Auditor testifies Trump claimed a decade of huge tax losses

NEW YORK (AP) – Donald Trump reported losses on his tax returns every year for a decade, including nearly $700 million in 2009 and $200 million in 2010, his longtime accountant testified Tuesday, confirming long-held suspicions about the former president’s tax practices.

Donald Bender, a partner at Mazars USA LLP who spent years preparing Trump’s personal tax returns, said Trump’s reported losses from 2009 to 2018 included net operating losses from some of the many businesses he owns through his Trump Organization.

“There are losses all these years,” said Bender, who was granted immunity to testify at the company’s tax fraud trial in Manhattan.

The brief exchange marked a rare public discussion of Trump’s taxes — which the Republican has fought to keep secret — though there was no obvious connection to the case at hand.

A prosecutor, Susan Hoffinger, questioned Bender briefly about Trump’s taxes on cross-examination, at one point showing him copies of Trump’s tax papers, which the Manhattan district attorney fought for three years to obtain, before moving on to other topics.

The Trump Organization, the holding company for Trump’s buildings, golf courses and other assets, is charged helping some top executives avoid income tax on compensation they received in addition to their salaries, including rent-free apartments and luxury cars. If convicted, the company could be fined more than $1 million.

Trump has not been charged in the case and is not expected to testify or participate in the trial. The company’s former chief financial officer testified that he came up with the scheme on his own without Trump or the Trump family knowing. Allen Weisselberg, witnesses as part of a plea deal, the company also said it benefited because it didn’t have to pay him as much in wages.

Bender’s testimony came on a day full of Trump-related legal drama, including the U.S. Supreme Court clearing the way for Congress to obtain six years of tax returns for Trump and some of his companies.

Also on Tuesday, the judge in New York Attorney General Letitia James’ civil fraud case against Trump and his company set a trial date of October 2023; a federal appeals court heard arguments in the FBI’s Mar-a-Lago document investigation; and Sen. Lindsey Graham, a Trump ally, testified before a Georgia grand jury investigating alleged 2020 election meddling.

Bender’s testimony about tax losses echoed what The New York Times reported in 2020 when it obtained a stack of Trump’s tax returns. Many of the records reflected massive losses and little or no taxes paid, the newspaper reported at the time.

The Times reported that Trump paid no income taxes in 11 of the 18 years whose records it reviewed and that he paid just $750 in federal income taxes in 2017, the year he became president. Citing other Trump tax records, The Times previously reported that in 1995 he claimed $915.7 million in losses that he could have used to avoid future taxes under the law at the time.

Manhattan prosecutors subpoenaed Bender’s firm in 2019 seeking access to eight years of Trump’s tax returns and related documents, finally getting them after a lengthy legal battle that included two trips to the US Supreme Court.

Bender handled tax returns and other financial matters for Trump, the Trump Organization and hundreds of Trump entities beginning in the 1980s. He also prepared taxes for members of the Trump family and other business executives, including Weisselberg and Weisselberg’s son, who ran a corporate-run skating rink in Central Park.

Weisselberg, who pleaded guilty in August to evading taxes on $1.7 million in extras in exchange for a five-month prison sentence, testified that he hid company-paid extras such as Manhattan apartments and Mercedes-Benz cars from his taxable income by having the company’s controller, Jeffrey McConney, reduce his salary by the cost of these perks.

Bender testified that Weisselberg kept him in the dark about that arrangement — and that he only found out about it from prosecutors last year.

But emails shown in court Tuesday suggested McConney tried to let him in as early as 2013, with attached spreadsheets showing Weisselberg’s salary and deductions for extras, including Trump-paid tuition for his grandchildren’s private schooling .

Bender, who testified that he received numerous emails from Trump executives daily, said he did not recall seeing those messages. If he had, he said, “We would have had a serious conversation about continuing with the client.”

Mazars USA LLP has since dropped Trump as a client. In February, the firm said the annual accounts it prepared for him “should no longer be relied upon” after James’ office said the statements regularly misstated the value of assets – a claim at the heart of her lawsuit..

Trump blamed Bender and Mazars for the company’s problems, writing on his Truth Social platform last week: “The highly paid accounting firm should have routinely picked this stuff up – we trusted them. VERY UNFAIR!”

Bender testified that he directed Weisselberg to address any issues as scrutiny of the Trump Organization intensified after Trump’s election in 2016 and advised him to end a questionable practice: the company’s longstanding, tax-saving habit of paying executive bonuses as freelance income.

The auditor said he told Weisselberg, “If there’s anything that bothers you, even the slightest chance, we have to set the highest standards so that the business has to be, effectively, squeaky clean.”

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