TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, February 5, 2019

Grewal: Congress Might Already Have Trump’s Taxes

Andy Grewal (Iowa), Congress Might Already Have Trump’s Taxes:

Since the control of the House switched earlier this month, Democrats have reiterated their desire to obtain President Trump’s tax returns. According to a recent Wall Street Journal article, Rep. Richard Neal, the chairman of the Ways & Means Committee, intends to request those returns from the IRS. My prior posts have examined some of the legal and political complications associated with any such request. (See here and here.) However, Congress might already have access to some of the President’s tax return information.

Under Section 6405(a) of the tax code, the IRS cannot pay a refund greater than $2 million to any individual unless it first provides a report to the Joint Committee on Taxation (JCT). That report must identify the taxpayer involved, the amount of the proposed refund, and a summary of the facts relating to his or her refund. In practice, this review provision acts as a veto provision – the IRS generally will not issue a refund without the JCT’s approval.

Given Trump’s apparent wealth and business activities, it would be hardly surprising if, at some point, he received a refund from the IRS that triggered the JCT refund review procedures. ... Congress thus likely has, or at least once had, some significant tax return information related to the President. ...

[R]ather than turn tax returns into political pawns – and stir public concerns about taxpayer privacy – legislators should consider measured alternatives to direct inspection.

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