'It's fascinating': Author reveals 'horrifying' reason why Trump's taxes remain secret

President Donald Trump and disgraced financier Jeffrey Epstein were in some shady business deals together, and one incident may hold the key to understanding why the president has never publicly released his tax returns, according to one Trump expert.

Unlike his predecessors, Trump has never publicly released his tax returns. He has claimed that they were being audited and used other excuses to delay their release. To journalist Michael Wolff, who has written four books about Trump, these actions were par for the course for the president, and he suggested that one deal in particular may have a lot to do with it.

Wolff discussed the deal on The Daily Beat's podcast, "Inside Trump's Head," which he co-hosts with the outlet's Chief Content Officer, Joana Coles.

In the early 1990s, Trump was long over his skis on a couple of investments, including the short-lived Trump Airline, Wolff recalled. At one point, he racked up more than $1 billion in debt.

Epstein then helped Trump finagle a deal with the banks to forgive his loans, and then found a way to avoid paying taxes on top of it all, he added.

"His situation was so extreme that, effectively, the banks had to agree to take a bath on this. They said, 'We are going to forgive you these debts,'" Wolff said. "That part of the story is totally unclear, but they forgave him these debts of up to $1 billion."

"The problem there, though, is when the banks forgive you your debts, that becomes income. You have to pay taxes on it, in theory," Wolff continued.

That was when Epstein came up with an idea to help Trump avoid his tax bill, Wolff said.

"And it was, again, Epstein chortling his claim, that 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," he continued. "And forgiveness sort of exists, in a different order of ether, unknown to the IRS, you just don't have to pay it, which Epstein would then come to later maintain was one of the key reasons that we've never, to this day, seen Donald Trump's tax returns."

Coles looked shocked by the story.

"How is it possible that we haven't seen his tax returns?" she asked. "It's horrifying. It's horrifying, and it's fascinating."