This week, in an unsigned order with no dissents, the U.S. Supreme Court finally allowed the U.S. Treasury to deliver six years’ worth of former President Donald Trump’s tax returns to the House Ways and Means Committee. Declining to give a hearing to the former president’s arguments, the high court let stand a lower court’s ruling that the committee has the right to see the tax returns of the president and eight of his companies.
The request lingered in a federal court in Washington, D.C., until Trump was replaced by President Joe Biden, the Department of Justice reversed its legal position, and Ways and Means Committee chair, Rep. Richard Neal, D-Mass., sent a second request to the Treasury Department in 2021.
This is clearly a legal victory for lawmakers, but one might be forgiven for wondering what the point of this massive effort is.
This is clearly a legal victory for lawmakers, but one might be forgiven for wondering what the point of this massive effort is, since the Manhattan district attorney has already obtained many tax returns and related documents for Trump and his organizations. These documents were procured from Mazar’s — the accounting firm that prepared Trump’s tax returns but later disavowed their accuracy — and have already been used to extract a guilty plea from Trump Organization CFO Alan Weisselberg and bring the company to trial. Letitia James, the New York attorney general, also has years of tax returns, and has brought a civil case based largely on them. Federal prosecutors in the Southern District of New York undoubtedly have them as well.
But while Trump’s long legal wrangling delayed the production of documents to Neal’s committee, it has also created two more perils for Trump.
First, the updated House request to the Treasury Department in 2021 calls for more recent tax returns, this time for tax years 2015-2020. These returns cover Trump’s entire presidency, meaning that the House will get a full look at whether Trump or his companies may have run afoul of the Emoluments Clause. That’s the clause of the Constitution which prohibits federal officeholders from receiving gifts, payments or things of value from leaders or representatives of foreign countries (and because this is a constitutional prohibition, Trump cannot argue that it does not apply to a president).
Second, the opinion from the highly regarded D.C. Court of Appeals has now confirmed that the legal bar that congressional tax committees must clear to access a former president’s (and even a sitting president’s) tax returns is fairly low.
Now, Trump must live with the possibility that any or all of his tax records may become public — a scenario he seems to have feared ever since he first began running for public office. Tax returns in the hands of a congressional committee are not the same as tax returns in the hands of a prosecutor. Government prosecutors can obtain, but not disclose, the contents of tax returns — unless, that is, it becomes necessary to introduce relevant portions of the returns into evidence. The House Ways and Means Committee, however, is not so constrained. If it decides that taxpayer information should be conveyed to the full House or Senate, or a referral made to the Department of Justice, the committee can make the contents of those communications — including the taxpayer information — public.
There is a long and elaborate history as to why taxpayer information is considered so private in the United States. During the Civil War, public notices were posted and published in newspapers, describing which taxpayers owed how much income tax. But after that tax law lapsed, concerns about taxpayer privacy became a constant theme, primarily for two reasons: first, that politicians would use taxpayer information to persecute their political opponents, and second, that taxpayers, worried about disclosure, would not be truthful in their tax returns.
As a result, even as the ability of the federal government to levy taxes was explicitly authorized by the Sixteenth Amendment in 1913, the government’s power to tax has always been wedded to the nondisclosure of personal tax information. (In fact, citing privacy regulations, the IRS will not even allow a taxpayer to see phony tax returns filed in the name of that taxpayer, where the crook has claimed the taxpayer’s refund).
After evidence came to light that President Richard Nixon had used taxpayer information to target political opponents, legislation was enacted in 1976 that severely restricted a president’s ability to disclose taxpayer information. But the constraints on congressional committees are less strict, and much is left to the discretion of the committees.
Indeed, with respect to Trump’s tax returns, the House argument that prevailed in the courts was that the Ways and Means Committee needs Trump’s tax information in order to fulfill its responsibility funding and overseeing the presidential audit program. Under this program, the IRS automatically audits every president’s tax returns, thus relieving the agency from having to decide which chief executive to audit. Chairman Neal’s request to Treasury noted that Trump’s tax returns were “inordinately large and complex,” requiring an examination by the committee to make sure the IRS was not being intimidated and was properly resourced. This stated reason, the lower courts ruled, was sufficient on its face to overcome Trump’s argument that the request for his returns was politically motivated.
To be clear, just because the Ways and Means Committee can make Trump’s tax information public doesn’t mean it will, and whether the committee ultimately makes any of the materials public is anyone’s guess. Federal district judge Trevor McFadden, a 2017 Trump appointee to the court, ordered the Treasury Department to turn the materials over to the Ways and Means Committee, noting that “[i]t might not be right or wise to publish the returns, but it is the Chairman’s right to do so.” But he also cautioned the committee that “[a]nyone can see that publishing confidential tax information of a political rival is the type of move that will return to plague the inventor.” In other words, what’s good for the goose is good for the gander.
That’s true. But just having the tax returns in the committee’s hands must be sobering for someone like Trump, who, having boasted that he made hundreds of millions of dollars, paid no federal income taxes in 10 of the 15 years before being elected president. It is also true that even if the House abandons its review because Republicans will soon gain control of its committees, Trump’s tax returns can also be requested by the Senate Committee on Finance, which will continue to be under Democratic control. Thus, public or not, Trump’s tax information may in the future serve as a polygraph in the room, its content a measure of the truth of the former president’s words.
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