Trump keeps calling $750 tax payment a 'filing fee.' Experts say there's no such thing

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Trump keeps calling $750 tax payment a 'filing fee.' Experts say there's no such thing

Show Caption Hide Caption President Trump's tax return details revealed in New York Times series President Trump paid little to no federal income taxes in recent years, according to the first series of New York Times stories on his tax returns.

President Donald Trump has repeatedly called a $750 payment relating to his taxes merely a "filing fee."

The GOP president brought up the fee during an Oct. 15 town hall on NBC. And he said it again during the final presidential debate on Thursday night.

During the debate on Oct. 22, Trump said he prepaid tens of millions of dollars, which he learned from his accountants, and reiterated that the $750 paid in 2016 and again paid in 2017 was a filing fee.

But what in the world could Trump's reference to a filing fee for income taxes possibly mean?

Last I checked, the only money that comes out of my pocket relating to income taxes involves what we pay Bob our tax guy to prepare the returns and what we might owe in state or federal income taxes. (And yes, we have taxes withheld from our paychecks during the year, too.)

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Many people pay for tax software. Many owe money at the regular filing deadline of April 15. But a special fee relating to filing their tax returns? Who ever paid that one?

How did that $750 pop into the conversation?

The $750 first came into play after The New York Times' blockbuster story on Sept. 28 noted that Trump paid "$750 in federal income taxes the year he won the presidency. In his first year in the White House, he paid another $750."

It does seem strange that Trump would pay the exact same amount for two years in a row. Again, how often has that happened with your taxes? Maybe then, this idea of a fee could sound credible, but it's really not.

Even the tax experts are scratching their heads about Trump's dodge in wording.

"The notion that there is a $750 tax return filing fee is nothing but nonsense and demonstrates ignorance to the fact that millions of American households would be unable to afford such a fee," said Lisa De Simone, associate professor of accounting at the McCombs School of Business at the University of Texas at Austin.

Admittedly, we've not seen the Trump tax returns. The New York Times said it "obtained tax return data over more than two decades." The data, according to the report, did not include Trump's personal tax returns for 2018 or 2019.

"As best as I can tell based on what’s been published," De Simone said, "the $750 is the difference between the amount of alternative minimum taxes he owed and a carryforward for a general business credit."

She refers to Form 3800 for 2016 or 2017, the rules before the Tax Cuts and Jobs Act went into effect on 2018 returns, and the instructions relating to limitations to the allowable general business credit carryforward.

"Without digging in, and without actually seeing his filed Form 3800, nothing obvious jumps out. But my hunch is that he’s tripping a limitation to the amount of the general business credit carryforward he’s allowed to take against AMT, leaving just $750 in taxes owed," De Simone said.

What kind of filing fee could this be?

Others agreed that this reference to an IRS filing fee, which somehow isn't what someone paid for taxes, sounds incredibly strange.

James O’Rilley, CPA and tax director for Doeren Mayhew in Troy, said: "No such thing exists that I’m aware of."

George W. Smith, a CPA with Andrews Hooper Pavlik in Southfield, agreed and said: "No, there isn’t a filing fee with the IRS."

James Hines Jr., a University of Michigan professor of law and economics, said: "You do not have to pay the IRS a fee to file your tax return. You do have to pay your taxes, however."

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Hines, who is the research director of the Office of Tax Policy Research in the U-M's Stephen M. Ross School of Business, said there are "what the IRS calls 'user fees' to which 'filing fee' could conceivably refer."

"User fees are charges that the IRS imposes for certain services to taxpayers, such as resolving certain tax questions before the taxpayer's return is filed. This costs the IRS resources, so they charge the taxpayer," Hines said.

He noted that the user fee is "not exactly a filing fee, but it's understandable that someone might call it a filing fee."

Even so, he said, $750 would be "a very small user fee, so if that's what it is, it's for something quite minor."

Hines said it seems that the New York Times is claiming that Trump's tax return showed that $750 was owed in income on those two returns. "And if so, a user fee should not appear on that line," he said.

"The short answer to your question is no. There is no filing fee for a personal tax return," Hines said.

Why did Trump bring up the Tea Party?

Oddly enough, the IRS does have a user fee of $600 for Form 1023. But that fee is associated with applying for "tax-exempt status" and it is filed by nonprofits.

Again, Trump wouldn't be paying that fee for his personal income taxes, but such a fee could be familiar to others in his fan base. The president seemed to be insinuating that he was being targeted just like the Tea Party.

During Thursday's presidential debate, Trump said: "I get treated worse than the Tea Party" by the IRS.

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Tax exempt status is a hot political potato with some conservative groups. Tea Party groups went head-to-head with the IRS almost a decade ago, charging that they were targeted during the Obama administration based on their conservative viewpoints.

The IRS ultimately agreed to pay $3.5 million to groups that were wronged and make changes to avoid political targeting. In 2018, the groups could apply for financial compensation.

Trump has not released his any of his tax returns, of course, noting that he's still in an audit. So we're really not getting a straight answer or a complete picture. But as for a $750 fee, I'm not buying it.

Contact Susan Tompor via [email protected]. Follow her on Twitter @tompor.

Elliott2 on October 26th, 2020 at 19:33 UTC »

so.. he paid no tax?

Agolf_Lincler on October 26th, 2020 at 19:01 UTC »

Let's be fair honest here...this fucker doesn't have the faintest idea how to files his taxes, how to do his taxes, or probably whats even in his taxes.

mces97 on October 26th, 2020 at 18:58 UTC »

He could release his taxes. The part that says this is what I paid in federal taxes. Doesn't matter if he's got 1000 pages of returns. There's a specific spot, 1 line that he could release. Audit or no audit.