A New York Times investigation published Sunday that revealed details of President Trump’s long-sought-after tax returns — including years of business losses and tax avoidance — did not come as a major surprise to Boston-area tax experts, who offered insights to the Globe on Monday.
The Times report said, among other things, that Trump paid no federal income taxes in 11 of the 18 years examined; that his businesses’ large losses have helped him lower his tax bills; that he has taken questionable tax deductions for expenses; and that his businesses have received money from lobbyists and foreign officials.
Jeffrey Levine, a partner with the accounting firm Alkon & Levine in Newton, said “everyone expected there were government kickbacks; everyone expected his family was being compensated.”
In a series of tweets Monday morning, Trump suggested that his low tax bill — $750 in federal income tax the year he was elected, but zero for several years prior — was due to “depreciation and tax credits.”
John Geraci, an accountant at LGA in Woburn, said in an e-mail that “tax law in the US can be very favorable for real estate investors who own and manage rental properties.”
The Fake News Media, just like Election time 2016, is bringing up my Taxes & all sorts of other nonsense with illegally obtained information & only bad intent. I paid many millions of dollars in taxes but was entitled, like everyone else, to depreciation & tax credits.....— Donald J. Trump (@realDonaldTrump) September 28, 2020
Several accountants and lawyers said the average person might be tempted to think Trump’s tax practices are consistent with those of other wealthy people, especially in real estate. But they said the findings raise questions.
“I think it is definitely true that people in the real estate field have the opportunity to build wealth while not paying taxes between interest and depreciation,” Levine said. “But to have years and years of losses and to purposely take aggressive positions, I think, is unusual.”
Levine said he was taken aback by the “enormity" of the revenues and losses in Trump’s various business ventures, which he compared to numbers one would see for multibillion-dollar companies. That’s in addition to the specific details about Trump’s deducted personal expenses, which he said were “blatant and should have been caught.”
The investigation also sparked a reaction from law students who are studying tax law.
Professor Meredith Conway of the Suffolk University School of Law spent an hour on Zoom Monday talking about the report on Trump’s taxes, after students logged into class and immediately had questions.
Conway said students were interested in understanding how Trump could write off $70,000 that was paid to a hair stylist during “The Apprentice” television show.
“If it is a stylist doing his hair before the show starts, it sounds legitimate," she said. "If it is just him getting his hair cut and deducting it, it doesn’t sound legitimate. But none of us know the circumstances.”
She said students were also curious about how Trump was able to compensate his children by paying them as consultants, and where his business losses came from. The Times found evidence that Ivanka Trump was paid $747,622 as a consultant and that Donald Trump’s “core businesses” were reporting more than $100 million in losses over a two-year period.
Without the tax documents in front of her, Conway emphasized that although some figures may sound suspicious, they are not inherently illegal.
“On a moral level, am I OK with all of these deductions? Absolutely not,” she said. “But the provisions are there . . . Trump supporters are going to say he is allowed to take advantage of tax laws."
She also spoke with her class about how Trump’s refusal to release his tax returns could hinge on the fact that he finds them to be embarrassing, rather than incriminating.
“It is a double-edged sword: He wants to minimize his taxes and take aggressive positions that look like he is running losses and allow him to pay less tax," she said. “That slams his ego because he wants to be portrayed as this really wealthy businessman."
Levine said that beyond Trump’s paying only $750 in taxes in 2016 and 2017, he sees a bigger issue in the fact that the president has several conflicts of interest.
The Times’s investigation revealed more details surrounding Trump’s refusal to divest himself of his business interests after being elected — his properties have attracted large sums of money from lobbyists and foreign officials. And since he has been in office, Trump has collected funds from deals in countries including the Philippines and Turkey.
“There is still money coming to him because of his business ventures that are enhanced by the fact that he is president . . . it is disgusting," Levine said. Trump "is ridden with conflict.”
Ray Madoff, a professor at Boston College Law School, said the “power of taxes in a democracy can’t be understated.”
“He saw how all of the games were played, but instead of closing loopholes, he chose to pass a bunch of rules to give himself greater opportunities to line his own pocket,” she said. “This is the greatest act of disloyalty to the American public.”