Former President Donald Trump faces a potential tax bill exceeding $100 million if he loses his ongoing IRS audit battle over tax deductions from his Chicago tower. This saga began in 2008 and has resurfaced with renewed vigor since his political ascent.
The story began in 2008 when Trump reported losses of $658 million on the Chicago property. The losses were reported under the premise that the property fit the IRS definition of being “worthless”. The reason given was that condominium sales were disappointing and retail space went unfilled amid a deep U.S. recession.
“The IRS inquiry was settled years ago, only to be brought back to life once my father ran for office. We are confident in our position,” said Eric Trump, Donald Trump’s son, in a statement provided by Trump’s presidential campaign.
However, the plot thickened in 2010 when Trump transferred the ownership of the property to a different holding company that he also controlled. This move was used to save money on taxes by reporting an additional $168 million in losses over the next decade on the same property. This has led to allegations that Trump may have double-dipped on tax losses tied to the Chicago skyscraper.
An unnamed IRS official defended the integrity of the audit process, dismissing suggestions of politically motivated audits.
“Audits are handled by career civil servants, and the IRS has strong safeguards in place to protect the exam process – and against politically motivated audits. It’s ludicrous and untrue to suggest that senior IRS officials somehow targeted specific individuals for National Research Program audits,” the official said.
Since December 2022, there have been no updates on the status of the IRS inquiry. If Trump loses the audit battle, he could owe more than $100 million, including penalties. “I would love to give them, but I’m not going to do it while I’m under audit,” Trump himself has publicly commented on his decision not to release his tax returns while under audit.
This situation serves as a reminder of the complexities of tax law and the potential consequences of aggressive tax strategies. It also highlights the importance of transparency in financial dealings, particularly for public figures.
As the story continues to unfold, it will be interesting to see how it impacts Trump’s financial future and reputation. Regardless of the outcome, this case is likely to remain a topic of discussion in the financial world for some time to come.
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