Paul L. Caron
Dean





Saturday, February 13, 2021

Out Of Office, Trump Faces Two Big Tax Issues

Washington Post, Now Out of Office, Trump May Have to Face Tax Questions:

Once his impeachment trial concludes and former president Donald Trump returns to his business, he will face some obvious challenges, such as declining real estate income and investigations from New York authorities.

But he may also have to finally face two tax issues that have been simmering in the background, either of which experts say could carry significant consequences should they materialize now that he is out of office.

One is a massive income tax refund Trump received before entering office, according to the New York Times, one that has quietly been under a years-long review by the Internal Revenue Service and a little-known congressional panel, the Joint Committee on Taxation.

The refund, which the IRS issued to Trump in 2010 for $72.9 million, according to the Times, could be a nonissue for Trump if the agency rules that it was issued appropriately and he should keep the funds.

But if the agency rules against him, he could be asked to pay it back with interest, handing him a debt of more than $100 million at a time when some of his biggest properties are suffering severe revenue losses and the law firm that handled his tax issues cut ties with him following the attack on the U.S. Capitol. ...

Steven M. Rosenthal, a tax expert who worked for the Joint Committee on Taxation in the 1990s, said he was not surprised that the IRS and the committee didn’t issue a decision while Trump was in office. He said it’s more likely they’ll move forward now. “The outcome of all this may be a huge liability for Donald Trump,” Rosenthal said. “This is real money.”

The other issue Trump faces is the possibility that Democrats, after five years of trying, will finally pry free Trump’s tax returns now that the party controls both Congress and the White House. Leading House Democrats are still pursuing a lawsuit seeking six years of Trump’s returns. On Feb. 3, a federal judge gave officials in the Biden administration until March 3 to decide whether it plans to comply.

No decision has been scheduled for either issue, but experts say legal and administrative authorities are more likely to address Trump’s tax issues now that he is a private citizen, even as Biden administration officials debate how much to hold Trump accountable for past actions while also trying to move the country forward. ...

The IRS is still under the control of Commissioner Charles P. Rettig, whom Trump appointed to the agency in 2018 and whose term runs until November 2022. Rettig, a Beverly Hills attorney before joining the IRS, owns a 50 percent share in two units in Trump International Hotel Waikiki, prompting concerns from congressional Democrats about whether he would remain impartial in decisions affecting Trump’s finances, such as the refund.

https://taxprof.typepad.com/taxprof_blog/2021/02/now-out-of-office-trump-faces-two-big-tax-issues.html

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