Here is something I heard Tony Robbins say about Donald Trump, probably decades ago, when I attended one of his seminars: Trump’s Identity is so tied to his wealth, that when he lost all that money in the early 90’s, Trump went on anti-depressants. His own value is so connected to his personal wealth (and, perhaps, the size of his hands?) that he MUST share with us, constantly, how rich he is. And this is a clue as to why he is not releasing his returns. Not because he paid no taxes. He may well be proud of that. It is because it shows failure.
How did Tony Robbins know this? Is it really true? I have no idea. But I do know that Tony knows Trump, and even got his speaking career started, and the story is consistent with everything we know about him.
About the returns: as an Enrolled Agent, licensed to practice before the Internal Revenue Service, who prepared hundreds of those 1995 returns, allow me to weigh in here.
First, these appear to be very real documents. And his accountant has verified this.
[Caveat: I have very mixed feelings about his accountant verifying them, but he is retired, and I am not. It is illegal for me to even acknowledge that someone is my client without their permission, because I am subject to Circular 230. This retired accountant is no longer subject to it. And, he DID verify that he created the returns.]
If you look at the 3 pages of returns that the Times shares in a link, you will see that while he had over $7 million in interest, over $3 million in business income as a sole proprietor on Schedule C, he had over $900 million in NOL -- Net Operating Losses that get carried back 3 years and carried forward 15, until they are gone.
The 3 pages are the 1st pages of his 3 state tax returns - NY, NJ non-resident, and CT non-resident. He was married to Marla Trump at the time.
Note that NJ does not recognize Net Operating losses -- or any losses at all. That's how NJ works. If you have a loss, it just means that you don't have a gain. So he actually had to pay tax to NJ.
Net Operating Losses have value. There is nothing wrong with having a Net Operating Loss. It means that you lost money, and can apply that loss to past or future earnings. I have clients for whom NOL’s are generated. They are perfectly legal.
They ALSO let me know why Trump is hiding his tax returns:
Shame.
He is embarrassed by the losses. They are HUGE. There are likely at least 15 years, or more, of returns which show not just that he paid no tax -- he is likely proud of that -- but that the NOL is proof of his business failure. He is probably YUGELY embarrassed by them.
Break out the Xanax…..