Donald Trump’s troubles continue: IRS audit could cost ex-US President more than $100 mn over Chicago tower

According to an investigation by Internal Revenue Service (IRS), if Trump lose a years-long audit fight over the claim might result in a tax liability over $100 million, NY Times reported.

A look at history of Trump’s Chicago Tower & tax returns

The Republican leader owns ‘The Trump International Hotel and Tower’, a 92-story skyscraper along the Chicago River. It was his last big construction project and the structure was designed by Adrian Smith of Skidmore, Owings and Merrill .

Trump faces many financial losses due to cost overruns and the unfortunate timing of its launch during the Great Recession.

However, when the business tycoon sought to gain tax benefits from his losses, the IRS concluded that he went too far and effectively wrote off the same losses twice.

The first write-off was on Trump’s 2008 tax return. With revenues falling far short of expectations, his debts on the project ensured he would never profit, claiming his investment met the tax code definition of “worthless.”

According to the Times and ProPublica, as a result of this decision, Trump suffered financial losses of up to $651 million for the year.

In 2010, Trump and his tax advisers attempted to wring more benefits from the Chicago project, a move that drew years of investigation from the IRS.

Also Read: Can you buy Trump Tower at auction in New York? Not anytime soon

In his very first move, Trump restructured the tower’s ownership into a new partnership. Later, he utilised his move to justify declaring $168 million in additional losses over the next ten years.

During Trump’s presidency, the IRS conducted a thorough legal examination before pursuing a case against him. The Times and ProPublica, in conjunction with tax specialists, projected that the IRS’s proposed change would result in a new tax bill of over $100 million, in addition to interest and possible penalties.

Following his 2016 presidential campaign, Trump’s tax returns became a matter of considerable speculation as he violated decades of custom and refused to release his records, citing a lengthy audit.

In 2020, Times reported that the IRS was challenging a $72.9 million tax refund claimed by Trump, leading to partial exposure of the audit’s substance.

Is Trump facing another financial threat?

The audit poses yet another significant financial threat to Trump. The Republican Party’s probable 2024 presidential contender has been directed to pay $83.3 million in a defamation lawsuit and $454 million in a civil fraud prosecution filed by New York Attorney General Letitia James. He has appealed both decisions. At present, he is facing a criminal trial in Manhattan, in which he is accused of concealing a hush-money payment to a adult film star Stormy Daniels ahead of the 2016 election.