Latest On 'The New York Times' Investigative Report On Trump's Tax Returns The New York Times has reported that Trump declared a $916 million loss on his 1995 income tax returns. NPR's Rachel Martin talks to Russ Buettner, one of the reporters who investigated the story.
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Latest On 'The New York Times' Investigative Report On Trump's Tax Returns

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Latest On 'The New York Times' Investigative Report On Trump's Tax Returns

Latest On 'The New York Times' Investigative Report On Trump's Tax Returns

Latest On 'The New York Times' Investigative Report On Trump's Tax Returns

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  • <iframe src="https://www.npr.org/player/embed/496282789/496282790" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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The New York Times has reported that Trump declared a $916 million loss on his 1995 income tax returns. NPR's Rachel Martin talks to Russ Buettner, one of the reporters who investigated the story.

RACHEL MARTIN, HOST:

It sounds like a story out of a movie. An envelope from an anonymous source arrived on reporter Susanne Craig's desk at The New York Times last month. The return address marked Trump Tower. Inside were Donald Trump's 1995 tax returns. The New York Times revealed their findings and posted a copy of Trump's tax records on its website last night. The documents show that in 1995 Donald Trump declared a $916 million loss. Here to talk more about all this is Russ Buettner of The New York Times, one of the reporters who investigated this story. Russ, welcome to the program.

RUSS BUETTNER: Thanks, Rachel.

MARTIN: He declared a $916 million loss. What does that mean in terms of whether or not he paid federal income taxes?

BUETTNER: Well, it's essentially like a gift card from the government for almost a billion dollars. It means that the next billion dollars, $916 million, he earned over any time over the next 15 years after that or three years before that he could collect without paying any federal income taxes on it or any New York state income taxes.

MARTIN: But of course it's not definitive, right, so he could have paid those taxes.

BUETTNER: He - well, I guess he could elect to on his own if he wanted to optionally or there's a possibility that he never made that much taxable income. There are so many other write-offs that are available to real estate people. That may be the case. So it is hard to tell. It is a snapshot in time.

MARTIN: You and your fellow reporters, though, spoke to tax experts before publishing this story. Was what Donald Trump did legal?

BUETTNER: It was legal to the best of our knowledge. There's nothing in the returns itself that would suggest that there was anything illegal about it. It is a benefit that is available to people own - who own certain kinds of businesses in certain corporate structures. It was of a magnitude that none of them had ever seen or heard of before.

MARTIN: It's a pretty limited picture, though. What exactly was in that envelope, and do you have any idea where it came from?

BUETTNER: We don't have any idea where it came from. I don't - we don't really think it came from Trump Tower. It was just the first page of his state returns for New York, which is almost identical to what the federal tax return looks like for the state of Connecticut and the state of New Jersey. And there were just some very big numbers on there. I can kind of explain one oddity that fascinated us if you'd like.

MARTIN: Yeah, sure.

BUETTNER: So the numbers were so large that the digits to the left that, you know, put it into the hundreds of millions of dollars were of a slightly different typeface and in a slightly different position - you can see that on the documents on our website - than the rest of the numbers on those columns. And that was something that troubled us, that really gave us pause. Does this really mean something? And when my colleague David Barstow traveled to Florida, showed them to the tax accountant who had handled these documents, that was the first thing he recalled was that his program wouldn't allow numbers that large. And he had to take it out of his printer and type it using an old typewriter to add those digits.

MARTIN: There's been a lot of speculation about Donald Trump's foreign investment holdings and the extent of his charitable giving. Did you learn anything about that from these documents?

BUETTNER: You - there is nothing on that. No, that would be on the supporting schedules whether he'd earned - what his, you know, income sources were. And I doubt that that would show up. It would have to show up as business revenue buried into some sort of supporting schedule. And there was not the schedule for deductions that might show charitable giving. What is noteworthy to us is that there are, as everyone knows, several optional small charitable contributions you can make to a veterans organization, a wildlife preservation fund and such things by checking a box on a tax return, and he did not check any of those boxes.

MARTIN: How has Donald Trump and his campaign, how have they responded this morning?

BUETTNER: The first thing we got last night after we sent questions to them was a letter from their attorney threatening to sue us and suggesting we were doing something illegal by publishing these. And then a while later, we got a rather lengthy response, which I believe we posted in its entirety on our website, saying that - not confirming the numbers, not denying the numbers, saying that Donald Trump had a responsibility to his company and his family to pay as little of taxes as possible, that he understands the tax code better than anyone and therefore is best situated to make appropriate changes to it and also suggesting something about Hillary Clinton's misdeeds being of a greater magnitude.

MARTIN: No doubt there will be more questions about just what he plans to fix in the tax code. Russ Buettner reported this story for The New York Times along with Susanne Craig, David Barstow and Megan Twohey. Russ, thanks so much for taking the time.

BUETTNER: Thanks for having me.

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'NYT' Report: Trump's Tax Records Show He May Not Have Owed Taxes For 18 Years

Real estate magnate Donald Trump stands above the New York Stock Exchange after taking his flagship Trump Plaza Casino public in New York City. Trump's business losses in 1995 were so large that they could have allowed him to avoid paying federal income taxes for as many as 18 years, according to records obtained by The New York Times. Kathy Willens/AP hide caption

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Kathy Willens/AP

Real estate magnate Donald Trump stands above the New York Stock Exchange after taking his flagship Trump Plaza Casino public in New York City. Trump's business losses in 1995 were so large that they could have allowed him to avoid paying federal income taxes for as many as 18 years, according to records obtained by The New York Times.

Kathy Willens/AP

Donald Trump's campaign is responding to a New York Times report that the real estate mogul claimed hundreds of millions of dollars in losses on tax returns in 1995 — an amount that could have allowed him to legally avoid paying income taxes for many years.

The 1995 tax records obtained by the newspaper show Trump as having reported a $916 million loss on personal income tax returns during that year.

Times reporter Susanne Craig, who's written about the Republican candidate's business ventures, received three pages of returns via mail from an anonymous source: "The first page of a New York State resident income tax return, the first page of a New Jersey nonresident tax return and the first page of a Connecticut nonresident tax return."

The Times hired tax law experts to analyze the documents, which the outlet notes, are "a small fraction of the voluminous tax returns Mr. Trump would have filed in 1995."

Those consultants determined that "tax rules especially advantageous to wealthy filers would have allowed Mr. Trump to use his $916 million loss to cancel out an equivalent amount of taxable income over an 18-year period."

Under federal law at the time, a declared loss of that size could have allowed Trump to avoid federal taxes for as much as 18 years in a row, according to tax experts interviewed by the newspaper, "enough to wipe out more than $50 million a year in taxable income" over that stretch of time.

The report suggests he may have benefited most from the "net operating loss" tax provision that, in short, allows for a range of business losses to be used to nix an "equivalent amount of taxable income from, say, book royalties or branding deals."

The possibility of an 18-year-long tax avoidance is in line with IRS rules from 1995 that permit such net operating losses to be used to nullify taxable income earned in the three years before the net operating loss, in addition to the 15 years after the loss.

In a statement released Saturday, the Trump campaign didn't dispute the Times' claims, but calls Trump 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." It goes on to say that Trump has many hundreds of millions in property, sales, and local, state and federal taxes — without explicitly mentioning income taxes.

After almost 14 hours of rare Twitter silence, Trump himself rang a similar tune in response to the Times report.

Trump's income tax history is impossible to verify, because he's broken a decades-long tradition for major-party presidential nominees and refused to release his tax returns. He says he's being audited by the IRS, although there's no legal prohibition on releasing his taxes while under audit.

Over the past several months, the Republican presidential candidate's finances have been subject to severe scrutiny, especially considering his penchant to tout his business record and wealth, albeit without talking specifics, nor much of a public record to go on.

In Monday's debate, Democratic rival Hillary Clinton raised past records showing Trump did not pay income taxes in a couple of years in the late 1970s. Trump did not dispute that and responded by saying, quote, "that makes me smart."

It's true that none of the report suggests any illegal activity on behalf of Trump.

"The tax experts consulted by The Times said nothing in the 1995 documents suggested any wrongdoing by Mr. Trump, even if the extraordinary size of the loss he declared would have probably attracted extra scrutiny from I.R.S. examiners."