The Trump family’s tax affairs are being reviewed by New York state authorities following allegations of fraud in an exhaustive New York Times report, which Donald Trump decried as a “hit piece”.
The New York state department of taxation said it was examining the allegations and “vigorously pursuing all appropriate avenues of investigation”, according to reports.
Mr Trump took aim at the paper, a frequent target of his jabs, in a tweet on Wednesday morning: “The Failing New York Times did something I have never seen done before. They used the concept of ‘time value of money’ in doing a very old, boring and often told hit piece on me. Added up, this means that 97% of their stories on me are bad. Never recovered from bad election call!”
The NYT said its investigation was based on interviews with former Trump employees and more than 100,000 pages of documents, including more than 200 tax returns from the president’s late father, Fred Trump, “his companies and Trump partnerships and trusts”. Donald Trump has refused to release his tax returns.
The NYT report alleged that Mr Trump took part in “dubious tax schemes during the 1990s, including instances of outright fraud”, which were used to transfer wealth from Fred Trump to the future president and his siblings.
Among a litany of tax dodges, the newspaper alleges that the Trumps used sham companies to transfer assets and then understated the value of their holdings by hundreds of millions of dollars when reporting them to the government after Fred Trump’s death in 1999.
The report takes aim at Donald Trump’s business acumen — in particular, the oft-repeated claim that he relied on his own smarts and hard work to turn a $1m loan from his father into a $10bn fortune. Instead, it claims the president received the equivalent of $413m in today’s money from his father over the years.
In a statement to the NYT, Charles Harder, a lawyer for Mr Trump, called the report “100 per cent false, and highly defamatory”. Mr Harder noted that the filings had been handled by licensed accountants and lawyers and examined and approved more than a decade ago by the Internal Revenue Service and New York tax authorities.
“Should the Times state or imply that President Trump participated in fraud, tax evasion, or any other crime, it will be exposing itself to substantial liability and damages for defamation,” Mr Harder wrote.
“Fred Trump has been gone for nearly 20 years and it’s sad to witness this misleading attack against the Trump family,” the White House said in a statement. It added: “Many decades ago the IRS reviewed and signed off on these transactions.”
Mr Trump’s tax affairs have been a subject of speculation since, as a candidate, he broke with decades of practice and refused to release his tax returns to the public, saying he would do so once IRS audits were complete.
Even if the NYT’s claims are substantiated, it is unclear what legal jeopardy they would imply for the president, given the passage of time and the statute of limitations.
Still, they could provide grist for congressional investigations, particularly if Democrats regain control of the House of Representatives after November’s midterm elections.
In the run-up to that contest, Mr Trump is already facing a probe by special counsel Robert Mueller into Russian interference in the 2016 election, and an investigation into possible wrongdoing at his charitable organisation by the New York attorney-general.
In exploring the Trumps’ taxes, the NYT refocuses attention on the role of Fred Trump in building the family fortune. Unlike his glamorous son, the elder Trump thrived by building unfashionable housing blocks in New York’s outer boroughs, particularly in the postwar era. Many of Fred Trump’s developments benefited from government subsidies.
In one scheme detailed by the NYT, the Trumps allegedly created inflated invoices for building maintenance as a way to transfer money to a separate building company they had established to benefit Fred Trump’s children and another relative. Based on those invoices, the NYT said, they then raised tenants’ rent.
