NY Times Reporter Tells the Story Behind the Story of the Trump Tax Leak
Donald Trump is the first major party presidential candidate in 40 years not to release his tax returns. However, the New York Times has obtained three pages of Trump's 1995 income tax returns, which it revealed in a controversial investigative report published Saturday.
"Donald Trump Tax Records Show He Could Have Avoided Taxes for Nearly Two Decades, The Times Found," read the headline on the front page of Sunday's New York Times.
"The documents were mailed to us anonymously," David Barstow, who co-authored the piece, told PBS News Hour.
"We spent an awful lot of effort trying to authenticate the documents; we finally succeeded in that when we were able to present them to Donald Trump's tax accountant... and after talking to him at some length and doing some additional reporting, we came to believe that they were in fact the real thing."
The documents showed that Trump declared business losses so large that he could have avoided paying taxes for 18 years. And since the story broke, the Trump campaign has not challenged the validity of the documents; rather, they have called Trump's manipulation of the tax code "genius."
But the documents only represent a tiny portion of what an actual Donald Trump tax return would look like. So how did Barstow and his team reach their conclusions?
"We were able to see that [Trump] showed this enormous loss of roughly $916 million in 1995 and that under IRS tax rules, then in effect, he could use some important provisions of the code to apply that loss against another $916 million in taxable income."
Barstow's team spoke with tax experts who compared Trump's pages to those of other wealthy filers.
"As one of the tax experts explained to us, if one of his clients brought him a tax return that looked like [Trump's] in 1995, he would be saying to him 'congratulations, you can make $916 million and not pay a single nickel in taxes on this,'" Barstow said.
The reporter went on to explain the significance of the piece as it relates to the average middle-class American voter.
"It's not to say to say that Donald Trump did anything illegal or improper," he said. "it's really about the tremendous tax advantages that apply to a wealthy filer like Donald Trump."
Trump considers it smart for him to minimize tax as much as possible, as he stated in the first presidential debate last Monday.
But how exactly does Trump do it?
"What it looks like what happened here is, in the early 1990s Donald Trump came perilously close to complete disaster in his business affairs," Barstow explained. "And what it appears happened is that the losses that his business were suffering... effectively flow[ed] onto his personal income tax form."
Trump then could apply this strategy, under IRS tax rules, to wipe out any potential tax debt for up to 18 years.
The Trump campaign respoded to the piece by stating the candidate is a "highly skilled businessman [who] knows the tax code far better than anyone who has ever run for president."
Minus the superlatives, Barstow does not entirely disagree. "Donald Trump understood very well the way the tax code could be used to protect his wealth...and to help his wealth grow," Barstow concluded, adding that Trump's system isn't that different from other top real estate developers in New York—his returns "just had a few more digits."