Monday, February 18, 2019

Contemplating Trump's taxes (again) on Presidents Day

Mount Rushmore National Memorial_Facebook
Today technically is George Washington's Birthday, but we've come to call it Presidents Day in honor of all our commanders in chief, like these four greats on Mount Rushmore National Memorial. (Image courtesy Mount Rushmore Facebook page)

How are you celebrating George Washington's birthday?

Yep, that's what today officially is, despite all the Presidents Day sale signs in retailers' windows.

Technically, America's first president was born on Feb. 22, 1731. However, since 1971 we've celebrated his arrival day on the third Monday of his birth month thanks to a law that took effect that year mandating most federal holidays be observed on Mondays.

Then, being a culture that likes to expand things, the commemoration of the Father of our Country's birthday was unofficially broadened to recognize other commanders in chief.

Lincoln's legacy: At first, it was redubbed Washington and Lincoln's Birthday Day.

That sort of made sense. Abraham Lincoln was born on Feb. 12, 1809, and did serve during what is arguably the worst time in our country's history, the Civil War.

That's OK with me. Our 16th president also is, like Washington, a notable national father, in the case the father of our tax system.

OK, Lincoln didn't actually write the tax code. But he recognized the need for taxes to help finance the Union's fight against the Confederacy. In August 1861, he signed into law the legislation that created the United States' first federal income tax.

Soon, the rest of the residents of the Oval Office were invited to George's birthday party, giving us what we now call Presidents Day.

Some commanders in chief are more loved than others, so I leave you to your personal preference as to which U.S. presidents you honor today.

Presidential tax release tradition: Another area in which most modern-day presidents have participated is the release of their tax returns.

For almost 40 years, it was an election year ritual for candidates for the highest elected office in the United States to show at least some of their 1040 filings to the voters.

The table below, taken from written testimony submitted by Dr. Joseph J. Thorndike, Director of the Tax History Project, Tax Analysts, to the House Ways and Means Committee Oversight Subcommittee shows the history of recent presidential candidate tax filing openness.

Thorndike Testimony 020719 WnM Oversight_presidential tax return releases table

That tradition ended in 2016. Donald J. Trump opted to keep his tax returns private, saying they were under Internal Revenue Service audit.

Audits no excuse: Tax experts have repeatedly noted that IRS examination of returns is not a reason for Trump or anyone to keep their filings secret. While the IRS is bound by privacy laws not to divulge, in most cases, a private citizen's tax data, that person can do so on their own if they wish.

Trump obviously wishes not to do so.

Despite some pre- and post-election feints about eventually — maybe, some day, perhaps, or not, because still audits — making his taxes public, 45 has essentially decided not to, apparently ever, release his taxes.

In addition to not showing us his taxes during the campaign, Trump also has never revealed the first return he filed after moving into the White House. (Neither has Vice President Mike Pence released his 2017 tax return, although he did reveal his 2015 tax year filing during the 2016 campaign.)

And Trump still can fall back on the specious under audit excuse since as a matter of course, the IRS routinely audits presidential tax returns every single year.

House throws first tax return review punch: Trump is likely to continue the rope-a-dope strategy now that Democrats are in charge of the House of Representatives and making serious noise about getting their hands on Trump's taxes.

Democratic leaders argue that his filings could produce information critical to Congressional oversight into Trump's global business operations and any possible public-private conflicts of interests.

The House Ways and Means Committee Subcommittee on Oversight convened a hearing on Feb. 7 to get expert testimony about proposed legislation and existing laws that could help them acquire Trump's tax returns.

H.R. 1, the first bill introduced by Democrats after taking control of the House in January, contains a provision that would require presidents and vice-presidents to disclose their tax returns.

As far as Trump's taxes, however, the Democrats are relying on a 1924 law that allows for the chair of the House Ways and Means Committee — that's now Massachusetts Democratic Rep. Richard Neal — to make a written request to the Secretary of the Treasury for the returns.

The ability to request returns under this law is not limited to those filed by the occupants of the Oval Office. The W&M chair can ask for any filer's taxes and the law says the Treasury chief "shall furnish" that information to members of the tax-writing committee for them to examine behind closed doors.

During the Oversight hearing, University of Virginia Law School professor George Yin testified that he doesn't see any "wiggle room" in the law for the Treasury secretary to refuse Neal's request for Trump's returns.

But if the Trump administration refuses the request, Yin said, "We would be in uncharted territory."

More tax and political fights ahead: When Republicans controlled Congress for most of the first half of Trump's tenure, they had the same tax return request ability, but chose not to use it.

In fact, the then GOP led Ways and Means Committee repeatedly shot down Democratic efforts to use the tax return request law.

Now, however, Neal said he plans to request Trump's tax returns.

Once the W&M members get the filings, the full committee could then vote to release the returns to the entire House or provide a summary of their review of the 1040s to their Capitol Hill colleagues.

Trump and his attorneys obviously will fight the request.

Also expect Treasury Secretary Steven Mnuchin to take as much time as he can before handing over Trump's taxes.

Perhaps by Presidents Day 2020, we'll have an idea of what Donald J. Trump has sent to the IRS in recent years.

Or not.

Realistically, Trump's filings could drag out well into the 2020 election year or even beyond his first term. But whatever the timetable, you can be sure that the debate over Trump's taxes is not going away.

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source https://www.dontmesswithtaxes.com/2019/02/presidents-day-2019-trump-tax-return-release-effort-heats-up.html

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