The New York State Department of Taxation and Finance has launched an investigation following a New York Times report that says U.S. President Donald Trump used questionable schemes and outright fraud to avoid paying taxes and greatly increase his fortune, which started with money from his parents.
The agency began the probe Tuesday at the request of New York City Mayor Bill de Blasio.
"I’ve directed NYC’s Department of Finance to immediately investigate tax and housing violations and to work with NY State to find out if appropriate taxes were paid," de Blasio, a Democrat, wrote Tuesday evening in a post on Twitter.
I’ve directed NYC’s Department of Finance to immediately investigate tax and housing violations and to work with NY State to find out if appropriate taxes were paid. https://t.co/AVCJ0VWH3T— Mayor Bill de Blasio (@NYCMayor) October 3, 2018
Trump likes to portray himself as a self-made man, saying he started with a relatively modest $1 million loan from his father and built his riches through investments and deals.
But in an extensive and detailed 40,000-word story, the Times reports Trump received about $413 million from his father, Fred Trump, a New York real estate mogul.
Fred Trump began funneling money to Donald Trump and his siblings when they were young children and the newspaper said they are still getting money from the real estate empire today.
The newspaper reported that Trump helped his father build up his fortune by dodging taxes, including what the paper calls improper tax deductions.
The report alleges Donald Trump schemed to underestimate the value of Trump real estate holdings to sharply reduce the tax bill.
The Times also reports Donald Trump and his siblings set up a fake corporation to hide large cash gifts from their father.
According to the newspaper, tax records show the Trump family paid just a fraction of the taxes they were obligated to pay to the federal government under the tax code.
Without denying any wrongdoing, Trump dismissed the Times report on Tuesday on Twitter, describing it as a "very old, boring and often told hit piece on me."
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!— Donald J. Trump (@realDonaldTrump) October 3, 2018
Late Tuesday, the White House released a statement regarding the Times' story.
“Fred Trump has been gone for nearly twenty years and it’s sad to witness this misleading attack against the Trump family by the failing New York Times. Many decades ago the IRS reviewed and signed off on these transactions. The New York Times’ and other media outlets‘ credibility with the American people is at an all time low because they are consumed with attacking the president and his family 24/7 instead of reporting the news," White House press secretary Sarah Huckabee Sanders said in a statement.
"... The New York Times can rarely find anything positive about the President and his tremendous record of success to report. Perhaps another apology from the New York Times, like the one they had to issue after they got the 2016 election so embarrassingly wrong, is in order," her statement said.
The newspaper based its story on interviews with Fred Trump's former employees and more than 100,000 pages of documents, including the elder Trump's personal tax returns.
Apparently, none of the president's tax returns was used to write the Times report. President Trump has broken with White House tradition and refused to release his returns.
A Trump lawyer, Charles Harder, said in a statement Tuesday that "The New York Times allegations of fraud and tax evasion are 100 percent false and highly defamatory. There was no fraud or tax evasion by anyone. The facts upon which The Times bases its false allegations are extremely inaccurate."
A statement from President Trump's brother, Robert, points out that Fred Trump died in June 1999 and says the Internal Revenue Service closed his estate two years later. He said the Trump family has no further comment on the allegations and appeals to everyone to let Fred and Mary Anne Trump rest in peace.
The New York Times said according to tax experts, President Trump is unlikely to face criminal prosecution for tax fraud because the alleged crimes took place too long ago.
But the experts told the Times he could still face civil penalties and fines.
White House Bureau Chief Steve Herman contributed to this report.