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Monday, October 03, 2016 8:49:07 AM
Who gave Trump’s taxes to the New York Times? The mystery behind a bombshell story.
By Paul Farhi October 2 at 6:44 PM
How Trump could have avoided paying income taxes for 18 years
Play Video 1:57
A report in the New York Times says a $916 million loss in the '90s might have allowed Donald Trump
to legally avoid paying any income taxes for almost two decades. (Sarah Parnass/The Washington Post)
When New York Times reporter Susanne Craig checked her office mailbox a few days ago, a thin Manila envelope immediately caught her eye. She almost gasped when she opened it.
“I thought it was a hoax,” she said Sunday. “My reaction was, ‘No way this is real.’?”
The typed return address read “The Trump Organization.” Inside were three photocopied pages Craig realized could be dynamite: They appeared to be from Donald Trump’s 1995 tax returns.
Those were the decidedly low-tech beginnings of what may turn out to be one of the most consequential stories of the 2016 presidential campaign. Late Saturday, the Times revealed .. http://www.nytimes.com/2016/10/02/us/politics/donald-trump-taxes.html .. that Trump had declared a $916 million loss in 1995, wiping out any federal taxes that year and setting himself up to avoid 18 years of similar obligations.
The story .. https://www.washingtonpost.com/politics/2016/10/01/35bef778-8844-11e6-a3ef-f35afb41797f_story.html , which Trump’s campaign did not contest or confirm, filled in one bit of the mystery surrounding the real estate mogul’s taxes. Trump has repeatedly declined to release his most recent returns, prompting his rival for the presidency, Democrat Hillary Clinton, to suggest he was hiding information that could hurt his candidacy.
[As news of Trump’s taxes breaks, he goes off script at a rally in Pennsylvania
https://www.washingtonpost.com/news/post-politics/wp/2016/10/02/as-news-of-trumps-taxes-broke-he-goes-off-script-at-a-rally-in-pennsylvania/]
The Times’ story was a rare animal, a bombshell based on a source whose identity is unknown even to people at the news organization that broke the story. Although anonymous sources are commonly used by journalists to elicit sensitive information, reporters almost always know their identity, even if they don’t disclose their names to readers or viewers.
That doesn’t appear to be the case in the Times’ story, which carried the bylines of four reporters, including Craig and David Barstow, an investigative reporter who has won three Pulitzer Prizes.
While Craig declined to discuss her understanding of who sent the Trump documents, Times deputy executive editor Matt Purdy was definitive: “We do not know the identity of the source.”
In hindsight, however, that may have been among the least problematic elements behind the documents Craig received that Friday, Sept. 23. The major challenge was authenticating the three pages and placing them in the proper context to understand Trump’s tax strategy at the time, said Dean Baquet, the newspaper’s executive editor.
The documents “looked real,” he said. “But who knew?”
The Times described the documents as the first pages of three filings: a New York state resident income tax return, a New Jersey nonresident tax return and a Connecticut nonresident tax return.
Among the troubling aspects was a line on one of the forms bearing the nine-figure sum Trump claimed as his personal loss. The figure’s first two digits — 9 and 1 — were typed onto the form in a different font than the digits making up the rest of the number, noted reporter Megan Twohey.
This raised the possibility that the documents could be fakes, just as the unusual typescript in documents purported to be part of President George W. Bush’s military records was called into question after CBS News used them in a “60 Minutes II” story in 2004. (Those documents were never definitively shown to be bogus, but the suspicions they raised eventually led to the firings, resignations or early retirement of people involved in the CBS story, including anchor Dan Rather.)
In addition to corroborating publicly available information contained on the forms, such as Trump’s Social Security number, the Times hired several tax experts to review the documents. They suggested that the documents were in line with accounting permissible under the federal tax code in 1995.
What Donald Trump is doing on the campaign trail
The GOP presidential nominee is out on the trail ahead of the general election in November. View Photos
The key to authentication was a semi-retired accountant named Jack Mitnick, who had prepared and signed Trump’s 1995 return. Barstow tracked down Mitnick in South Florida and “over coffee and bagels,” as Craig put it, confirmed that Mitnick had prepared them.
Mitnick also explained the mysterious 9 and 1, telling Barstow the two digits had to be hand-typed onto the tax form because they kept being wiped off the line when transmitted from an electronic tax-preparation program.
Based on Mitnick’s comments and other background material gathered by Barstow, Craig, Twohey and reporter Russ Beuttner, Baquet decided the story was ready for publication.
But just before that, according to the Times, a lawyer for Trump, Marc E. Kasowitz, emailed a letter to the paper threatening “prompt initiation of appropriate legal action” if the newspaper published the private documents.
Trump’s campaign did not dispute the documents’ authenticity or question the Times’ conclusions. It instead issued a statement that indirectly confirmed the story, reading, in part, “Mr. Trump is a highly-skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required. Mr. Trump knows the tax code far better than anyone who has ever run for president and he is the only one that knows how to fix it.”
Baquet, interviewed Sunday morning, expressed no regrets. “There’s no more public figure than the president and no more public endeavor than running for president,” he said. “Given what he has said about taxes and what he won’t show about his own, it’s important for voters to have this information.”
As for Craig, she’s still guessing why the source chose to send her the envelope.
Some of it might be her experience covering Wall Street for a decade or so for the Wall Street Journal and the Times. Part of it might be her coverage of Trump’s business career for the Times over the past nine months, including an investigation this summer of Trump’s holdings .. http://www.nytimes.com/2016/08/21/us/politics/donald-trump-debt.html .. that revealed his businesses are carrying more than twice as much debt as Trump has publicly disclosed.
In any case, Craig said she’d welcome more Manila envelopes from her source.
“I sit right by the mailboxes, and I’m constantly checking mine,” she said. “You never know what’s going to be in there.”
https://www.washingtonpost.com/lifestyle/style/2016/10/02/e7c1e0ce-88e0-11e6-b24f-a7f89eb68887_story.html?tid=sm_fb
---
Is the Times Revelation Just the Tip of the Iceberg?
Josh Marshall October 2, 2016, 1:45 PM EDT
I mentioned .. https://twitter.com/joshtpm/status/782622399497900032 .. this on Twitter a short time ago. Now I'm seeing others who know much more about this saying similar things. Here's my thought. After thinking over the Times revelation, I wonder whether there's a much, much bigger story here that the Times didn't put together or more likely did see but couldn't prove.
In any case, here's what I'm thinking.
We've known for years that the collapse of Trump's debt ridden casino empire in Atlantic City almost destroyed him more than two decades ago. He was able to wriggle through by a number of angles and connivances. But one of the biggest was that he was able to convince his lenders that they'd be even worse off if he was cleaned out and removed from the picture entirely. Convincing them that he was in essence too big or too important to fail, they took major 'haircuts' (losses) that allowed him to survive. He got others to absorb the impact of the losses, repackaged other parts and put them through bankruptcy, etc.
The key question is how much of the Atlantic City losses did Trump absorb in real terms? How much of those losses were forgiven or written off formally? And perhaps most importantly, how much of those losses were squirreled away or 'parked' in places which effectively put them in a sort of limbo or suspended animation - neither truly absorbed nor forgiven?
Here's where the Times revelation comes into play.
If you sustain real capital losses, you can apply those losses to cancel out future income/profits and reduce your tax liability. But if your losses are canceled out by debt forgiveness, the debt forgiveness is counted as income. That cancels out the losses that would provide you with the tax benefit. In other words, you can't have your cake and eat it too.
But there are many ways to be crafty and end up with both - some of those may simply be aggressive and sleazy and others may be clearly illegal. Bigly. The most obvious way would be to create some new business entity which you technically continued to owe vast sums of money to but which never actually tried to collect - in other words, you 'park' your debt somewhere it will never be heard from again. Any place on the spectrum would go a long, long way to explaining both Trump's abject refusal to release his tax returns and almost perennial audits.
The question is: did Trump really lose almost $1 billion of his own capital in a single year? He definitely took a bath in Atlantic City. So maybe he did. But that number at least strains credulity, especially given how he was subsequently able to recover.
This may be just the first hint of something quite a bit bigger than a momentary political embarrassment.
http://talkingpointsmemo.com/edblog/just-a-hunch--2
See also:
Harry Reid mocks Trump tax leaks: ‘Racist incompetent failure managed to lose a billion dollars’
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=125531517
The big issue is the hit his shareholders in the casino's took while he was
moving the losses from his LLCs and S corps onto to his personal tax return.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=125528574
By Paul Farhi October 2 at 6:44 PM
How Trump could have avoided paying income taxes for 18 years
Play Video 1:57
A report in the New York Times says a $916 million loss in the '90s might have allowed Donald Trump
to legally avoid paying any income taxes for almost two decades. (Sarah Parnass/The Washington Post)
When New York Times reporter Susanne Craig checked her office mailbox a few days ago, a thin Manila envelope immediately caught her eye. She almost gasped when she opened it.
“I thought it was a hoax,” she said Sunday. “My reaction was, ‘No way this is real.’?”
The typed return address read “The Trump Organization.” Inside were three photocopied pages Craig realized could be dynamite: They appeared to be from Donald Trump’s 1995 tax returns.
Those were the decidedly low-tech beginnings of what may turn out to be one of the most consequential stories of the 2016 presidential campaign. Late Saturday, the Times revealed .. http://www.nytimes.com/2016/10/02/us/politics/donald-trump-taxes.html .. that Trump had declared a $916 million loss in 1995, wiping out any federal taxes that year and setting himself up to avoid 18 years of similar obligations.
The story .. https://www.washingtonpost.com/politics/2016/10/01/35bef778-8844-11e6-a3ef-f35afb41797f_story.html , which Trump’s campaign did not contest or confirm, filled in one bit of the mystery surrounding the real estate mogul’s taxes. Trump has repeatedly declined to release his most recent returns, prompting his rival for the presidency, Democrat Hillary Clinton, to suggest he was hiding information that could hurt his candidacy.
[As news of Trump’s taxes breaks, he goes off script at a rally in Pennsylvania
https://www.washingtonpost.com/news/post-politics/wp/2016/10/02/as-news-of-trumps-taxes-broke-he-goes-off-script-at-a-rally-in-pennsylvania/]
The Times’ story was a rare animal, a bombshell based on a source whose identity is unknown even to people at the news organization that broke the story. Although anonymous sources are commonly used by journalists to elicit sensitive information, reporters almost always know their identity, even if they don’t disclose their names to readers or viewers.
That doesn’t appear to be the case in the Times’ story, which carried the bylines of four reporters, including Craig and David Barstow, an investigative reporter who has won three Pulitzer Prizes.
While Craig declined to discuss her understanding of who sent the Trump documents, Times deputy executive editor Matt Purdy was definitive: “We do not know the identity of the source.”
In hindsight, however, that may have been among the least problematic elements behind the documents Craig received that Friday, Sept. 23. The major challenge was authenticating the three pages and placing them in the proper context to understand Trump’s tax strategy at the time, said Dean Baquet, the newspaper’s executive editor.
The documents “looked real,” he said. “But who knew?”
The Times described the documents as the first pages of three filings: a New York state resident income tax return, a New Jersey nonresident tax return and a Connecticut nonresident tax return.
Among the troubling aspects was a line on one of the forms bearing the nine-figure sum Trump claimed as his personal loss. The figure’s first two digits — 9 and 1 — were typed onto the form in a different font than the digits making up the rest of the number, noted reporter Megan Twohey.
This raised the possibility that the documents could be fakes, just as the unusual typescript in documents purported to be part of President George W. Bush’s military records was called into question after CBS News used them in a “60 Minutes II” story in 2004. (Those documents were never definitively shown to be bogus, but the suspicions they raised eventually led to the firings, resignations or early retirement of people involved in the CBS story, including anchor Dan Rather.)
In addition to corroborating publicly available information contained on the forms, such as Trump’s Social Security number, the Times hired several tax experts to review the documents. They suggested that the documents were in line with accounting permissible under the federal tax code in 1995.
What Donald Trump is doing on the campaign trail
The GOP presidential nominee is out on the trail ahead of the general election in November. View Photos
The key to authentication was a semi-retired accountant named Jack Mitnick, who had prepared and signed Trump’s 1995 return. Barstow tracked down Mitnick in South Florida and “over coffee and bagels,” as Craig put it, confirmed that Mitnick had prepared them.
Mitnick also explained the mysterious 9 and 1, telling Barstow the two digits had to be hand-typed onto the tax form because they kept being wiped off the line when transmitted from an electronic tax-preparation program.
Based on Mitnick’s comments and other background material gathered by Barstow, Craig, Twohey and reporter Russ Beuttner, Baquet decided the story was ready for publication.
But just before that, according to the Times, a lawyer for Trump, Marc E. Kasowitz, emailed a letter to the paper threatening “prompt initiation of appropriate legal action” if the newspaper published the private documents.
Trump’s campaign did not dispute the documents’ authenticity or question the Times’ conclusions. It instead issued a statement that indirectly confirmed the story, reading, in part, “Mr. Trump is a highly-skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required. Mr. Trump knows the tax code far better than anyone who has ever run for president and he is the only one that knows how to fix it.”
Baquet, interviewed Sunday morning, expressed no regrets. “There’s no more public figure than the president and no more public endeavor than running for president,” he said. “Given what he has said about taxes and what he won’t show about his own, it’s important for voters to have this information.”
As for Craig, she’s still guessing why the source chose to send her the envelope.
Some of it might be her experience covering Wall Street for a decade or so for the Wall Street Journal and the Times. Part of it might be her coverage of Trump’s business career for the Times over the past nine months, including an investigation this summer of Trump’s holdings .. http://www.nytimes.com/2016/08/21/us/politics/donald-trump-debt.html .. that revealed his businesses are carrying more than twice as much debt as Trump has publicly disclosed.
In any case, Craig said she’d welcome more Manila envelopes from her source.
“I sit right by the mailboxes, and I’m constantly checking mine,” she said. “You never know what’s going to be in there.”
https://www.washingtonpost.com/lifestyle/style/2016/10/02/e7c1e0ce-88e0-11e6-b24f-a7f89eb68887_story.html?tid=sm_fb
---
Is the Times Revelation Just the Tip of the Iceberg?
Josh Marshall October 2, 2016, 1:45 PM EDT
I mentioned .. https://twitter.com/joshtpm/status/782622399497900032 .. this on Twitter a short time ago. Now I'm seeing others who know much more about this saying similar things. Here's my thought. After thinking over the Times revelation, I wonder whether there's a much, much bigger story here that the Times didn't put together or more likely did see but couldn't prove.
In any case, here's what I'm thinking.
We've known for years that the collapse of Trump's debt ridden casino empire in Atlantic City almost destroyed him more than two decades ago. He was able to wriggle through by a number of angles and connivances. But one of the biggest was that he was able to convince his lenders that they'd be even worse off if he was cleaned out and removed from the picture entirely. Convincing them that he was in essence too big or too important to fail, they took major 'haircuts' (losses) that allowed him to survive. He got others to absorb the impact of the losses, repackaged other parts and put them through bankruptcy, etc.
The key question is how much of the Atlantic City losses did Trump absorb in real terms? How much of those losses were forgiven or written off formally? And perhaps most importantly, how much of those losses were squirreled away or 'parked' in places which effectively put them in a sort of limbo or suspended animation - neither truly absorbed nor forgiven?
Here's where the Times revelation comes into play.
If you sustain real capital losses, you can apply those losses to cancel out future income/profits and reduce your tax liability. But if your losses are canceled out by debt forgiveness, the debt forgiveness is counted as income. That cancels out the losses that would provide you with the tax benefit. In other words, you can't have your cake and eat it too.
But there are many ways to be crafty and end up with both - some of those may simply be aggressive and sleazy and others may be clearly illegal. Bigly. The most obvious way would be to create some new business entity which you technically continued to owe vast sums of money to but which never actually tried to collect - in other words, you 'park' your debt somewhere it will never be heard from again. Any place on the spectrum would go a long, long way to explaining both Trump's abject refusal to release his tax returns and almost perennial audits.
The question is: did Trump really lose almost $1 billion of his own capital in a single year? He definitely took a bath in Atlantic City. So maybe he did. But that number at least strains credulity, especially given how he was subsequently able to recover.
This may be just the first hint of something quite a bit bigger than a momentary political embarrassment.
http://talkingpointsmemo.com/edblog/just-a-hunch--2
See also:
Harry Reid mocks Trump tax leaks: ‘Racist incompetent failure managed to lose a billion dollars’
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=125531517
The big issue is the hit his shareholders in the casino's took while he was
moving the losses from his LLCs and S corps onto to his personal tax return.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=125528574
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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