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 personal disclosure. Donald Trump is a rare exception. During his campaign, and in almost two years as president, he has declined to show the public his tax documents. Now opposition Democrats, who will take control of the U.S. House in January, may be able to use their new power to get them.
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 that 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 returns he filed in the years before becoming president, there’s no way to know that -- 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. (All presidents and vice presidents are audited annually during the years they are in office, but those audits are completed relatively quickly.)
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 are 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 Trump might benefit from the tax-cut plan he signed and, perhaps most directly, how much or how little he’s paid in taxes. (Glimpses into leaked tax information obtained by the New York Times showed Trump claimed operating losses of $916 million in 1995, which would have protected him for up to 18 years’ worth of taxes.) It’s by no means certain that Trump’s personal returns would answer any of those questions.
5. How might Trump be forced to release his returns?
Congressman Richard Neal, a Massachusetts Democrat, will rise to chairman of the House Ways and Means Committee when the next Congress convenes on Jan. 3. As chairman, he can use a 1924 law to ask the U.S. Treasury secretary for the returns of any taxpayer -- including the president. (The Republicans who have controlled Congress thus far during the Trump presidency had this same power but showed no interest in using it.) Neal has said he plans to make this request, pending discussions with his aides on the legal procedures to do so. With the returns in hand, the committee could then vote to release them -- or a summary of their findings -- to all 435 members of the House. That would effectively make the information contained in the returns, if not the returns themselves, public.
6. Would there be a fight?
Count on it. Republicans are prepared to say that Neal’s request is a political witch hunt, rather than legitimate government oversight. Treasury Secretary Steven Mnuchin could ask the Democrats to re-submit any request with a stronger argument. Or Mnuchin could slow-walk the release of documents. Democrats are likely to sue if there is a delay, raising the prospect of a protracted legal battle that could potentially drag on to or even after the 2020 presidential election.
7. What does Trump say?
After Democrats won enough House seats to take control, Trump reiterated that he might consider releasing his tax returns -- but only after the audit is concluded. "Nobody turns over a return when it’s under audit,” he said.
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 new IRS commissioner, while in private practice, endorsed Trump’s decision to lay low while being audited.
- Bloomberg Businessweek on congressional committees to watch in 2019.
- From Tax Notes, an article on Congress’s authority to obtain and release tax returns.
©2018 Bloomberg L.P.