With Trump's Settlement, a Possible $100 Million I.R.S. Penalty Melts Away

"A tax audit that President Trump has been fighting since his peak earning days as a television celebrity was most likely wiped away in this week's settlement with the Justice and Treasury Departments. The agreement, part of a resolution to an unusual lawsuit that Mr. Trump and his sons filed against the Internal Revenue Service, frees the president from a potential adverse ruling that could have cost him more than $100 million, according to an analysis of his tax returns in 2020 by The New York Times."

"Two years ago, Mr. Trump's middle son, Eric Trump, acknowledged to The Times that the audit remained active. During his father's first term in office, the matter was put on hold, records obtained by The Times showed. It is unclear whether the matter was placed on hold again during the president's current term or was resolved. If it was still pending until this week, the increased interest and penalties would have grown significantly."

"The audit dated back to a $72.9 million tax refund that Mr. Trump claimed, and received, starting in about 2010. The total reflected all the federal income tax he had paid, plus interest, for 2005 through 2008, his greatest earning years as the star of his reality show, The Apprentice. Mr. Trump justified the refund claim by declaring huge business losses a total of $1.4 billion from his core businesses for 2008 and 2009 that tax laws had prevented him from using in prior years."

A settlement with the Justice and Treasury Departments likely wiped away a long-running IRS tax audit involving President Trump. The resolution came as part of an unusual lawsuit filed by Trump and his sons against the Internal Revenue Service. The agreement prevented a potential adverse ruling that could have cost more than $100 million, based on a 2020 analysis of tax returns. The audit traced back to a $72.9 million tax refund claimed and received starting around 2010 for tax years 2005 through 2008. The refund included federal income tax plus interest. Trump attributed the refund to large business losses totaling $1.4 billion from 2008 and 2009 that he said tax laws prevented from being used earlier.

Read at www.nytimes.com