U.S. President Donald Trump speaks at the Rose Garden of the White House in Washington, D.C., U.S. (Photographer: Andrew Harrer/Bloomberg)

New York Tax Department Probes Trump Taxes From Decades Ago

(Bloomberg) -- New York state tax authorities have opened an investigation into allegations reported in the New York Times that President Donald Trump and his family created their real estate empire through “instances of outright fraud,” evading taxes on hundreds of millions of dollars.

“The Tax Department is reviewing the allegations in the New York Times article and is vigorously pursuing all appropriate avenues of investigation,” said James Gazzale, spokesman for Department of Taxation and Finance.

Under New York and federal law, there’s no statute of limitations to pursuing civil tax cases if authorities suspect an intent to evade taxes. Generally, the activities described by the paper would be too old to lead to a criminal inquiry.

The Times reported Tuesday that Trump received vastly more from his father, Fred Trump, than he has previously stated and that his father backstopped his son’s businesses during times of financial distress. In addition, the newspaper reported that the family used a variety of schemes -- some potentially illegal -- to minimize their taxes.

“The New York Times’ allegations of fraud and tax evasion are 100 percent false,” Charles J. Harder, a lawyer for President Trump, said in a statement. “There was no fraud or tax evasion by anyone. The facts upon which the Times bases its false allegations are extremely inaccurate.”

The elder Trump was a successful real-estate developer active throughout the city’s boroughs of Queens and Brooklyn. The state tax department had previously opened an investigation into the president’s charity, the Trump Foundation.

In a statement released Tuesday night, White House Press Secretary Sarah Huckabee Sanders said "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." She added that "many decades ago the IRS reviewed and signed off on these transactions."

The newspaper said its findings show that Trump’s claims that he’s a self-made billionaire, who had received $1 million from his father, are false. The newspaper said it had reviewed 100,000 documents, including the elder Trump’s tax returns, to calculate that Trump and his siblings had received the equivalent in today’s dollars of $413 million worth of assets.

By expressing Fred Trump’s payments to his children into today’s dollars, the paper accounts for inflation to help readers understand the current value of the tax benefits reaped decades ago. Trump, in a tweet on Wednesday morning, faulted the paper for doing that. “They used the concept of ‘time value of money’ in doing a very old, boring and often told hit piece on me,” he wrote.

The state’s tax review was first reported by CNBC.

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