Trump may have to face tax questions now he is no longer president

'The outcome of all this may be a huge liability for Donald Trump. This is real money'

(REUTERS)

Once his impeachment trial concludes and former president Donald Trump returns to his business, he will face some obvious challenges, such as declining real estate income and investigations from New York authorities.

But he may also have to finally face two tax issues that have been simmering in the background, either of which experts say could carry significant consequences should they materialise now that he is out of office.

One is a massive income tax refund Trump received before entering office, according to the New York Times, one that has quietly been under a years-long review by the Internal Revenue Service and a little-known congressional panel, the Joint Committee on Taxation.

The refund, which the IRS issued to Trump in 2010 for $72.9 million, according to the Times, could be a nonissue for Trump if the agency rules that it was issued appropriately and he should keep the funds.

But if the agency rules against him, he could be asked to pay it back with interest, handing him a debt of more than $100 million at a time when some of his biggest properties are suffering severe revenue losses and the law firm that handled his tax issues cut ties with him following the attack on the U.S. Capitol.

After the Times story, Trump Organisation attorney Alan Garten issued a statement to The Washington Post saying parts of the story were inaccurate, without identifying them. "Over the past decade the President has paid tens of millions of dollars in personal taxes to the federal government," he said. He declined to comment further on Wednesday.

Steven M. Rosenthal, a tax expert who worked for the Joint Committee on Taxation in the 1990s, said he was not surprised that the IRS and the committee didn't issue a decision while Trump was in office. He said it's more likely they'll move forward now.

"The outcome of all this may be a huge liability for Donald Trump," Rosenthal said. "This is real money."

The other issue Trump faces is the possibility that Democrats, after five years of trying, will finally pry free Trump's tax returns now that the party controls both Congress and the White House. Leading House Democrats are still pursuing a lawsuit seeking six years of Trump's returns. On Feb. 3, a federal judge gave officials in the Biden administration until March 3 to decide whether it plans to comply.

No decision has been scheduled for either issue, but experts say legal and administrative authorities are more likely to address Trump's tax issues now that he is a private citizen, even as Biden administration officials debate how much to hold Trump accountable for past actions while also trying to move the country forward.

"With Trump out of the White House, the IRS and state and local taxing authorities will no longer fear going after him," said Bert Ely, a consultant who has testified before Congress on financial matters.

Because the refund is a private tax matter under federal law, the IRS has not said anything about when a decision will be rendered, or whether it already has. The Joint Committee on Taxation also has provided the public with no information.

"The staff of the Joint Committee on Taxation does not comment on the receipt of any review case, nor comment on when any review case's review has been completed," said Thomas A. Barthold, the agency's chief of staff, in an email to The Post.