Democrats on the chief tax-writing committee in the House could vote on Tuesday to release tax return information on Donald Trump after winning a prolonged legal battle against the former president in the final weeks of Democratic control of the lower chamber.
The Ways and Means Committee announced a meeting for Tuesday afternoon on “documents protected under Internal Revenue Code section 6103,” the rule under which Democrats were able to obtain Trump’s tax records from the Treasury for years 2015 to 2020.
A vote at that meeting to issue a report to the wider Congress involving Trump’s tax information could open a new chapter in the saga of Trump’s tax returns, which were a source of great frustration for Democrats during Trump’s presidency after he broke with decades of presidential precedent by not sharing them upon entering office. It could also help to close the book on the matter once and for all.
Congressional experts say the contents of such a report to Congress could vary.
“Does that report have all the information that the Ways and Means Committee obtained? Does it have part of the information, perhaps in summary form?” Steve Rosenthal, an analyst with the Urban-Brookings Tax Policy Center, said in an interview. “Or perhaps [it just has] a conclusion saying the Ways and Means Committee reviewed these tax returns and there’s nothing to worry about. It could be a very short report including summary documents.”
But a veritable canon of investigative reporting on Trump’s personal finances going back years has set high expectations for a big reveal.
In 2020, the New York Times reported that Trump paid only $750 in federal income tax in 2016 and that he’d paid “no income taxes at all in 10 of the previous 15 years – largely because he reported losing much more money than he made.”
In 2016, the paper reported that Trump incurred a $916 million loss on his 1995 tax return, theoretically allowing him to avoid income tax for nearly 20 years.
“To generate the $916 million of losses, Trump used other people’s money without ever repaying his borrowings or reversing his tax deductions, as the law requires. And the IRS apparently never challenged,” Rosenthal wrote online on Monday.
There’s doubt about whether the documents provided to House Democrats go back far enough to be able to give a full picture of Trump’s financial history and corroborate so much bombshell reporting.
“It could be a case of too little too late,” Rosenthal said. “I expect very little, without a fuller probe.”
Political strategists say Democrats should be seizing the opportunity to focus on transparency issues around Trump’s business dealings, especially after one of Trump’s main businesses was convicted of tax fraud earlier in December and as the high-profile Jan. 6 Committee considers its own set of criminal referrals against the former president.
“This is not old news. Donald Trump is once again a candidate for president in 2024 in the Republican primary. So this is news you can use, not old news to lose,” Democratic strategist Antjuan Seawright said in an interview.
“This should spark conversations and is going to spark conversations and should give some people some real cause to think, especially depending upon what’s in [the report],” he added.
Republicans said over the weekend that releasing Trump’s tax returns would set a new and damaging precedent.
“Ways and Means Democrats are unleashing a dangerous new political weapon that reaches far beyond President Trump, and jeopardizes the privacy of every American,” Ways and Means Republican leader Kevin Brady (R-Texas) said in a statement on Saturday.
“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. This is not limited to public officials, but can target private citizens, business and labor leaders, and Supreme Court justices,” he said.
But after the midterm elections, which saw many of Trump’s chosen candidates lose and his clout within the Republican party come into question, the disclosure of the former president’s tax returns may not represent the huge threat to Republicans that it did in years past.
Rather, Republicans’ vociferous disapproval may be paving the way for their own set of investigations that could result in their own preferred tax disclosures once they take over the House in January.
“If you step back, maybe Trump doesn’t even run for office again. So why would the Republicans care?” Steve Rosenthal said. “Ways and Means Republicans could come out and say, ‘You guys started it. This is both-sides-ism.’ And so they’re going to ask for the tax return information on Hunter Biden and Joe Biden and whoever else they want to embarrass.”
Accusations of political retaliation through U.S. tax administration are nothing new.
Recently, the specialized audits of two top former FBI officials who became political foes of Trump over the investigation into his ties with Russia set off alarm bells for Democrats before the Treasury Inspector General cleared the IRS of wrongdoing.
Likewise, Republicans accused the IRS of targeting the tax-exempt status of conservative political groups during the Obama administration.
Democrats on the Ways and Means Committee could also decide not to release anything substantive in their potential report to Congress.
In that case, the Finance Committee in the Senate, which will stay under Democratic control come January, may take up the investigation.
Senate Finance Committee chair Ron Wyden (D-Ore.) expressed interest in continuing the investigation after the Department of Justice sided with the Ways and Means Committee in 2021, arguing the committee had a right to see Trump’s tax returns.
“The Justice Department confirms that Secretary Mnuchin acted outside the law in refusing to respond to a congressional request for Donald Trump’s tax returns,” Wyden said in a 2021 statement, referring to Trump’s Treasury Secretary Steve Mnuchin. “In light of this decision, I will consult with the Ways and Means Committee and consider the Finance Committee’s next steps.”
Ways and Means Democrats have been seeking Trump’s tax returns since winning the House in 2018, saying they needed them from the IRS to perform oversight of the federal presidential audit program.
“The IRS has a policy of auditing the tax returns of all sitting presidents and vice presidents,” Rep. Richard Neal (D-Mass.) said in 2019. “We must obtain President Trump’s tax returns and review whether the IRS is carrying out its responsibilities.”
Whatever the scale of the disclosures on Trump’s personal tax returns, experts say his case is indicative of a broader set of problems with the U.S. tax system and how its complexities allow it to be exploited in bad faith.
“For our voluntary tax system to remain stable, we count on taxpayers not to play ‘hide-the-ball,’ or as Trump fashions it, to treat taxes as a sport. Trump once said that’s the way he looks at it,” Steve Rosenthal said. “The system will collapse if taxpayers game it and are successful.”