Trump Accused of Tax Fraud

President Donald Trump is accused of using fraudulent practices to funnel $413 million dollars from his father, Fred Trump, into his own accounts.  An investigation by The New York Times uncovered large gifts from Fred Trump to his children, both through a legal trust and by means of a sham company.

Trump helped his father create a corporation, All County Building Supply & Maintenance Corporation, in 1992, which functioned to transfer millions of dollars from father to son, while avoiding the higher tax rates that apply to gifts and inheritances. The New York Times cited a case in which Fred Trump funneled money through a boiler purchase for one of his apartment complexes. The All County Corporation bought the boiler at a market price and sold it to Fred Trump at a marked-up price, effectively disguising a monetary gift as a business transaction.

President Trump also helped his father manipulate the apparent value of the properties in order to reduce tax payments. According to the New York Times, the Trumps paid $52.2 million in taxes, or approximately a 5% tax rate, falling far below the 55% tax rate imposed on gifts and inheritances at the time.

The fraud allegations could have serious repercussions for President Trump. While he cannot be indicted, because the criminal charges are past the statute of limitations, Trump could face civil fines. Additional charges could arise if it emerges that Trump’s campaign was funded by similar illegal practices. Publicly, the report refutes Trump’s claims that he received absolutely no assistance from his father as he built his empire.

President Trump had campaigned on the statement that his father had only given him a “small loan of a million dollars.” In reality, through a trust which made his children the “landlords” of his apartment complexes, Fred Trump had been gifting large amounts of money to his children since they were young. According to The New York Times, President Trump was earning around $200,000 dollars a year by the age of three and was a millionaire by the age of eight. Overall, Trump has accumulated $413 million in today’s dollars from his father. 

President Trump reacted to the allegations shortly after the reports, tweeting, “The Failing New York Times did something I have never seen done before. They used the concept of ‘time value of money’ in doing a very old, boring and often told hit piece on me. Added up, this means that 97% of their stories on me are bad. Never recovered from bad election call!” 

Many of Trump’s skeptics continue to question the President’s honesty as allegations emerge. Diana Reiss ’20 said, “This idea that Trump is self-made is a myth that he has been perpetuating since the start of his campaign. His family’s history, and now his family’s tax reports, tell a very different story of how he has come to be where he is.”

Despite the reports, Trump retains a strong body of supporters. Yihan Ding ’22 said, “I believe in his motives, and I believe that he should get a second chance [after these allegations].”