‘Follow the Money’ – Congress needs to see Trump tax returns

Donald Trump has consistently misled the public about releasing his tax returns, as every presidential candidate and president has done since Richard Nixon. Trump started out saying “If I decide to run for office, I’ll produce my tax returns, absolutely,” he said. “And I would love to do that.” Then he hemmed and hawed, and finally spewed bullshit about how he couldn’t release his tax returns because he is under an audit. After he was elected Trump asserted no one cared about his tax returns, and has consistently refused to produce his tax returns. All the things Donald Trump has said about releasing his tax returns.

The previous Republican Congress enabled Trump to get away with not producing his tax returns as part of its oversight function, despite three Emoluments Clause cases having been filed, and long-standing allegations about foreign money flowing into the Trump organization, money laundering and influence peddling.

But now the Democrats control the oversight committees in the House. Steve Rosenthal explains, Congress Can And Should Demand President Trump’s Tax Returns:

Incoming House Ways & Means Committee Chair Richard Neal (D-MA) indicated that he will request President Trump’s tax returns soon after Democrats formally take control of the House in January. Trump already has said he will try to block their release. [More on this below.] In this matter, Neal is right. He not only has the authority to see the president’s tax returns, such a step is appropriate and necessary, as part of our checks and balances.  The Constitution calls upon the House, along with the Senate, both to enact legislation and to oversee whether those laws are faithfully executed. To fulfill its oversight responsibility, I believe the House should demand the President’s tax returns.

The House effectively delegates its oversight responsibilities to its committees which can issue subpoenas for documents or testimony from the executive branch.  In the matter of tax returns, the law could not be more clear (see Code sec. 6103(f)):  Upon written request by either the Chairman of either the House Ways and Means Committee or the Senate Finance Committee, the Treasury Secretary “shall furnish such committee with any return or return information specified in such request.”  The Ways and Means Committee may share these tax returns and related information with the full House, assuming there is a legitimate purpose for doing so.

Congress gave itself the right to review any return or return information in 1924, in the aftermath of two controversies. One was the Teapot Dome scandal, where senior officials in the Harding Administration granted public oil field leases in exchange for bribes. The other involved allegations that Treasury Secretary Andrew Mellon continued to own many business interests while serving in government.  Some believed the Bureau of Internal Revenue, the precursor to the IRS, showed favoritism to the secretary and his businesses.

The parallels to President Trump are striking.  Trump maintains a sprawling business empire, which he refuses to transfer to a blind trust.  According to multiple published reports, the president, through his businesses,  derives income from foreign governments and their lobbyists, which also may violate the Constitution’s  prohibition against emoluments.  The president reportedly intervened personally to block  the FBI from moving its headquarters and thus opening up for commercial development a site just a few blocks from  his downtown Washington hotel.  The president reportedly paid little or no tax for many years, in part because of aggressive tax planning and, perhaps, tax evasion.  And throughout his campaign and since his election, the President acknowledged that he has been under audit.

These multiple allegations raise legitimate questions about whether the president is running the government for his benefit or the public’s—or both.  Is he profiting from his position?  Is the public harmed?  Is the IRS auditing the president’s returns appropriately—and without favoritism?  Has the IRS proposed any adjustments—and has the president paid them?

To fulfill its oversight responsibility, Congress, through the Chairman of the Ways and Means Committee, should demand the president’s personal and business tax returns that were open for audit at the time he assumed office and the 2017 returns filed since his election.  Neal also should request any audit records for these returns, the work papers of any audit, and any written determinations.

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Every President until Donald Trump voluntarily released his returns to the public and permitted them to be automatically audited by the IRS automatically audited by the IRS.  As Nixon famously explained: “People have got to know whether or not their president is a crook.”

Nixon was right.

POLITICO reports that Trump’s Treasury Department is readying plans to drag the expected Democratic request for Trump’s past tax returns, which he has closely guarded, into a quagmire of arcane legal arguments. The plan to keep Trump’s taxes hidden:

At the same time, officials intend to publicly cast the request as a nakedly partisan exercise. The two-pronged scheme was developed by a handful of top political appointees and lawyers inside the department — with the ultimate goal of keeping the president’s past returns private, according to four people familiar with the administration’s approach.

The strategy will hinge on an argument that politically motivated Democrats will inevitably leak Trump’s tax information — a felony in and of itself — if the IRS hands over the documents. So because Democrats can’t be trusted to keep the documents private, they shouldn’t get them in the first place, officials will insist. Treasury officials have been waiting since early January for a top Democrat to make the request.

This is a specious argument since every presidential candidate and every president since Richard Nixon has publicly released their tax returns in the interest of transparency and the public’s right to know “whether or not their president is a crook.”

Trump is obstructing a clear congressional prerogative. CNN explains:

[T]hanks to a 1924 provision in the Internal Revenue Code — the “committee access” provision, as it’s known — the chairmen of the House Ways and Means Committee and Senate Finance Committee are authorized to request the president’s — or indeed anyone’s — tax returns from the IRS to conduct an investigation.

How the provision works and why it was created

The chairmen of the tax-writing committees — whether they act together or alone — don’t need to disclose that they’ve requested the president’s returns. But they may choose to — and likely would — share the returns with their committee members in closed session.

If the committee thinks releasing the returns to the House or Senate would further a legitimate committee purpose, they’re permitted to do so, according to George Yin, a former chief of staff at the Joint Committee on Taxation, and a professor of law at the University of Virginia and author of a 2017 article on the law.

At that point it’s up to the full chamber to decide whether to make the returns public. “Of course, as a practical matter, it’s a little hard to imagine information going to the full House or Senate and not becoming public,” Yin said.

The power to obtain and disclose anyone’s tax return is an enormous one — and it’s been used very sparingly since it was first added to the tax code.

It was originally added to rectify a power imbalance between the executive and legislative branches, Yin wrote in earlier analyses of the provision. Back then, if Congress — which is charged with oversight of the executive branch as well as all tax matters — wanted to see a tax return it had to make the request through the president.

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Having the power to make a tax return public is especially important when it comes to potential transgressions by public officials, said tax historian Joseph Thorndike. “Congress can’t do its oversight job if that oversight is hidden to the public. That’s the heart of the oversight function.”

Congressional committees are not the only ones that can obtain Trump’s personal and organization tax returns. It is a near certainty that Special Counsel Robert Mueller or the Southern District of New York has already received the tax records of the Trump organization, the Trump Foundation, and the Trump campaign.

The Southern District of New York this week also issued subpoenas to the Trump Inaugural Committee. Trump Inaugural Committee Ordered to Hand Over Documents to Federal Investigators:

Escalating one of the investigations into President Trump’s inaugural committee, federal prosecutors ordered on Monday that its officials turn over documents about donors, finances and activities, according to two people familiar with the inquiry.

The subpoena seeks documents related to all of the committee’s donors and guests; any benefits handed out, including tickets and photo opportunities with the president; federal disclosure filings; vendors; contracts; and more, one of the people said.

The new requests expand an investigation prosecutors opened late last year amid a flurry of scrutiny of the inaugural committee. And they showed that the investigations surrounding Mr. Trump, once centered on potential ties to Russia during the 2016 presidential election, have spread far beyond the special counsel’s office to include virtually all aspects of his adult life: his business, his campaign, his inauguration and his presidency.

In the subpoena, investigators also showed interest in whether any foreigners illegally donated to the committee, as well as whether committee staff members knew that such donations were illegal, asking for documents laying out legal requirements for donations. Federal law prohibits foreign contributions to federal campaigns, political action committees and inaugural funds.

Prosecutors also requested all documents related to vendors and contractors with the inaugural committee, which raised a record $107 million and spent lavishly.

People familiar with the subpoena said prosecutors are interested in potential money laundering as well as election fraud, though it is possible that the prosecutors do not suspect the inaugural committee of such violations. The prosecutors cited those crimes in the subpoena simply as justification for their demand for documents, the people said.

Another entity that the subpoena seeks documents on is Stripe, which created technology to help process credit card transactions. According to published reports, the company counts Josh Kushner, the brother of Mr. Trump’s son-in-law, Jared Kushner, among its investors. Josh Kushner is not named in the subpoena, and a spokesman for him declined to comment.

A spokesman for the inaugural committee said it was still reviewing the subpoena and intended to cooperate with the investigation.

The Attorney General of New York is also investigating the Trump organization and Trump Foundation. Incoming New York attorney general plans wide-ranging investigations of Trump and family. Already, the Trump Foundation Will Dissolve, Accused of ‘Shocking Pattern of Illegality’:

The foundation was accused by the attorney general, Barbara Underwood, of “functioning as little more than a checkbook to serve Mr. Trump’s business and political interests,” and of engaging in “a shocking pattern of illegality” that included unlawfully coordinating with Mr. Trump’s 2016 presidential campaign.

In addition to shuttering the charity, her office has pursued a lawsuit that could bar President Trump and his three oldest children from the boards of other New York charities, as well as force the payment of millions in restitution and penalties.

State and federal prosecutors are “following the money.” Congress also has the obligation to “follow the money” in congressional oversight. Make the request.

UPDATE 2-7-19: ABC News reports, House Democrats take 1st step to obtain Trump’s tax returns:

House Democrats will take their first step toward obtaining President Donald Trump’s personal tax returns, convening a hearing Thursday to examine legislative proposals and laws dictating the process to acquire the documents.

The Ways and Means Subcommittee on Oversight will meet to hear testimony from a slate of experts on tax law, including a 1924 measure that allows the chairman of the exclusive tax-writing panel to privately examine anyone’s tax returns. A majority vote from the committee would be required to publicly release the returns, if obtained.

Democratic leaders have argued that the filings could produce a road map for investigations into Trump’s tangle of global businesses and provide a cure for anxiety caused by his refusal to share details about his wealth, debt, charitable giving and potential conflicts of interests.

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Five witnesses are expected to testify: Joseph J. Thorndike, director of the Tax History Project, an initiative from Tax Analysts; George K. Yin, the Edwin S. Cohen Distinguished Professor of Law and Taxation at the University of Virginia School of Law; Noah Bookbinder, executive director at the Citizens for Responsibility and Ethics in Washington; Steven M. Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center; and Ken Kies, managing director of the Federal Policy Group.