Release of Trump Tax Returns Could Herald New Era for Taxpayer Privacy
WASHINGTON — As a presidential candidate in 2016, Donald J. 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,” Mr. 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, Mr. 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 Mr. 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 hold a 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 I.R.S., from releasing the returns to Congress. The decision paved the way for the returns to be transferred from the I.R.S. 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 Mr. 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. 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.
What to Know About Donald Trump Today
Donald J. Trump is running for president again, while also being investigated by a special counsel. And he’s back on Twitter. Here’s what to know about some of the latest developments involving the former president:
Criminal referrals. The House committee investigating the Jan. 6 attack on the Capitol accused Mr. Trump of inciting insurrection and other federal crimes as it referred him to the Justice Department for potential prosecution. The action is the coda to the committee’s 18-month investigation into Mr. Trump’s effort to overturn the 2020 election.
Taxes. A House committee is expected to vote on Dec. 20 on whether to make public Mr. Trump’s tax records from 2015 to 2020. The decision to release the data would be a significant act of transparency in the waning days of Democratic control of the House. The panel obtained the information from the Treasury Department last month.
Trading cards. In his first significant public move since opening his 2024 presidential campaign, Mr. Trump announced an online store to sell $99 digital trading cards that depict the former president as a superhero, an astronaut and a series of other characters. Money from sales will go directly to him instead of his campaign.
“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 I.R.S. 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.
For years, Democrats have been angling for access to Mr. 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, Representative Bill Pascrell Jr., a New Jersey Democrat, asked his Republican colleagues to seek their release so the American public could better understand Mr. Trump’s financial ties to foreign governments and potential conflicts of interest. Republican lawmakers refused to comply.
When the Democrats took control of the House of Representatives in 2019, they made getting access to Mr. 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 review 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 I.R.S. to audit all presidential tax returns. Mr. 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 I.R.S.
House Republicans are expected to make that argument on Tuesday when they attempt to persuade Democrats not to release Mr. 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,” Representative 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.”
He added: “This is not limited to public officials, but can target private citizens, business and labor leaders and Supreme Court justices.”
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 Mr. Trump’s private documents.
But Democrats are expected to counter that the tax documents were essential for their review into the effectiveness of the I.R.S. 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 Mr. 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 Mr. Trump.
“This rises above politics, and the committee will now conduct the oversight that we’ve sought for the last three and a half years,” Representative Richard E. Neal of Massachusetts, the Democratic chairman of the committee, said when the Supreme Court allowed the release last month.
The Ways and Means Committee will meet on Tuesday afternoon and is expected to vote on whether to release data from Mr. 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 Mr. 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, Mr. Trump told wealthy friends at his Palm Beach, Fla., resort, “You all just got a lot richer.”
The tax returns could shed light on whether Mr. Trump did, too.
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 M. 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 I.R.S.
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, Republican of Michigan, voted to release confidential tax information in urging the Justice Department to investigate their allegations that an I.R.S. official had discriminated against conservative groups in deciding which organizations to scrutinize.
George K. Yin, an emeritus tax law professor at the University of Virginia, said that the bar should be high for Congress to obtain Mr. Trump’s tax returns and even higher to publish them. He is concerned that if the release of the documents is widely viewed as political, then a tit-for-tat scenario is likely to ensue.
“That’s the end of tax privacy to me,” Mr. Yin said. “Essentially no one’s tax information is really protected, as long as you cross some interest who happens to be in power at some particular point in time, then we’re all vulnerable.”