World

Donald Trump's 2005 tax returns partially revealed after leak

The White House says President Donald Trump made more than $150 million in income in 2005 and paid $38 million in income taxes that year. The figure was released after MSNBC host Rachel Maddow said she had a copy of his tax return.

U.S. president paid $38M in taxes on more than $150M in income

The White House confirmed Tuesday night that in 2005 President Donald Trump paid $38 million in taxes on $150 million of income. (Reuters)

The White House said Tuesday that President Donald Trump made more than $150 million US in income in 2005 and paid $38 million in income taxes that year.

The acknowledgement came shortly before The Rachel Maddow Show reported on two pages of Trump's 2005 tax forms on her Tuesday night MSNBC show.

MSNBC said it received the document from financial journalist David Cay Johnston 1:01

The records were obtained by Pulitzer Prize-winning journalist David Cay Johnston, who runs the website DCReport.org. Johnston said he received the documents unsolicited, in the mail, and told Maddow he was open to the possibility that they had been leaked by sources close to Trump.

The documents have become highly sought-after because Trump refused to release his returns during the campaign, breaking a decades-long tradition of candidates. He claimed he was under audit by the Internal Revenue Service and said his attorneys had advised against it — though experts and IRS officials said such audits don't bar taxpayers from releasing their returns.

The White House pushed back pre-emptively Tuesday night, saying that publishing those returns would be illegal.

"You know you are desperate for ratings when you are willing to violate the law to push a story about two pages of tax returns from over a decade ago," the White House said in a statement issued on condition that it be attributed to an anonymous official, although the president has decried the use of anonymous sources.

Trump supporters begin using the hashtag #ThankYouMaddow after the information failed to reveal any suspicious activity, although many questioned why only two pages would be made available.

Tom Perez, newly minted Democratic National Committee leader, said it was a welcome distraction for Trump from other issues his administration faces.

The unauthorized release or publishing of federal tax returns is a criminal offence, punishable by a fine of up to $5,000 and up to five years in jail. But Maddow argued that MSNBC was exercising its First Amendment right to publish information in the public interest.

Focus on Alternative Minimum Tax

Trump's hefty business loss appears to be a continued benefit from his use of a tax loophole in the 1990s, which allowed him to deduct previous losses in future years. In 1995, Trump reported a loss of more than $900 million, largely as a result of financial turmoil at his casinos.

Tax records obtained by The New York Times last year showed the losses were so large they could have allowed Trump to avoid paying taxes for up to 18 years. But Trump's 2005 filing shows another tax prevented him from realizing the full benefit of those deductions.

David Cay Johnston, seen in 2015, has reported on Trump's business dealings for decades, with his book, The Making of Donald Trump, released during last year's presidential campaign. (Paul Morigi/AP Images for InsideSources)

The bulk of Trump's tax bill that year was due to the Alternative Minimum Tax, a tax aimed at preventing high-income earners from paying minimal taxes.

The AMT requires many taxpayers to calculate their taxes twice — once under the rules for regular income tax and then again under AMT — and then pay the higher amount. Critics say the tax has ensnared more middle-class people than intended, raising what they owe the federal government each year.

Were it not for the AMT, Trump would have avoided all but a few million dollars of his 2005 tax bill.

Trump's campaign website called for the end of the AMT, which is expected to bring in more than $350 billion in revenues from 2016 to 2025.

As a candidate and as president, Trump has refused to release his tax returns, breaking a decades-long tradition. Although he initially promised to do so, he later claimed he was under audit by the Internal Revenue Service and said his attorneys had advised against it — though experts and IRS officials said such audits don't bar taxpayers from releasing their returns.

Trump long insisted the American public wasn't interested in his returns and said little could be learned from them. But Trump's full returns would contain key details about things like his charitable giving, his income sources, the type of deductions he claimed, how much he earned from his assets and what strategies Trump used to reduce his tax bill.

The issue was a major point of attack from his election rival Hillary Clinton, who suggested Trump had something to hide.

The White House has not said whether or not the president plans to release his returns while he's in office. More than one million people have signed a White House petition urging the president to release them.

With files from CBC News

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