One of the underlying principles of our income tax laws is that our tax returns are kept secret and only those who have a legitimate need to know can see them. However, some of the efforts to enable Congress, and perhaps everyone else, to see the tax returns of private citizen Donald J. Trump, may threaten that principle, not just for him, but for everyone else.
Let me be clear: I have no sympathy for Trump and oppose virtually everything he has done as president. He was also dishonest with the voters when he claimed that only federal tax audits kept him from releasing his returns during the presidential campaign.
I also recognize that, although the Internal Revenue Code and, until recently, the New York tax laws, contain very strong protections against public disclosure, Trump has a basis for his fear that his returns and those of many of his companies may show up soon on the internet.
Two Pending Lawsuits
There are two pending lawsuits over the Trump returns, plus two others seeking access to his financial information held by third parties, that might include some tax information.
The key tax case, brought by the House Ways & Means Committee, relies on a 1925 statute that entitles the tax writing committees to obtain access to the returns of any taxpayer as part of their oversight responsibilities. In the case of Trump, the committee wants to determine whether the IRS is properly carrying out its responsibilities to audit the returns of all U.S. presidents, and whether his returns utilized loopholes that need closing, including those that may have been created when he signed the 2017 tax cuts into law.
When Trump administration officials refused to comply with the law, on the ground that the committee’s request was made for improper political purposes, the committee sued.
Based on what Trump’s lawyers and other supporters are saying, you would think the lawsuit demanded the public release of those returns. But the law at issue only require that the committee be given those returns, which must be “in closed executive session.”
What the law does not say is what the committee may and may not do with those returns once it has them—and that is what the lawsuit appears to be really about.
The second case involves a New York law that was just passed as an end run to help the House committee in case it ran into trouble in obtaining the Trump federal returns, but no others.
It directs the New York tax authorities to provide the committee with copies of the New York, but not the federal, returns of Trump and many of his companies if the committee requests them. Trump has sued to stop the turnover, even though no request has been made.
Once again, what Trump is most concerned about is that the returns not be made public, and the New York law does not prevent that from happening, nor could it, because a state cannot tell a House committee what it can do with records that it has lawfully obtained.
There’s a Reason Why Tax Returns Are Secret: Honesty
Because the law on which the House relies has been used for almost a century on a regular basis and not just against political figures, and because the courts will be extremely reluctant to go behind the committee’s stated motives, the committee is likely to gain access to the federal Trump returns, and it should say “no thanks” to New York’s offer.
That still leaves open the question of whether the committee may, or should, make those returns public. And that is an issue about which all of, not just Trump, should care deeply.
There is a reason why tax returns are kept secret: it helps assure that taxpayers will be honest with the IRS, knowing that others will not have access to them, absent one of the limited exceptions spelled out in the law.
As for why taxpayers prize their secrecy, there are probably as many reasons as there are taxpayers, as the Trump tax returns illustrate: they might show that he is either not as rich as he claims, or perhaps much richer. They might show that he is not as charitable as others with his income, or they may reveal special tax shelters that need to be closed.
For ordinary taxpayers, other reasons would apply, but the point remains that my tax returns are none of your business, unless you have a good reason to see them, as does the Ways & Means Committee.
The courts should insist that the committee adhere to that principle as a condition of obtaining the Trump returns, leaving open the possibility that the committee can convince the court that there is a legitimate reason why those returns—like those of the rest of us—should not remain secret.
Congress could, of course, change the law and direct the IRS to make public the tax returns of future U. S. presidents, or even candidates for president or Congress, if they do not do so in a timely manner. Everyone who ran for those offices would know the rules in advance, unlike Trump who can legitimately claim that the rules on public disclosure are being changed to single out him for special unfavorable treatment and may violate the prohibition on bills of attainder in Article I, section 9, clause 3 of the Constitution.
Just because he broke his promise to make them public on his own, is not a reason for making his returns public, and all of us have a stake in seeing that his privacy is protected.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Alan B. Morrison is the Lerner Family Associate Dean at George Washington University Law School where he teaches constitutional law.