Former President Donald Trump could face a $100 million tax bill after the IRS said he twice sought to write off the same losses on his struggling 92-story Chicago skyscraper, according to a New York Times and ProPublica report.
The Trump International Hotel and Tower Chicago, built on the site of the former Chicago Sun-Times headquarters, opened during the Great Recession in 2009. The vast condo-hotel project was saddled with cost overruns, according to the report.
In the IRS inquiry, acquired by The Times and ProPublica, the agency said Trump tried to claim tax benefits from financial losses associated with the project and that he practically wrote off those losses twice.
Trump’s first tax write-off for the Chicago tower came in his 2008 tax return, when sales at the building faltered below expectations. Trump claimed that his share of investment in the structure amounted to what the tax code classified as “worthless” — largely because the debt he incurred on the building demonstrated that he wouldn’t profit.
In that year’s tax return, Trump noted that he lost up to $651 million on the project, according to The Times and ProPublica.
The Times and ProPublica reported that there weren’t any signs that the IRS initially pushed back against Trump’s first claim, which surprised tax experts who spoke with the outlets.
Trump and his tax advisors in 2010 tried to obtain additional benefits from the skyscraper project by transitioning the company that owned the building into a new partnership. But Trump wielded the levers of power for both companies. And for the next decade, he used the business move to try to claim $168 million in new losses.
Because of the nature of Trump’s claims, the IRS conducted a “high-level legal review” before they began their inquiry, according to the report.
After looking at the inquiry, The Times and ProPublica — and tax experts — concluded that the revision pursued by the IRS would give Trump an updated tax bill exceeding $100 million, excluding any additional penalties.
Eric Trump, the executive vice president of the Trump Organization, responded to the report, stating that the company was “confident” in its actions regarding the Chicago skyscraper.
“This matter was settled years ago, only to be brought back to life once my father ran for office,” he said in a statement to the Times and ProPublica. “We are confident in our position, which is supported by opinion letters from various tax experts, including the former general counsel of the IRS.”
Business Insider reached out to the Trump campaign for comment.
News of the IRS inquiry comes during a presidential year in which Trump is set to once again be on the ballot, with his personal finances and the extent of his wealth continuing to be a major point of discussion in the race.
A court ordered Trump, in January, to pay $83.3 million in defamation damages to the writer E. Jean Carroll. (In a separate civil trial last year, a New York jury found the former president liable for the sexual abuse of Carroll.)
And, in February, a New York judge ordered Trump to pay $355 million in penalties for what the judge said was a scheme by the former president to fraudulently inflate the value of his properties. Prosecutors in April then accepted a $175 million bond from Trump in the civil fraud case, which the ex-president posted to block the larger judgment as he goes through the appeals process.
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