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Trump’s tax returns case lost in the Supreme Court. What now?

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This week, in one unsigned order with no dissenting votes, the U.S. Supreme Court finally allowed the U.S. Treasury Department to deliver six years of former President Donald Trump’s tax returns to the House Ways and Means Committee. The Supreme Court refused to hear the former president’s arguments and upheld a lower court ruling that the commission 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 Justice Department reversed its legal position, and Ways and Means Committee chair Rep. Richard Neal, D-Mass., a second request to the Treasury Department in 2021.

This is clearly a legal victory for lawmakers, but one wonders what the point of this massive effort is.

This is clearly a legal victory for lawmakers, but one wonders what the point of this massive effort is is, as the Manhattan District Attorney has already obtained many tax returns and related documents for Trump and his organizations. These documents were obtained from Mazar’s — the accounting firm that prepared Trump’s tax returns but later disavowed its accuracy — and have already been used to force a guilty plea from Trump Organization CFO Alan Weisselberg and the company in court to bring. Letitia James, the New York Attorney General, has also filed tax returns for years and has filed a civil suit based largely on these returns. Federal prosecutors in the Southern District of New York no doubt have them too.

But while Trump’s lengthy legal wrangling delayed the production of documents to Neal’s committee, it also created two more dangers for Trump.

First, the updated House request to the Treasury Department in 2021 asks for more recent tax returns, this time for tax years 2015-2020. These filings span the entire Trump presidency, meaning the House will take a full look at whether Trump or his companies may have violated the emoluments clause. That’s the clause of the Constitution that prohibits federal officeholders from receiving gifts, payments, or anything of value from leaders or representatives of a foreign country (and because this is a constitutional prohibition, Trump can’t claim it doesn’t apply to a president).

Second, the opinion of the highly regarded DC Court of Appeals has now confirmed that the legal threshold that congressional tax committees must pass to access the tax returns of a former president (and even a sitting president) is quite low.

Now Trump has to live with the possibility of one or more of his tax records becoming public — a scenario he seems to have dreaded since he first ran 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. Prosecutors can obtain, but not disclose, the contents of tax returns unless it becomes necessary to use relevant parts of the returns as evidence. However, the House Ways and Means Committee is not so limited. If it decides that taxpayer information should be passed on to the full House or Senate, or a referral to the Justice Department, the committee may make the contents of those communications — including the taxpayer information — public.

There is a long and extensive history of why taxpayer information is considered so private in the United States. During the Civil War, Public Notices were posted and published in newspapers detailing which taxpayers owed how much income tax. But after that tax bill lapsed, concerns about taxpayer privacy became a constant theme, primarily for two reasons: first, that politicians would use taxpayer information to prosecute their political opponents, and second, that taxpayers, concerned about disclosure , would not be honest in their tax returns.

As a result, even if the federal government’s ability to levy taxes was explicitly authorized by the Sixteenth Amendment in 1913, the government’s power to raise taxes was always tied to the non-disclosure of personal tax information. (In fact, citing privacy regulations, the IRS won’t even allow a taxpayer to see false tax returns filed in that taxpayer’s name where the crook has demanded the taxpayer’s refund).

After evidence came to light that President Richard Nixon had used taxpayer information to attack political opponents, legislation was enacted in 1976 severely limits the ability of a president to release taxpayer information. But the restrictions for congressional committees are less strict and much is left to the discretion of the committees.

With regard 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 to fulfill its responsibility, funding and oversight of the presidential audit program. Under this program, the IRS automatically audits each president’s tax returns, eliminating the need for the agency to decide which chief executive to audit. Chairman Neal’s request to the Treasury Department noted that Trump’s tax returns were “excessively large and complex,” necessitating a committee investigation to ensure the IRS was not being intimidated and about proper resources. This stated reason, the lower courts ruled, was prima facie enough to refute Trump’s argument that the request for his return 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 ends up making any material public is anyone’s guess. Federal District Judge Trevor McFadden, Trump appointee to the court in 2017, ordered the Treasury Department to turn over the materials to the Ways and Means Committee, noting that “[i]It may not be right or wise to publish the results, but it is the chairman’s right to do so.” But he also warned the committee that “[a]anyone can see that publishing a political rival’s confidential tax information is the kind of move that will continue to plague the inventor. In other words, what’s good for the goose is good for the gander.

That’s true. But the mere tax returns in the hands of the commission must be sobering to someone like Trump, who boasted that he made hundreds of millions of dollars, paid no federal income tax in 10 of the 15 years before he was elected president. It’s also true that even if the House forgoes the review because Republicans will soon gain control of its committees, Trump’s tax returns may also be requested by the Senate Treasury Committee, which will remain under Democratic scrutiny. So, public or not, Trump’s tax information may serve as an in-room polygraph in the future, its contents being a measure of the truth of the former president’s words.

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