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Abu Dhabi, UAESaturday 20 October 2018

New York authorities investigating Donald Trump tax dodging report

The US president was a millionaire before the age of nine

The President is yet to comment on the report. EPA
The President is yet to comment on the report. EPA

The New York state tax department said on Tuesday it was investigating reports that United States President Donald Trump helped his parents dodge millions of dollars in taxes and received far more money from his father's real estate empire than he claimed in the past.

Earlier, The New York Times said its own exhaustiveprobe of a vast trove of tax returns and confidential records showed Mr Trump had engaged in suspect tax tactics, including "outright fraud", that greatly inflated the funds from his parents.

Mr Trump has stated on numerous occasions that he received little help from his father, New York property developer Fred Trump, in building his fortune.

"The Tax Department is reviewing the allegations in the NYT article and is vigorously pursuing all appropriate avenues of investigation," New York state Taxation and Financing spokesman James Gazzale told AFP.

The Times said Mr Trump received the equivalent of $413 million (Dh1,517m) in today's dollars from his father's real estate activities - having earned $200,000 per year in today's dollars, by the age of three. By eight, he was already a millionaire.

Mr Trump received the equivalent of $1m a year from his father shortly after his college graduation, it added, noting that the funds grew to more than $5m per year when he was in his forties and fifties.

The Times said the bulk of the funds came from tax evasion tactics that Mr Trump helped to devise, including a "sham corporation" he and his siblings created to hide millions of dollars in parental gifts.

There were also millions of dollars in improper tax deductions, it is alleged. Mr Trump helped to further reduce his parents' tax bill by undervaluing their real estate holdings by hundreds of millions of dollars on tax returns, according to the Times.

The newspaper said Mr Trump's parents, Fred and Mary Trump, who died respectively in 1999 and 2000, transferred more than $1 billion in wealth to their five children.

This could have produced a tax bill of at least $550m but the Trumps paid just $52.2m, the Times said, citing tax records.

One of Mr Trump's lawyers, Charles Harder, decried the newspaper's allegations as "100 per cent 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.

"President Trump had virtually no involvement whatsoever with these matters."

Mr Harder insisted the matter was mostly handled by other relatives who relied "entirely" upon licensed professionals to "ensure full compliance with the law".

The White House, meanwhile said: "Many decades ago, the IRS reviewed and signed off on these transactions."

Spokeswoman Sarah Sanders instead shifted blame onto the Times itself, saying: "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."

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The Times said Mr Trump's tax-hating father used various methods to funnel his wealth to his children and shield it from the Internal Revenue Service, some of which tax experts said was improper or possibly illegal.

Among the tactics, Fred Trump gave ownership of most of his real estate empire to his children a year-and-a-half before his death.

The properties were valued at just $41.4m, although they were sold off over the next decade for more than 16 times that amount, it said.

The Times said Mr Trump got a cut of $177.3m, or $236.2m in today's dollars, from the sale.

Breaking with the practice of past presidents, Mr Trump has refused to release his tax returns.

Citing tax experts, the Times said he was unlikely to face criminal prosecution for helping his parents to evade taxes but could face civil fines for tax fraud if the matter is pursued by the authorities.