Trump tax revelation punctuates week of political challenges

NEW YORK (AP) — Ever defiant, Donald Trump and his Republican allies embraced a report on Sunday that said the New York businessman may not have paid federal income taxes for nearly two decades after he and his companies lost nearly $916 million in a single year.

The unexpected revelation punctuated a week of missteps and aggressive personal attacks from the Republican presidential contender, with early voting already underway in some states and Election Day quickly approaching.

If there was a bright spot to the explosive story about his taxes in The New York Times, Trump supporters said, it was that it may shift the national conversation away from Trump’s weeklong feud with a former beauty queen he called “Miss Piggy” as he shamed her for gaining weight, and his unfounded suggestion Hillary Clinton may have cheated on her husband.

“He’s not been on message,” said Barry Bennett, a former Trump adviser. “A week was wasted where he could have been talking about the heroin epidemic and jobs and ISIS. All the money in the world can’t get that time back.”

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The mounting challenges injected a new sense of urgency into Trump’s White House bid with the next presidential debate a week away.

Trump is deciding whether to use the debate stage to attack Clinton’s role in the infidelities of her husband, former President Bill Clinton’s. That’s according to a person with intimate knowledge of Trump’s thinking as his senior advisers huddled Sunday for a rare session of debate preparation. The person was not authorized to discuss publicly the private conversations and spoke on condition of anonymity.

Publicly, however, Trump’s team was aggressively defiant on Sunday.

Neither New Jersey Gov. Chris Christie nor former New York City Mayor Rudy Giuliani, both top Trump supporters, disputed the report that said Trump’s loss in 1995 was big enough that he could have legally avoided paying taxes for as many as 18 years.

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On “Fox News Sunday,” Christie declared it “a very, very good story for Donald Trump.” Giuliani called him “a genius at how to take advantage of legal remedies that can help your company survive and grow” on ABC’s “This Week.”

“Don’t you think a man who has this kind of economic genius is a lot better for the United States than a woman? And the only thing she’s ever produced is a lot of work for the FBI checking out her emails,” Giuliani said.

The Trump did not appear publicly on Sunday, but weighed in on social media, saying he was singularly qualified to fix the nation’s tax system.

“I know our complex tax laws better than anyone who has ever run for president and am the only one who can fix them,” Trump tweeted.

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Clinton made no mention of Trump’s taxes during her events in North Carolina on Sunday. But the Democratic presidential nominee reposted a tweet from Trump, who wrote in 2012 that “HALF of Americans don’t pay income tax despite crippling govt debt…”

“Now that’s pretty rich coming from a guy who paid $0 in taxes for 18 years,” Clinton tweeted.

Before The Times story put Trump’s taxes back at the center of the campaign, the candidate and his backers were engrossed in an effort to change the subject from his feud with 1996 Miss Universe, Alicia Machado, and his middle-of-the-night tweets that directed voters to what he called her “sex tape.”

The online taunts referred to footage from a Spanish reality show in 2005 in which Machado was a contestant and appeared on camera in bed with a male contestant. The images are grainy and do not include nudity, though Machado later acknowledged that she was having sex in the video.

On Saturday night in Manheim, Pennsylvania, Trump imitated Clinton’s stumbles as she left this year’s 9/11 memorial service ill with pneumonia and questioned her loyalty to her husband, former President Bill Clinton.

“Why should she be, right?” he asked. “Why should she be?”

In a story published online late Saturday, The Times said it anonymously received the first pages of Trump’s 1995 state income tax filings in New York, New Jersey and Connecticut. The filings show a net loss of $915,729,293 in federal taxable income for the year.

That Trump was losing money during the early to mid-1990s — a period marked by bankruptcies and poor business decisions — was already well established.

But the records obtained by the Times show losses of such a magnitude that they potentially allowed Trump to avoid paying taxes for years, possibly until the end of the last decade.

His campaign said that Trump had paid “hundreds of millions” of dollars in other kinds of taxes over the years.

Trump has refused to release his tax returns, breaking with four decades of presidential campaign tradition. Trump has said his attorneys are advising him to keep his tax returns private until a government audit is completed.

IRS Commissioner John Koskinen told a House committee Sept. 21 that people under IRS audit are free to release their returns, or IRS letters informing a person they’re being audited.

Trump has done neither. Clinton has publicly released nearly 40 years’ worth, and Trump’s running mate, Indiana Gov. Mike Pence, has released 10 years of his tax returns.

Kellman reported from Washington. Associated Press writers Jeff Horwitz in Washington and Ken Thomas in Charlotte, North Carolina, contributed to this report.