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I watched the debate, and I'm wondering what is going on with Donald Trump's tax return.

I heard Hillary say the deal is either he's (1) less wealthy than he claims to be, (2) not making the charitable contributions he claims to, or (3) not paying federal taxes.

I also read in Fortune that:

Every major party candidate since Richard Nixon in 1972 has made their returns public before election day.

Relevant Questions for Clarification on Topic

  1. Which exact documents is he reluctant to disclose?

  2. Is there anything in these documents that could disqualify him from being President? I wasn't sure if there could be something that may tie his taxes, debt, etc. to a foreign entity or something applicable to cause a conflict of interest for a POTUS (Is there such a thing?)

  3. Is there any legitimacy to any of the three concerns Hillary expressed as to why he'd not want to share his tax information with the American people?

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    If you have an answer for this question, please post it as an answer below, and back it up with reliable references. Further attempts to "answer" this question in the comments will be silently deleted; reserve this space for suggestions and clarifications for the question. – Shog9 Sep 29 '16 at 2:06
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Answers to clarification questions

  1. There are no "rich people" forms. However, there are forms that are far more likely to be interesting when a rich person files them. For example, when someone claims charitable donations on Schedule A or 8283, they need to list the donations. He also has to write out what personal business related tax deductions he's taking on his Schedule C tax forms. There's also a lot of single use forms. The typical filer only fills out one or two. And of course many of his forms are going to be multiple pages where a typical person only uses part of one page.

  2. There are very few actual disqualifications for President. He needs to be a "natural born citizen", a US resident for at least fourteen years, and at least thirty-five years of age. He can't have been President previously for six or more years. His tax forms won't say anything about his citizenship and are unlikely to contain information suggesting his age is below thirty-five or that he has been President previously. It is conceivable but unlikely that they show that Trump was claiming residency outside the United States. It's far more likely that they show information that would make people not vote for him because they look bad. Such information would not be disqualifying as I would use the word but could still be negative.

  3. Yes.

Trump is clearly hiding his tax forms. As his sons (Eric and Don, Jr.) have indicated, the main reason for this is that many people won't understand the information he filed. The most charitable reading of this is that his taxes are complex and complicated. A less charitable way of taking this is that his forms show him taking deductions to which he is not entitled or not counting as income things that he should have.

Note that the claim that his taxes have been audited for the last fifteen years suggests that the latter interpretation is correct. The IRS has limited funds for audits. The only way they could justify multiple audits is if the previous ones made them more money than they cost. Trump's sons may believe that this indicates that the IRS behaved inappropriately, but the neutral arbiter of the US court system apparently wasn't supportive.

IRS audits are different from SEC audits or other government audits. Other audits are to detect wrong doing. It's expected for them to cost money and they are budgeted to do so. Tax audits are to increase revenue.

Also note the following from the IRS Audit FAQ:

Generally, the IRS can include returns filed within the last three years in an audit. Additional years can be added if a substantial error is identified. Generally, if a substantial error is identified, the IRS will not go back more than the last six years.

Trump has said that his current audits date back to 2008. That is well over the three year limit, suggesting that either he is getting different treatment or that there was a substantial error on his returns.

Trump less wealthy than he says

Trump has consistently claimed more wealth than other sources think he has. He has put it at $10 billion or more, while Forbes has him at $4.5 billion and Fortune at $3.75 billion. Tax returns would have the exact numbers for both revenue and expense. They also might hint at debt numbers, as they would show interest paid.

Trump overstating charitable contributions

Trump said that he was going to donate to veterans. He failed to do so. He was caught out on it. He eventually made the donation. So, yes, there is good reason to think that he would lie about making charitable donations. Note that he has other explanations for this.

Trump may not pay taxes

Trump did not deny paying zero taxes in the debate. He said that if he was, it was proof of his good business sense. Absent a denial, that seems fully justified. Of course, that would mean that Hillary Clinton's claim that Trump's tax plan would reduce his taxes is bunk, but that's politics. There's no compiler to enforce coherence of positions. She can claim both that Trump isn't paying taxes and that his tax plan would reduce his taxes. And we can make fun of her for being inconsistent the same way we make fun of Trump for buying his suits from China while saying that it is wrong for people to do so.

Appropriateness of criticism

In the tax forms Mitt Romney released in 2012, he actually didn't take some of the deductions to which he was entitled to increase his apparent tax rate. Romney had two big problems in public perception of his tax rate. First, he tithed 10% of his income to religious charities, which was deductible. Second, most of his income was investment income, which gets a privileged rate. The point of this comparison to Romney is that Romney did experience negative results from releasing his taxes. So Trump has reason to believe that his tax returns would be (mis)interpreted in the same way.

It's not clear that Trump is going to have problems with donating too much to charity (too much to have a politically correct tax rate), but a high amount of investment income is very likely. Also, Trump is likely to have a higher business income than Romney. People might use his revenue numbers as a base rather than his income (profit) numbers.

Just as an aside, I personally have no problem with Presidential candidates or anyone else not paying taxes on charitable donations. To my mind, they should be subtracted from the denominator when calculating the tax rate. However, when those numbers are actually calculated currently they do not do this. This has the effect of making those who donate a lot to charity look like they pay a lower tax rate than they really do.

Note that it is entirely possible that Trump's tax returns are clean as a whistle. If so, it's rather silly for him not to show them. Thus, it's plausible to suspect that there is something that either appears wrong (e.g. a low effective tax rate) or which is wrong (e.g. inappropriately taken deductions). So long as he refuses to release his returns, it's reasonable for Clinton to speculate as to why. Similarly, it's reasonable for Trump to speculate as to why she deleted her emails or refuses to release her transcripts.

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    Comments are not for extended discussion; this conversation has been moved to chat. Continue the discussion on this answer there. – Sam I am Sep 27 '16 at 21:01
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    Forbes yesterday revised their estimate of Trump's wealth sharply downwards from the $4.5B quoted in this answer, to $3.7B. – David Richerby Sep 29 '16 at 14:57
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    I have been wondering this -- but how would he "not pay taxes" as good business sense? It sounds like he has a legal way of not paying taxes -- otherwise not only would he surely have failed his audits, but additionally he would not be so proud about his "good business sense" if indeed he is paying no taxes? Does anyone know what legal methods he is alluding to? Edit: Nevermind, real estate loopholes explained here: lawnewz.com/high-profile/… – HC_ Sep 29 '16 at 18:54
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    @Brythan It should be noted that the tax return will not indicate his wealth or business ties only his income and deductions for that year. The publicly available financial disclosure form which he filed back in May 2016 lists all properties, companies, and stocks he owns. I looked at a copy of it and if I remember correctly he owns over 200 properties and several different property management companies. As for his stocks they were typical stocks like google and apple, and the dividends from each were in the tens of thousands of dollars range, which is small compared to his overall income. – user4574 Sep 29 '16 at 22:34
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    Good answer overall, but you're wrong to dismiss out of hand the assertion that Trump's tax plan would lower his taxes. I'm not suggesting it definitely will (or won't), but the claim wouldn't necessarily be invalidated even if Trump payed no federal income tax over the course of a few years. – jerry Oct 3 '16 at 20:22
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Thanks for the Clarification of the question.

Q.2: "Whether there is anything on the returns that could disqualify him from the Presidency", isn't a clarification of the original question.

The original question raises concerns about a) why Donald Trump might be reluctant to disclose his tax returns, and b) whether any of Hillary Clinton's 3 alternative allegations about his motives has any corroborating evidence elsewhere. So, this new q is an extension/expansion of the question.

Let's stick with the original topic (which is plenty broad enough).

David Cay Johnston, in his book "The Making of Donald Trump", provides dozens of examples of Mr Trump's unethical behavior, from refusing to pay the full amount on contracts that have been fulfilled, to refusing to show apartments to undercover housing inspectors who were posing as minority renters, to making claims that were untrue and promises that were never fulfilled.

The implication is that some of this unethical behavior would be evident from his tax returns (it's hard to imagine there would be no such evidence whatsoever, if Mr Johnston's reporting is anywhere near accurate). I would expect several campaign statements to be undermined by the information in the returns, particularly claims about taxes paid, charitable contributions made, and about his use of tax shelters.

Timothy O'Brien, author of "TrumpNation: The Art of Being Donald", reportedly deposed Mr Trump and obtained Mr Trump's returns. In an interview with CNN in August, he observed, “I think there’s very practical things in those documents that Trump doesn’t want to produce because they’re going to undermine a whole series of claims and remarks he’s made on the campaign trail over the last year.” Mr O'Brien has, like so many other of Mr Trump's detractors, been sued for libel, but he won his case (that is, his facts are accurate). Unfortunately, also like all of the other detractors who have been sued, the settlement gagged them from speaking about the specifics elsewhere. In other words, Donald Trump buys the silence of those who successfully investigate him.

It's no wonder that most of the country is ignorant of his misdeeds and behavioral traits. Apparently, the proof keeps getting erased or locked up.

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    How does your post answer the question? No. 2 question reads "Is there anything in these documents that could disqualify him from being President?" and you are basically saying, some people claimed he did this and that in the past and what? Yes or no? Can you really answer the question without taking a look at his tax returns? Do you think just because HIllary Clinton used a private server means she would continue to do that when she is elected POTUS? I don't see any relevance between the claims of the books and his tax returns. Do you? – Rathony Sep 28 '16 at 10:25
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    If you read my answer carefully, you may have noticed that I intentionally disqualified the editor's interpretation of the original question with respect to Question 2. I pointed out that the gist of Question 2 was not within the scope of the original question. Of course, anyone is free to submit Question 2 for the purpose of getting an answer, but we can't just hijack the original question for that purpose. – jaxter Sep 28 '16 at 17:06
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    Neither the question nor my response include Hillary's management of her email within their scope. Please ask a separate question for a response to your point, instead of going off-topic. – jaxter Sep 28 '16 at 17:09
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    I am not "basically saying, some people claimed he did this and that in the past." That characterization of what I wrote attempts to trivialize and discredit the authoritative published work of a well-respected professional investigative journalist. That work was, as I pointed out in my answer, upheld in a libel lawsuit by Mr Trump against Mr O'Brien which was settled in Mr O'Brien's favor. Kindly reread my answer again before making more disruptive, off-topic and undeservedly dismissive comments. – jaxter Sep 28 '16 at 17:12
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    @Rathony From the answer "The implication is that some of this unethical behavior would be evident from his tax returns", meaning unethical things he did in the past would be evident by his tax return. Remember the audit is judging his past behavior in regards to his taxes, so past behavior seems perfectly relevant. Also, "alleged" is simply the wrong word to use for something that has been proven true. – Alexander O'Mara Sep 29 '16 at 6:47
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He has made a fortune more than others, at the cost of others including taxpayers. The "at the cost of others" bit does not scale to a whole nation. So as president he could not afford if people felt justified paying the tax rates he manages paying in relation to his wealth.

They are also not likely to earn him a lot of sympathies. Also, he's likely better off with professional IRS personnel rifling through his matters while on the clock than with professionals doing parallel work in their free time.

A few years ago, the academic achievements of quite a few German parliament members were coming under the spotlight and it led to a number of academic titles getting revoked because of massive unattributed plagiarism and related problems. The brunt of the sleuthwork was crowdsourced work done on the published doctorate theses.

He will not be doing his own tax returns but hire professionals who know what one can hope to get away with, and will get his feedback on what risks he is willing to take. And he is not all that risk-averse.

So I am not surprised that he is not interested in publishing his tax returns. Of course, few of the previous presidential candidates would have been eager to publish tax returns: they just hoped that it makes the other side look worse than oneself. Most candidates come from a reasonably wealthy background (the only exception I can remember is Eisenhower): that's why publishing them makes a statement in the first place that carries some weight: they might have been born with a silver spoon in their mouth but at least they don't use it for scooping out other people's eyes. Or something.

So to return to your question: I expect his tax returns to be more ugly than provably criminal and to be one area where he cannot actually afford to lead by example. As opposed to all the others I cannot remember right now.

So I expect that none of the stated suspicions of Clinton really applies, and the whoe thing to be an impenetrable icky quagmire rather than a straightforward bottomless pit. It's just that there is a difference between an IRS accountant throwing up his hands in disgust and moving on and a voter doing so.

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