UPDATED: 11 AM EDT — I should note that despite Mr. Trump’s Sunday morning bluster (essentially saying he is going to sue The New York Times, as early as Monday) — Mr. Trump would stand almost no chance in court. His main chance for a recovery of damages would be to prove that the 1995 leaked pages are fabricated. Given that his own recently retired accountant authenticated the pages, that would be a tall order. In addition, the main way to prove a claim of libel or slander, here — would be to RELEASE his actual returns. Rock — meet hard place.
I do understand that, yes — in theory, Mr. Hinderaker — releasing someone’s actual 1040 without their consent is a federal crime. However, Mr. Trump is a decidedly public figure — he is running for President. The Times article is squarely the kind of political reporting our founders cherished — under our First Amendment. He will lose on that one too. I’ll go out on a limb and say no judge will send any reporter to jail over this disclosure. Ample US Supreme Court precedent backs this view. But it is not free from doubt.
End, updated portion.
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Based on the documents thus far leaked to The New York Times, which are really just a few pages of his 1995 returns, we may safely assume that at least part of why he will not release all his returns is this: he has been using “paper” net operating loss carry-forwards (not even a small portion of which would be actual cash flow losses) to completely shelter his income from federal taxes — from at least 1992 to 2013. At least. That is, while the nation was outraged in 2012 that Mr. Romney paid less than a 10 per cent rate on his millions of income in many years, Mr. Trump has likely paid zero federal income taxes since at least 1995.
And that particular probability would nicely explain why he stopped putting any of his own money into his “charitable” foundation, after 2007. He would cut off his own donations precisely because his accountants and lawyers likely told him that he would get no tax benefit from those donations. He has (as of 2007 and after) this yuuuuge N.O.L.C. that will expire worthless if he doesn’t “absorb” it fully (with other income from TV shows, and branding deals).
You see, it would stand to reason that his “on paper” $916 million 1995 net operating loss had not been fully used by 2007. A portion of any loss of that size may be taken for only 18 subsequent tax years, from 1995, forward (and under then applicable law — three years backwards, too — thus the aggregated 21 years, in my headline). By most estimates, he personally wasn’t making (net of all expenses) anything close to $50 million a year, from 1995 to 2013.
It is unlikely that he made enough other income in those 18 years to absorb the full $916 million paper loss. So, putting his own real cash money into any charitable donation — whether to veterans directly — or to his foundation, would have simply meant that more of his precious $916 million net operating loss carry-forward (a “N.O.L.C.”) would expire worthless in 2013.
So — and to be clear — this is simply my experienced conjecture, here: Mr. Trump did as he always does — he took care of No. 1 first. He stopped donating, but did not stop telling people (falsely, it would seem) about how charitable he still was/is. And he got caught by clever investigative journalists at the Washington Post, this past Spring.
So far as we can tell — all of his actions appear lawful; they are just… deeply unsavory.
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