How Trump’s Tax Returns Could Become Public

(Bloomberg) -- Though candidates for the U.S. presidency aren’t required by law to show voters their tax returns, they almost always do so as a gesture of transparency. Donald Trump is a rare exception. During his campaign, and in more than three years as president, he has declined to make public his tax documents. Opposition Democrats, who took control of the U.S. House of Representatives in January 2019, want to use their power to get them. The U.S. Supreme Court is next to weigh in.

1. Why hasn’t Trump released his tax returns?

His most consistent explanation has been that, at the advice of his lawyers, he won’t do so while they are being audited by the Internal Revenue Service -- and he says he has been audited constantly since 2004. On other occasions, he’s also said that there’s “nothing to learn from” his returns, that they are “extremely complex” so people “wouldn’t understand them,” and that Americans who aren’t reporters don’t “care at all” about what’s in them. No law prevents him from releasing returns being audited by the IRS.

2. Why is the IRS auditing his tax returns?

For the years before he became president, there’s no way to know -- or even to confirm that his returns really are under active audit. It’s true that an audit, once begun by the IRS, can take several years to complete, particularly for wealthy individuals like Trump with stakes in many business entities. So Trump could easily be under audit for the remainder of his presidency. As for Trump’s tax returns since 2017, all presidents and vice presidents are supposed to be audited annually during the years they are in office, but those audits are completed relatively quickly. And House Democrats are questioning whether those mandatory audits are being carried out free of political interference.

3. Is he the only president not to share tax returns?

Over the last four decades, only Gerald Ford -- who became president in 1974, then ran unsuccessfully for a full term in 1976 -- also refused to release at least one of his annual tax returns, choosing instead to offer the public a summary of his tax data. Other presidents and presidential nominees have released one year’s worth (Republican Ronald Reagan) to 33 years’ worth (Republican Jeb Bush) of returns for the public to review.

4. What’s so interesting about Trump’s tax returns?

His unwillingness to release the documents has heightened speculation about what information about loans, business ties or his wealth they could contain. There have been questions about what if any financial dealings he’s had with Russia, what conflicts of interest his business and political roles might pose, how philanthropic he is, how much he might benefit from the tax-cut plan he signed and, perhaps most directly, how much or how little he’s paid in taxes. The New York Times reported in 2018 that Trump “participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents.” It’s by no means certain that Trump’s personal returns would answer any of those questions.

5. How has Trump responded?

His administration has resisted all requests for his financial records, and his lawyers brought their objections all the way to the Supreme Court. Trump is counting on the court’s conservative majority to block, or at least delay, those records from being turned over.

6. What is the Supreme Court considering?

The high court heard arguments on Trump’s efforts to block his banks and accountants from complying with subpoenas they have received. In one case, two House committees are trying to get information from Trump’s accountants, Mazars USA, and his bankers, Deutsche Bank AG and Capital One Financial Corp. In the other, Manhattan District Attorney Cyrus Vance Jr.’s office is seeking Trump’s returns for an investigation into whether his company falsified business records related to hush-money payments to adult film star Stormy Daniels and former Playboy model Karen McDougal, who say they had affairs with Trump before he became president.

7. Who else is seeking the tax returns?

The chairman of the House Ways and Means Committee, Democrat Richard Neal, requested six years’ worth of Trump’s returns from the IRS, citing a 1924 law that allows the chairmen of three tax committees in Congress to ask the U.S. Treasury secretary for the returns of any taxpayer. Should it get the returns, Neal’s committee could vote to release them or a summary of their findings to all 435 members of the House, effectively making the information public. That case is on hold, likely pushing a decision until after the November election, pending a ruling on Congress’s ability to sue to enforce a subpoena.

The Reference Shelf

• Peruse tax returns of presidents and presidential candidates at the website of the Tax History Project.
• Trump’s audit explanation goes all the way back to February 2016.
• The IRS commissioner, while in private practice, endorsed Trump’s decision to lay low while being audited.
• From Tax Notes, an article on Congress’s authority to obtain and release tax returns.

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