IRS Audit of Trump Could Cost Former President More Than $100 Million
The 92-story, glass-sheathed skyscraper along the Chicago River is the tallest and, at least for now, the last major construction project by Trump. Through a combination of cost overruns and the bad luck of opening in the teeth of the Great Recession, it was also a vast money loser.
But when Trump sought to reap tax benefits from his losses, the IRS has argued, he went too far and in effect wrote off the same losses twice.
The issues around Trump’s case were novel enough that, during his presidency, the IRS undertook a high-level legal review before pursuing it. ProPublica and the Times, in consultation with tax experts, calculated that the revision sought by the IRS would create a new tax bill of more than $100 million, plus interest and potential penalties.
The reporting by ProPublica and the Times about the Chicago tower reveals a second component of Trump’s quarrel with the IRS. This account was pieced together from a collection of public documents, including filings from the New York attorney general’s suit against Trump in 2022, a passing reference to the audit in a congressional report that same year and an obscure 2019 IRS memorandum that explored the legitimacy of the accounting maneuver. The memorandum did not identify Trump, but the documents, along with tax records previously obtained by the Times and additional reporting, indicated that the former president was the focus of the inquiry.
It is unclear how the audit battle has progressed since December 2022, when it was mentioned in the congressional report. Audits often drag on for years, and taxpayers have a right to appeal the IRS’ conclusions. The case would typically become public only if Trump chose to challenge a ruling in court.
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