So, I guess I felt like I had a duty to tweet something as a tax person about the Trump stuff in the Times. I'm a bit behind, and others on Tax Twitter have done amazing work. Here's my take. TL;DR, some of it is ok, but a lot of it is bad, though confirms what I believed. 1/x

The report from the Times is sprawling. It's actually quite good journalism, and I think it explains a few of the issues well, though not perfectly. 2/x

So, it continues to talk about depreciation and losses that Trump has that he has used "shelter" income. Now, how we should allow depreciation and its timing is a big issue. 3/x

Some actually argue that instead of spreading things out over many years, you should allow a deduction for the entire cost when the property is made or purchased, so-called expensing. 4/x

But that's not what we have here. Our system requires that cost to get spread out over many years, called depreciation, measuring to some extent the wear and tear on the property. But tax depreciation is actually faster than economic depreciation. 5/x

That added with other matters creates losses to Trump. We actually allow losses to be carried into another year, because we tax business on their net income/profit. But we won't give a tax refund to a business if they have a loss. Instead, we make a compromise here. 6/x

So, to me, as a tax matter, that part is less of an issue. Of course, the bigger issue is why Trump has so many losses. It completely undermines his business acumen. 7/x

But other parts are far more troubling. 8/x

Take the special manor that he owns. One thing there is the use of these conservation easements. That allows a charitable deduction for land that you claim to put into conservation use and not develop. 9/x

This benefit though is often problematic. The IRS, as an agency, probably is not great at determining some of the issues regarding conservation matters. Traditionally, there have been numerous problems with this particular tax benefit. And I would say some of that is here. 10/x

That's a policy matter. Perhaps if the IRS worked with an agency that knew something about land use and conservation, it would lead to a better outcome here and less problematic uses. Alas, that is not the situation. 11/x

Even more troubling, related to the manor, is its use as what appears to be a vacation home when it is claimed as an investment property. The latter is a business use. 12/x

If it is a business use, you get to make things like depreciation deductions and the like. But if it is personal, you don't get any of that. 13/x

But the position here appears to be aggressive. At least, based on the reporting, the thing seems to be for personal use mainly. Of course, that is an issue for audit and potentially litigation. But the read is bad. 14/x

Indeed, one of the problems with family businesses or closely held entities is that there is often a melding of the lines between the business and the personal that can raise questions. To stop that you need to audit. 15/x

But as others, like @ProfAfield have pointed out, the IRS is resource starved. According to a report by @propublica, the IRS actually eliminated its group auditing Global High Wealth types. 16/x https://www.propublica.org/article/ultrawealthy-taxes-irs-internal-revenue-service-global-high-wealth-audits

Instead, the Service is auditing poorer people receiving the EITC. That's really problematic, because, in the words of a famous robber, that's not where the money is. 17/x

This line of business-personal arises too with regards to the things like the jets and the $70,000 haircut. This matter, imho, appears to be aggressive, and Tax Twitter has helpfully pointed to a Tax Court Memorandum Opinion saying as much. 18/x

Another big issue has to do with the abandonment loss that is at the heart of the big refund Trump got. Abandonment loss really requires you to abandon everything. 19/x

The fact that reporting said that Trump got something else makes it problematic to say the least. If he got anything out of the property that he abandoned, he should not get the loss, and thus not get the refund. 20/x

Another issue are the Ivanka payments. That creates problems too. 21/x

For me, one of the big questions is was the rate at arm's length, i.e. would a similarly situated person not in the family receive that much? I do not know, but I think not, especially given the type of work involved, mainly basic licensing deals. 22/x

Add to the fact that counterparties were unaware, and you have more problems there. Now, whether Ivanka got a tax benefit is questionable. If it were an outright gift, it would be tax free income to her, though potentially subject to gift/estate tax. 23/x

But to understand that fully, we would need to understand more about her entity and her taxes, and at least we do not have that yet. Though, my hunch is, there's might be something unusual there. 24/x

Finally, on penalties. I agree with @BDGesq regarding criminal sanctions. I think it's hard to get there without more information. 25/x

That said, civil penalties are available. I do not think we have enough information there to reach that. But having done civil penalties in areas like FBAR (foreign bank account reporting), the standards are different. 26/x

The idea of willfulness there is recklessness. If Trump knew or had reason to know about something, and made himself blind to it, then he could be liable for certain willful civil penalties, even though it would not be criminal 27/x

Those penalties could then be somewhat substantial. Those become additions to the tax, and interest is even charged on them too. 28/x

So, there's a lot going on, and we need more. But regardless, the optics are bad. $750 in federal income tax is not a good number. $70,000 haircuts always look bad (ask John Edwards) 29/x

And most troubling, not only is Trump potentially both a bad business person and super aggressive on taxes (and reveals our problems with lack of enforcement and a Code that gives a lot of benefits to the well-to-do). 30/x

He's in debt of about $400 million due in the next few years personally. That creates other risks that the National Security people have pointed out. 31/x

Mahalo for reading my long dumb thread! Go read people too like @vicfleischer, @DanielJHemel, @lilybatch, and others on tax twitter who know more than me!