Release of Trump tax returns could herald new era for taxpayer privacy

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Maddie McGarve / New York Times, File

Former President Donald Trump arrives to speak at a rally in Dayton, Ohio, on Nov. 7, 2022. Release of Donald Trump tax returns could herald a new era for taxpayer privacy; revealing private documents risks a tit for tat with Republicans set to retake control of the House of Representatives.

Tue, Dec 20, 2022 (2 a.m.)

WASHINGTON — As a presidential candidate in 2016, Donald Trump teased that the release of his tax returns was imminent, pointing to the scale and complexity of his wealth as a reason that he had so far bucked tradition by failing to release his financial information.

“I have very big returns, as you know, and I have everything all approved and very beautiful and we’ll be working that over in the next period of time,” Trump said on NBC’s “Meet the Press” at the time, adding, “This is not, like, a normal tax return.”

The tax returns never materialized. Over the next seven years, Trump first blamed an invasive Internal Revenue Service audit for his refusal to make his returns public and then, as president, waged an extended legal battle against House Democrats who sought to force their release.

Several years of tax return data obtained by The New York Times showed that Trump paid scant income taxes over the years and detailed the financial struggles of his properties, yet the full scope of his tax history remained shrouded in secrecy.

That could change this week. On Tuesday, the House Ways and Means Committee will vote to decide whether to make public six years of the former president’s tax records. That action comes after the Supreme Court last month declined to block the Treasury Department, which oversees the IRS, from releasing the returns to Congress. The decision paved the way for the returns to be transferred from the IRS to the Ways and Means Committee.

Now, in the days before they hand control of the House to Republicans, Democrats must decide exactly what to do with the documents.

The formal release of Trump’s tax records would represent both a significant act of transparency and what some fear is the end of an era of taxpayer privacy.

“If they get revealed, it seems to me they ought to have a pretty good reason for why that’s in the public interest,” said John Koskinen, who served as IRS commissioner in the Obama and Trump administrations. “It’s a dangerous precedent.”

Presidents are not required by law to release their tax returns, but for decades they have done so voluntarily to demonstrate to the American public that they have nothing to hide. It would also raise questions about whether, in this case, Democrats on the House committee created a pretext for using their power as a political weapon against an opponent.

For years, Democrats have been angling to access Trump’s returns, using various justifications for why lawmakers should be allowed to see private financial data. In 2017, when House Democrats were in the minority, Rep. Bill Pascrell Jr., D-N.J., asked his Republican colleagues to seek their release so the American public could better understand Trump’s financial ties to foreign governments and potential conflicts of interest. Republican lawmakers refused to comply.

When Democrats took control of the House of Representatives in 2019, they made accessing Trump’s returns a priority. They relied on a century-old provision in the tax code that gives congressional tax-writing committees the power to access private returns.

To demonstrate that there was a “legitimate legislative purpose” for the request, House Democrats sought the returns as part of an oversight inquiry into the effectiveness of a rule that requires the IRS to audit all presidential tax returns. Trump’s Treasury secretary, Steven T. Mnuchin, refused to turn the tax returns over and warned that the request from Democrats could come back to haunt them if Republicans decided someday to weaponize the IRS.

House Republicans are expected to make that argument Tuesday when they attempt to persuade Democrats not to release Trump’s records.

“Ways and Means Democrats are unleashing a dangerous new political weapon that reaches far beyond President Trump and jeopardizes the privacy of every American,” Rep. Kevin Brady of Texas, the top Republican on the Ways and Means Committee, said in a statement. “Going forward, partisans in Congress have nearly unlimited power to target political enemies by obtaining and making public their private tax returns to embarrass and destroy them.”

As lawmakers debate the information’s release, Republicans are expected to argue that Democrats used oversight as a cover for their true desire to reveal the returns for political gain and contend that assessing the presidential review process does not require a dump of Trump’s private documents.

But Democrats are expected to counter that the tax documents were essential for their review into the effectiveness of the IRS audit program that automatically reviews the tax returns of any elected president and vice president.

They have insisted all along that their quest to obtain Trump’s tax returns was not an attempt to tarnish the former president. The rush to publicize them before Republicans retake control of the House next year, they argue, is the result of years of stalling by Trump.

“This rises above politics, and the committee will now conduct the oversight that we’ve sought for the last 3 1/2 years,” Rep. Richard E. Neal of Massachusetts, the Democratic chair of the committee, said when the Supreme Court allowed the release last month.

The Ways and Means Committee will meet Tuesday afternoon and is expected to vote on whether to release data from Trump’s tax returns from 2015 to 2020 and to potentially share the filings. It is not clear what new information will be gleaned, though Democrats and tax experts will be combing through the returns to determine what kinds of strategies Trump employed to lower his tax bills and whether he benefited from tax policies that he championed as president.

Days after Republicans passed a $1.5 trillion tax cut in 2017, Trump told wealthy friends at his Palm Beach, Florida, resort, “You all just got a lot richer.”

The tax returns could shed light on whether Trump did, too.

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It is not without precedent for Congress to use its power to release taxpayer information.

A tax committee released a bipartisan staff report describing and analyzing President Richard Nixon’s tax returns in 1974 based on data it had requested under an earlier version of Section 6103, the part of the tax code that dictates when and how taxpayer information can be released by the IRS.

Republicans have also wielded their power to unlock tax records. In 2014, House Republicans led by the chairman of the Ways and Means Committee, Dave Camp, R-Mich., voted to release confidential tax information in urging the Justice Department to investigate their allegations that an IRS official had discriminated against conservative groups in deciding which organizations to scrutinize.

This article originally appeared in The New York Times.

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