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Friday, February 10, 2017

Yin:  Congress Already Has The Power To Obtain And Release Trump’s Tax Returns

Trump Tax ReturnsWashington Post op-ed: Congress Has the Power to Obtain and Release Trump’s Tax Returns, by George K. Yin (Virginia):

Though our new president may not realize it, Congress has the power to obtain his tax returns and reveal them to the public without his consent, including returns under audit. As just urged by Rep. Bill Pascrell Jr. (D-N.J.), legislators seeking information on President Trump’s possible conflicts of interest should immediately exercise this authority rather than wait for the passage of new veto-proof legislation — a highly uncertain prospect — that would have the same effect.

The ability of Congress to disclose confidential tax information was added to the law almost 100 years ago. Since the Civil War, when it began requiring taxpayers to submit private information to the government to comply with the tax laws, Congress has struggled to balance the privacy interests of taxpayers with the public’s right to know. Eventually, Congress decided that tax information should remain confidential except in two situations. First, it authorized the president to determine whether any tax information could be disclosed. And, in 1924, it gave the same power to certain congressional committees [George K. Yin, Protecting Taxpayers From Congressional Lawbreaking].

Congress’s right to reveal tax information independent of the president’s authority proved extremely important in 1973 and 1974, when President Richard Nixon became entangled in a controversy involving his claim of a sizable charitable deduction for giving his official papers to the National Archives. Nixon initially stonewalled the inquiries, including making his famous statement that “I am not a crook.” When the pressure increased, he contended correctly that the IRS had already audited the pertinent returns and not ordered any change.

But a leak subsequently revealed that Nixon, despite having income of more than $200,000, had paid about the same amount of tax as families with incomes under $10,000. Outrage at this revelation eventually led Nixon to seek review of his taxes from the congressional Joint Committee on Taxation, which delegated the task to its respected nonpartisan staff. The staff ultimately found that Nixon owed almost $500,000 in additional taxes over four years — roughly one-half of his net worth at the time. Because of the importance of the matter to the nation, the Joint Committee exercised its authority and voted 9 to 1 (three Republicans joined six Democrats) to release the staff report, including Nixon’s confidential tax return information, to the public.

Following Watergate, Congress changed the law to eliminate the president’s ability to order a disclosure. But it retained the right of its tax committees to do so as long as a disclosure served a legitimate committee purpose. Such a disclosure must be in the public’s interest, and today’s understandable concerns about Trump’s potential conflicts of interest would seem clearly to justify a congressional effort to obtain, investigate and possibly disclose to the public his tax information.

http://taxprof.typepad.com/taxprof_blog/2017/02/yincongress-already-has-the-power-to-obtain-and-release-trumps-tax-returns.html

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Comments

What's the statute involved here? The article seems to go out of his way to not cite it. I'd really love to know if only the President's right to privacy per the IRC can be circumvented, or if it would allow the release of tax returns for all members of Congress.

Posted by: MM | Feb 10, 2017 7:47:21 AM

@MM - IRC 6103(f).

Posted by: Anon | Feb 10, 2017 10:12:14 AM

Thanks guys. That section doesn't specify the President, doesn't specify any public officials, but every one of those disclosures have the same confidentiality caveat: "any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure."

I still fail to see how any committee chairman can legally disclose any individual's tax returns, President or not, to the general public without his or her consent.

Posted by: MM | Feb 10, 2017 7:07:29 PM

Mr. MM: It depends on whether a member of Congress is considered to be an "officer or employee of the United States." Sec. 6103 makes it illegal for any "officer or employee of the United States" to disclose a tax return in contravention of sec. 6103. In some circumstances, officers and employees of the Legislative Branch are not officers or employees of the United States. Likewise for officers and employees of the Judicial Branch. Perhaps you know the answer?

Posted by: Publius Novus | Feb 11, 2017 8:17:00 PM

The disclosure authority is set forth in the second sentence of section 6103(f)(4)(A), which allows the committees to submit the tax information to the House or Senate, effectively making it public. The Ways & Means Committee used this authority in 2014 to make public the tax return information of 51 taxpayers without their consent. For background on that incident and the law, see George K. Yin, Preventing Congressional Violations of Taxpayer Privacy, 69 Tax Lawyer 103 (2015), copy available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2628193

Posted by: George Yin | Feb 12, 2017 6:04:16 AM

Pubs, what do you care? You buried your own credibility on all things concerning privacy last year: "Please spare me the 'public has a right to know' stuff." 10/5/16

Posted by: MM | Feb 12, 2017 2:30:29 PM

Professor Yin, you present the 51 taxpayer incident in a deliberately misleading way, here and in the paper you cite. Only on the 7th page of that paper do we discover that the persons whose info is disclosed are not in fact taxpayers, but the tea party nonprofits who were being mistreated by the IRS,who were, as far as I can recall, very happy about their plight being publicized. They were not taxpayers whose income tax returns were being disclosed. Also, you condemn the IRS for that disclosure, so presumably you would condemn a Democratic Congressman who leaked, without even getting a vote of the Committee, President Trump's personal tax information.

Posted by: Eric Rasmusen | Feb 24, 2017 6:09:31 PM