The White House has denounced the Times report, with press secretary Sarah Huckabee Sanders calling it “a misleading attack against the Trump family." | AP Photo/Evan Vucci Taxes Trump unlikely to face consequences despite allegations of tax dodging

President Donald Trump is unlikely to pay a legal or financial price even if new allegations of extensive tax dodging by him and his family are borne out.

Multiple factors could offer Trump a shield, not the least of which is time: The questionable practices outlined in a New York Times report happened so long ago that a case would be difficult to make today, especially given statutes of limitations.


“It’s certainly possible, although the age of these transactions raises some questions about whether any of it will be collectible,” said Beth Shapiro Kaufman, a former Treasury Department tax official who is now president of the law firm Caplin & Drysdale.

Nonetheless, New York state officials are probing the tax practices of Trump and his family following the report, published Tuesday. The Department of Taxation and Finance, which is responsible for investigating tax fraud, can collect fines and penalties and also refer criminal actions to the attorney general's office.

The White House has denounced the Times report, with press secretary Sarah Huckabee Sanders calling it “a misleading attack against the Trump family by the failing New York Times.”

Statutes of limitations raise barriers to criminal liability for the numerous schemes the Times said Trump and his family undertook in the 1990s to save millions of dollars in taxes, including avoiding gift taxes and taking allegedly inappropriate write-offs. The government would have to demonstrate fraud to escape statutes of limitations.

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The Times bluntly accused Trump of “instances of outright fraud,” but prosecutors face a high standard to prove that.

Proving criminal fraud would be “exceedingly unlikely,” said Mark Matthews, a former IRS deputy commissioner who was responsible for the agency’s Criminal Investigation Division.

Although conspiracies can continue for years, Trump would need to have committed “a constant pattern of overt acts and obstruction-like behavior up until much closer to the present,” said Matthews, now at Caplin & Drysdale.

It’s not as hard to reach back to prove civil fraud. But there are limits on that, too. If Trump inherited undervalued assets, as the Times report alleged, he wouldn’t be liable for underpayment of gift taxes because the tax liability falls on the donor — his father, Fred Trump, who died in 1999.

“If taxes were not paid, it was by the president's father, now long dead,” said Harvard Law School visiting professor Howard Abrams, a corporate tax specialist.

The Times investigation — based on thousands of documents the newspaper obtained, including more than 200 tax returns filed by Fred Trump — says Donald Trump received from his father at least $413 million in today's dollars, and that Trump and his siblings helped their parents dodge taxes by setting up a “sham corporation,” taking improper tax deductions, undervaluing their real estate holdings and taking other dubious measures.

IRS officials previously examined Fred Trump’s estate, as well as that of his wife, Mary Trump, Donald Trump’s mother. Adjustments were made and the cases were closed, and it is difficult to reopen them.

Undervaluation charges can be hard to prove given that wealthy taxpayers hire lawyers and other professionals who are expert in tax law and just how far it can be pushed. Good-faith reliance on professional advice is a viable defense, assuming there was no collusion or true intent to undervalue property.

“To the extent that they did rely in good faith on competent advisers, provided full and accurate information to those advisers in order to get opinions or advice, and then acted in accordance with that advice, the taxpayers would have a viable reliance defense,” said Caroline Ciraolo, former acting assistant attorney general of the Justice Department’s Tax Division and now a partner with Kostelanetz & Fink.

The allegations in the Times report also expose IRS limitations in grasping how the money flowed. It’s easy to set up corporations and move money between them to escape detection, said Michael Sullivan, a former IRS agent and a founder of Fresh Start Tax LLC.

“That’s what people rely on, the IRS not connecting the dots,” he said.

It’s difficult to say what other revelations may come out about Trump’s taxes. He has broken with decades of precedent by refusing to release his tax returns, but Democrats are vowing to get their hands on them if they take over the House in the midterm elections.

Marie J. French and Quint Forgey contributed to this report.