Trump sought to reap tax benefits from his losses, the I.R.S. has argued, he went too far and in effect wrote off the same losses twice.
The first write-off came on Mr. Trump’s tax return for 2008. With sales lagging far behind projections, he claimed that his investment in the condo-hotel tower met the tax code definition of “worthless,” because his debt on the project meant he would never see a profit. That move resulted in Mr. Trump reporting losses as high as $651 million for the year, The Times and ProPublica found.
There is no indication the I.R.S. challenged that initial claim, though that lack of scrutiny surprised tax experts consulted for this article. But in 2010, Mr. Trump and his tax advisers sought to extract further benefits from the Chicago project, executing a maneuver that would draw years of inquiry from the I.R.S. First, he shifted the company that owned the tower into a new partnership. Because he controlled both companies, it was like moving coins from one pocket to another. Then he used the shift as justification to declare $168 million in additional losses over the next decade.
Read more: https://www.nytimes.com/2024/05/11/us/trump-taxes-audit-chicago.html
No paywall (gift)
Link to ProPublica version (same as NYT) - https://www.propublica.org/article/trump-irs-audit-chicago-hotel-taxes
(
to erronis for ProPublica link)
= new reply since forum marked as read
Note the IRS staffing per capita during the past 20 years (through to 2021) that has taken a hit - https://www.taxpolicycenter.org/fiscal-fact/irs-workforce-over-time
Additional data/analysis - https://www.cbpp.org/research/federal-tax/the-need-to-rebuild-the-depleted-irs
Economy Feb 6, 2024 6:26 PM EDT
WASHINGTON (AP) — The IRS is poised to take in hundreds of billions of dollars more in overdue and unpaid taxes than previously anticipated, according to new analysis released Tuesday by the Treasury Department and the IRS.
Tax revenues are expected to rise by as much as $561 billion from 2024 to 2034, thanks to stepped-up enforcement made possible with money from the Democrats’ Inflation Reduction Act, which became law in August 2022.
The Congressional Budget Office in 2022 estimated that the tens of billions of new IRS funding provided by the IRA would increase revenues by $180.4 billion from 2022 to 2031. The IRS now says that if IRA funding is restored, renewed and diversified, estimated revenues could reach as much as $851 billion from 2024 to 2034.
Administration officials are using the report to promote President Joe Biden’s economic agenda as he campaigns for reelection — and as the IRS continually faces threats to its funding.
(snip)
https://www.pbs.org/newshour/economy/irs-expects-to-collect-hundreds-of-billions-more-in-unpaid-taxes-thanks-to-new-funding
IR-2024-130, May 2, 2024
(snip)
More audit focus on wealthiest taxpayers, large corporations, partnerships
The report also notes that the IRS anticipates increasing audits on the wealthiest taxpayers, large corporations and large, complex partnerships by sizable percentages for tax year 2026:
The plan highlights the IRS will nearly triple audit rates on large corporations with assets over $250 million to 22.6% in tax year 2026, up from 8.8% in tax year 2019. The IRS will increase audit rates by nearly ten-fold on large, complex partnerships with assets over $10 million, going from 0.1% in 2019 to 1% in tax year 2026. The IRS will increase audit rates by more than 50% on wealthy individual taxpayers with total positive income over $10 million, with audit rates going from an 11% coverage rate in 2019 to 16.5% in tax year 2026. At the same time, the IRS continues to emphasize the agency will not increase audit rates for small businesses and taxpayers making under $400,000, and those rates remain at historically low levels.
(snip)
https://www.irs.gov/newsroom/irs-releases-strategic-operating-plan-update-outlining-future-priorities-transformation-momentum-accelerating-following-long-list-of-successes-for-taxpayers
Underfunding meant squeezing blood from turnips.
The funding that you show is "day to day operations" (FTEs for program work) with little or nothing to modernize/update systems which was dealt with through $80 billion from the IRA (some of which was removed with the last debt ceiling nonsense).
Jory Heckman@jheckmanWFED
March 21, 2024 2:27 pm
Congress is looking to make good on its promise to cut to the Internal Revenue Service’s multi-year modernization funds — as part of a bipartisan deal made last year. Lawmakers, in the second and final round of government spending bills for the rest of fiscal 2024, plan to cut $20 billion in funds the IRS got in the Inflation Reduction Act to rebuild its workforce and modernize its legacy IT. The agency still has roughly $60 billion to meet its modernization goals.
The Biden administration agreed to these IRS cuts, as part of a deal with congressional Republicans last year to raise the debt ceiling and avoid an unprecedented default on the federal government’s debts. Rather than spread the cuts to IRS modernization funds, as lawmakers originally agreed to, the 2024 spending bill includes the full $20 billion reduction.
Despite approving this deal, the Biden administration is asking Congress to reverse the $20 billion cut to IRS funding, as part of its 2025 budget request. Congress plans to keep the IRS at current funding levels for the rest of the year with a $12.3 billion annual budget for its day-to-day operations. The Biden administration also proposed keeping the IRS annual budget flat in its 2025 spending proposal.
Sen. Chris Van Hollen (D-Md.) said in a press release Thursday that the spending deal gives the IRS the funding it needs to keep improving customer service, replace outdated computer systems and crack down on tax cheats. “This bipartisan legislation invests in these critical priorities for our nation and more,” Van Hollen said. The IRS has used its Inflation Reduction Act funding to grow its workforce to 90,000 employees for the first time in a decade. Reuters recently reported the agency plans on reaching a 100,000-employee workforce within the next three years.
(snip)
https://federalnewsnetwork.com/budget/2024/03/congress-proceeds-with-20b-cut-to-irs-modernization-fund-in-fy-2024-spending-deal/
(just checked) 
Somebody else could buy it, take his name off, and make it into a nice property.
They could afford to pay taxes on it too.
Just sayin'
