Series: The Secret IRS Files Inside the Tax Records of the .001% ProPublica is a nonprofit newsroom that investigates abuses of power. The Secret IRS Files is an ongoing reporting project. Sign up to be notified when the next story publishes. Or text “IRS” to 917-746-1447 to get the next story texted to you (standard messaging rates apply). Also: Do you have expertise in tax law, accounting or wealth management? We’d love to hear from you. Here’s a tale of two Stephen Rosses. Real life Stephen Ross, who founded Related Companies, a global firm best known for developing the Time Warner Center and Hudson Yards in Manhattan, was a massive winner between 2008 and 2017. He became the second-wealthiest real estate titan in America, almost doubling his net worth over those years, according to Forbes Magazine’s annual list, by adding $3 billion to his fortune. His assets included a penthouse apartment overlooking Central Park and the Miami Dolphins football team. ProPublica Get Our Top Investigations Subscribe to the Big Story newsletter. Thanks for signing up. If you like our stories, mind sharing this with a friend? https://www.propublica.org/newsletters/the-big-story?source=www.propublica.org&placement=share®ion=national Copy link For more ways to keep up, be sure to check out the rest of our newsletters. See All Fact-based, independent journalism is needed now more than ever. Donate Then there’s the other Stephen Ross, the big loser. That’s the one depicted on his tax returns. Though the developer brought in some $1.5 billion in income from 2008 to 2017, he reported even more — nearly $2 billion — in losses. And because he reported negative income, he didn’t pay a nickel in federal income taxes over those 10 years. What enables this dual identity? The upside-down tax world of the ultrawealthy. ProPublica’s analysis of more than 15 years of secret tax data for thousands of the wealthiest Americans shows that Ross is one of a special breed. He is among a subset of the ultrarich who take advantage of owning businesses that generate enormous tax deductions that then flow through to their personal tax returns. Many of them are in commercial real estate or oil and gas, industries that have been granted unusual advantages in the American tax code, which allow the ultrawealthy to take tax losses even on profitable enterprises. Manhattan apartment towers that are soaring in value can be turned into sinkholes for tax purposes. A massively profitable natural gas pipeline company can churn out Texas-sized write-offs for its billionaire owner. ProPublica Read More How These Ultrawealthy Politicians Avoided Paying Taxes By being able to generate losses — effectively, by being the biggest losers — these Americans are the most effective income-tax avoiders among the ultrawealthy, ProPublica’s analysis of tax data found. While ProPublica has shown that some of the country’s absolute wealthiest people, including Jeff Bezos, Elon Musk and Michael Bloomberg, occasionally sidestep federal income tax entirely, this group does it year in and year out. Take Silicon Valley real estate mogul Jay Paul, who hauled in $354 million between 2007 and 2018. According to Forbes, he vaulted into the ranks of the multibillionaires in those years. Yet Paul paid taxes in only one of those years, thanks to losses of over $700 million. Then there’s Texas wildcatter Trevor Rees-Jones, who built Chief Oil & Gas into a major natural gas producer over the past two decades. The multibillionaire reported a total of $1.4 billion in income from 2013 to 2018, but offset that with even greater losses. He paid no federal income taxes in four of those six years. None of the people mentioned in this article would discuss their taxes or tax-avoidance techniques with ProPublica. A spokesperson for Ross declined to accept questions. In a statement, he said, “Stephen Ross has always followed the tax law. His returns — which were illegally obtained and descriptions of which were released by ProPublica — are reflective of and in accordance with federal tax policy. It should terrify every American that their information is not safe with the government and that media will act illegally in disseminating it. We will have no further correspondence with you as we believe this is an illegal act.” (As ProPublica has explained, the organization believes its actions are legal and protected by the Constitution.) A spokesman for Rees-Jones declined to comment. Paul did not respond to repeated requests for comment. These Magnates Didn’t Pay Federal Income Taxes, Some for as Long as a Decade They took in huge sums, but their paper losses often tipped their incomes deeply into the red. Source: Forbes wealth estimates and ProPublica analysis of IRS data. “Income Tax” excludes payroll and other nonincome taxes, as defined by the IRS. “Reported Income” refers to adjusted gross income. These values are the lowest in ProPublica’s trove of IRS data. Former President Donal . . . read the full article here.