For almost ten years, President Donald Trump‘s tax returns have been the “white whale” of American political journalism. They are a closely guarded secret that has survived audits, subpoenas, and endless speculation.
Critics have long suspected that the papers hide inflated assets or foreign ties, but a new, much darker theory has emerged from the President’s inner circle. Michael Wolff, a journalist who has written more about the Trump era than anyone else, says the secrecy might be tied to a “horrifying” financial magic trick by the late, disgraced financier Jeffrey Epstein.
Wolff, who has written four books about Donald Trump’s presidency, talked about this supposed conspiracy on a recent episode of The Daily Beast‘s podcast, “Inside Trump’s Head.”
Wolff told co-host and Daily Beast Chief Content Officer Joanna Coles that the relationship between Trump and Epstein wasn’t just social; it was also transactional, based on a desperate need to stay alive during the President’s most dangerous financial hour.
The story begins in the early 1990s, when Trump’s reputation as a great builder was falling apart because of bad investments. Wolff recalled that Trump was “long over his skis” with failed businesses like the short-lived Trump Airline, which led him to take on more than $1 billion in debt. He was about to lose everything.
Wolff said, “His situation was so extreme that, effectively, the banks had to agree to take a bath on this.” He added, “They said, ‘We are going to forgive you these debts.'” That part of the story is totally unclear, but they did forgive him debts of up to $1 billion.
But in the world of high finance, a lifeline can quickly turn into a noose. Forgiven debt is usually seen as taxable income under U.S. tax law. The IRS considers a billion dollars in debt that a bank wipes away as a billion dollars earned, which means the debtor has to pay a huge tax bill.
“The problem there, though, is when the banks forgive you your debts, that becomes income,” Wolff continued. “You have to pay taxes on it, in theory.”
Wolff says that this is when Epstein got involved. The financier, known for being secretive about his money and for having a strict view of the law, is said to have offered Donald Trump a radical and probably illegal solution.
Epstein is said to have told Trump that the money from the debt forgiveness didn’t count as real income because it never actually went into his bank account.
Wolff said that it was “Epstein chortling his claim” as he took credit for the move. “He was the one who told Trump that, actually, none of this was because of the nature, the nature of this, you really haven’t gotten the money. It has never come in as income.”
Epstein believed “forgiveness sort of exists, in a different order of ether, unknown to the IRS,” which meant “you just don’t have to pay it.”
Wolff says that Epstein would “maintain” that this particular act of tax evasion was “one of the key reasons that we’ve never, to this day, seen Donald Trump’s tax returns.”
The implication left Coles speechless during the broadcast. She asked, “How is it possible that we haven’t seen his tax returns?” as she thought about how big the claim was. “It’s horrifying. It’s horrifying, and it’s fascinating.”
If this is true, the story says that the President’s tax returns are not hidden to protect his wealth, but to hide a crime that happened decades ago—a financial skeleton key given to him by a man whose name is now synonymous with corruption.
