Donald Trump insists that he can’t release his tax returns because he’s being audited. That was exposed as a transparent lie almost as soon as he peddled that excuse; the IRS said in February 2016 that people under audit can release their returns.
On Thursday, the Palm Beach Post discovered what may be the real reason. Based on almost a quarter-century of public records, it looks like Trump turned Mar-a-Lago into a very lucrative and very illegal tax shelter. In the process, he was able to hide several million dollars from the federal government. Watch here for details.
Trump bought Mar-a-Lago in 1985, and had spent some $2 million preserving it. Looking for a way to turn the historic estate into a money maker, he proposed turning it into a private club. In order to assure Palm Beach officials and residents that he would not gut Mar-a-Lago–which had been declared a National Historic Landmark in 1980–Trump submitted a detailed plan to the Palm Beach Town Council spelling out how he would ensure that its finest features would not be touched. He also planned to donate the needed easement to the National Trust for Historic Preservation.
When he made this proposal, Trump was well aware that the IRS would probably not let him get away with it. He planned to charge membership fees of $50,000, and donors are not supposed to realize any benefit from a charitable donation. Bogus easements like this one made regular appearances on the IRS’ list of “Dirty Dozen Tax Scams.”
How do we know that Trump knew he was playing with fire? Trump’s lawyers insisted that the promised easement not be put in writing. Due to skepticism on the council, it took two years before Trump donated the easement and the town council let the club open. Despite the two-year headache, Trump has made out like a bandit. He was able to deduct $5.7 million from his 1995 tax return.
John Echeverria, a professor at Vermont Law School, said that this deal was “plainly a quid pro quo,” not a real charitable donation. Bill Milton, an attorney and expert on preservation easements, also has “no doubt” that this was a quid pro quo. So does Wes Blackman, the director of the project that turned Mar-a-Lago into a club. Blackman was responsible for ensuring that the renovations took place in accordance with the deal’s terms. He bluntly stated that the easement was “a condition and requirement” of the club being allowed to open.
In recent years, the IRS has begun cracking down on dodgy easements. Despite this, Trump still makes liberal use of them. Since the Mar-a-Lago deal, he has donated an estimated $100 million in easements from his golf courses. Never mind that the IRS has given the hairy eyeball to golf course easements, since they provide no benefit worth mentioning to the public or the environment. Echeverria believes that if Trump is indeed being audited, it’s very likely because of those easements.
This story could not hit closer to home for Trump, who took off for Mar-a-Lago–or the “Southern White House,” as he calls it–after signing the tax reform bill into law. However, as I write this on Friday night, we have yet to see any angry tweets from Trump, even though The Post’s story went live just before 1 p.m. on Thursday. Maybe it’s because he knows The Post has him busted.
(featured image courtesy Christine Davis, available under a Creative Commons-BY license)