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What Might Trump’s Tax Returns Show? Here’s Why They’re A Big Deal
On July 2, House Democrats escalated their years-long effort to obtain President Donald Trump’s tax returns by taking the fight to court. That’s right — the House Ways and Means Committee filed a lawsuit against the Treasury and the IRS to access the president’s financial records. But why does it matter that Trump has refused to release his tax returns for years? Legal expert Ciara Torres-Spelliscy tells Elite Daily that Trump’s tax documents could show more about the president than you might think.
Some things that Trump’s tax returns may be able to shed light on include any potential tax dodging, the president’s relationships with foreign governments, and his compliance with the Constitution’s emoluments clauses. In their July 2 lawsuit over Trump’s tax returns, House Democrats argued that Section 6103(f) of the tax code gives the Ways and Means Committee the right to request any taxpayer’s records, including the president’s. Despite this, Treasury Secretary Steven Mnuchin rejected the committee’s request for six years of the president’s tax returns back in May, and subsequently refused to comply with a congressional subpoena. The Treasury Department and the IRS did not respond to Elite Daily’s previous request for comment on the suit, while the White House characterized it as a “sham lawsuit” in a July 2 statement to Elite Daily.
As a result, House Democrats are taking the Treasury and the IRS to court. According to Ciara Torres-Spelliscy, a professor of law at the Stetson University College of Law and a fellow at the Brennan Center, Trump is the first president since Richard Nixon to refuse to release his tax returns — and that’s significant.
“It turns out that Nixon was not paying his fair share of taxes and so when that came out, that was one more reason why the Congress turned against President Nixon,” Torres-Spelliscy tells Elite Daily. According to , Nixon underreported his tax liability in the 1970s, and after he was audited for the second time during his presidency, the IRS found that Nixon owed almost $500,000 in additional tax on interest. Nixon later resigned from office before he could be impeached, and was pardoned by President Gerald Ford “for all offenses” he may have committed.
So Torres-Spelliscy asks the question on everyone’s minds: “Is President Trump paying his fair share of taxes?”
In October 2018, published a bombshell report alleging that Trump engaged in dubious tax schemes and fraud throughout the 1990s. The alleged Trump did this in order to increase the roughly $413 million he received from his father’s real estate empire during that same time period — and that he did so by helping his parents dodge taxes. The further alleged Trump worked with his siblings to set up an inactive company that then disguised money and gifts from their parents. Trump responded at the time by describing the investigation as a “hit piece.”
But in May, the published another report — this time alleging Trump’s businesses claimed more than $1 billion in losses between 1985 and 1994, thereby enabling him to avoid paying income taxes for eight of those 10 years. Trump described this second report as an “inaccurate Fake News hit job” on Twitter, but Torres-Spelliscy says that despite Trump’s denials, the allegations made in both of these reports could explain Congress’ heightened interest in obtaining the president’s tax returns.
“There was an investigation that was prompted by this article into Trump’s sister, who was a sitting federal judge, and his sister actually resigned her seat on the federal court and that closed that investigation into her taxes,” Torres-Spelliscy says. Elite Daily reached out to the Trump Organization for comment on the investigation into Barry and her subsequent resignation, but did not hear back.
“And there’s going to be a similarity between [Barry’s] taxes and her brother because they are both beneficiaries of Fred Trump’s tax planning, so what a lot of people are intrigued about and wondering about is similar to questions that were raised around President Nixon,” Torres-Spelliscy adds.
But Trump’s alleged family history of tax dodging isn’t all that House Democrats might be interested in. According to Torres-Spelliscy, “Congress could have a number of questions about President Trump’s taxes,” including about his relationships with foreign nations.
“It is entirely possible that one of the things that congressional investigators are interested in seeing is, are there payments in his taxes or the taxes of his business that are traceable to foreign nations, including Russia?” Torres-Spelliscy says.
According to a CNN report from 2016, Trump’s tax returns wouldn’t necessarily reveal direct dealings with Russian oligarchs or anything quite as insidious. However, they could clarify whether or not Trump has claimed tax credits for taxes paid to foreign governments, and give the public an idea of any foreign bank accounts he might have. At the time of the report, Trump told CNN affiliate WFOR in Miami that he had “nothing to do with Russia whatsoever,” indicating he had not taken out any loans from Russian banks or investors.
Torres-Spelliscy also points out that Congress might want to access Trump’s tax returns in order to determine whether or not the president has violated the Constitution’s foreign and domestic emoluments clauses. The foreign emoluments clause makes it illegal for anyone elected to federal office to receive gifts, payments, or anything else of value from a foreign nation, including from its rulers, officers, or representatives.
The domestic emoluments clause, meanwhile, prevents the president from receiving any benefits other than his fixed salary from federal, state, or local governments. Justice Department lawyers representing the president have tried to put ongoing emoluments lawsuits against Trump on hold, but a federal judge rejected this request last month.
“If you can see the money flows through the Trump Organization and they are coming from, say, the government of Saudi Arabia — just to name a potential source — that might indicate that there is an illegal and unconstitutional emolument going to the president of the United States because he is the ultimate owner of the entire Trump organization,” Torres-Spelliscy explains.
Trump is currently embroiled in three different emoluments lawsuits, reported, all of which allege specific violations of the Constitution’s emoluments clauses. Then, as recently as the week of June 29, Trump faced additional accusations of violating the foreign emoluments clause during a trip to South Korea. According to , Trump traveled to South Korea at the end of June to push U.S. economic interests — and while this was happening, a partner company of the Trump Organization was allegedly trying to strike a business deal involving a South Korean construction company over Trump-branded luxury resorts. Elite Daily has reached out to the Trump Organization for comment on these emoluments-related allegations.
Congress therefore has a wide range of reasons for wanting the Treasury and the IRS to hand over the president’s tax returns, not least of which because many House Democrats are pushing for Trump’s impeachment, per CNN. For these Democratic lawmakers, and for the American public, whatever is hiding in the president’s tax returns matters — especially as he runs for reelection in 2020.