Democrats’ bid to seize President Donald Trump’s tax returns will come with some serious legal risk to themselves.
Lawmakers are concerned that, even if they get the president’s filings, his returns will still be protected by strict confidentiality laws — it is a felony, punishable by up to five years, to improperly disclose private tax information.
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There are ways around the dilemma, and Democrats intend to make at least some information about Trump’s taxes public — that is much of the point of their entire effort. But that probably won’t happen right away. Lawmakers say they will likely take some time to examine his filings behind closed doors before making anything publicly available.
That means there will be a period, possibly lasting months, when Democrats will have finally seen the president’s long-hidden taxes — and they will be inundated with questions about what’s in them — but they won’t be able to talk about them. If they let anything slip, Republicans will surely jump, demanding an investigation by the Justice Department.
“We’re going to have to be circumspect in terms of the way we handle this,” said Rep. John Larson (D-Conn.), a senior member of the House Ways and Means Committee. “That’s the responsibility of every member.”
It’s a risk that’s been barely acknowledged in the battle over Trump’s returns, though it is one reason why Democrats have taken so long to formally request them.
Of course, Democrats have to get the returns first, and they’re a long way from that. Ways and Means Chairman Richard Neal (D-Mass.) demanded this week that the administration turn over six years’ worth of Trump’s individual and business tax returns, giving them a deadline of April 10.
The administration has indicated it plans to fight the demand in court.
“From what I understand, the law is 100 percent on my side,” Trump said Friday.
That Democrats may have to keep Trump’s taxes secret for a time has been largely overlooked in the debate over the returns, probably because of a misconception of how the law Democrats are tapping works.
They are relying on a statute that allows the heads of Congress’s tax committees to examine anyone’s confidential taxes. Advocates of the effort emphasize that the law says the Treasury Secretary “shall” hand over any requested returns.
But that’s just the question of whether the administration must give up the documents — even if Trump’s returns are handed over, they will still be protected by privacy laws. Making them public will be a separate matter.
Experts say lawmakers can do that by essentially having the Ways and Means Committee vote in a closed session to release them.
Though Democrats haven’t worked out exactly how they’ll proceed, there’s likely to be some time between when they receive the returns and when they consider divulging them.
There seems to be a “false presumption” that lawmakers will simply release the returns the moment they get them, said Rep. Lloyd Doggett (D-Texas), another Democratic tax writer who has helped lead the push to get the president’s returns.
“There is a need for a thorough review of them to see if there’s anything in them that justifies releasing them and that’s something that could take awhile to do because they are, according to the president, very complex,” he said. “I hope it’s not months, but I don’t think it will be days.”
“Until such time as that review is complete and a vote is taken to forward them to congress and the public, they will be protected.”
Democrats may want to redact certain information from the returns. Trump’s filings could reveal private information about other people he’s in business with who are of little interest to lawmakers, for example.
Tax veterans say the period between when Democrats get Trump’s returns and if and when they release something will be stressful for lawmakers, given the criminal penalties for even inadvertent disclosure. Democrats won’t be able to discuss even basic things about Trump’s returns, like how much he paid in taxes, what he reported earning or if he gave to charity.
“When we’ve had members in these situations before, we frequently have members say, ‘I don’t know if I want you to tell me or not, because I don’t know if I can trust myself not to say anything,’” said Rick Grafmeyer, a former deputy head of the bipartisan Joint Committee on Taxation and expert on taxpayer privacy laws.
Tax writers typically use their power to examine private tax returns to help inform the policymaking process. If they are trying to write legislation outlawing a corporate tax shelter, for example, they might look at an individual company’s tax documents to better understand how the dodge works.
Some say Democrats’ situation will be tougher than what most lawmakers deal with when it comes to taxpayer secrecy rules. Everyone will likely know Democrats have Trump’s returns and lawmakers would be besieged with questions from reporters, constituents and other lawmakers. That’s a lot different than when lawmakers quietly examine an oil company’s tax return.
Also, the Ways and Means Committee is loaded with new members who aren’t steeped in the intricacies of the tax secrecy rules — the closest analogue many say is when lawmakers received classified intelligence briefings.
“I’m sure that there will be briefings about all the ethical issues that surround this,” said Larson.
Many of the details of how exactly Democrats would handle the returns have not been worked out.
Neal could keep Trump’s documents to himself and a few close aides — and not even let other members of his panel see them. He has already said he won’t share the returns with any other committees, including the Judiciary and Oversight panels, which have been conducting their own high-profile investigations of the administration.
That would keep the circle of people who’ve seen Trump’s taxes tight — and the more people who see the returns, the more likely there will be leaks.
But many of his colleagues have been clamoring for the president’s returns for months, and will surely be unhappy to learn they won’t be able to examine them.
Another option: Lawmakers turn the filings over to the JCT and ask its staff of tax experts to analyze Trump’s returns and report back on what they find.
“They’re going to have to think carefully about how they’re going to want to do this,” said Dean Zerbe, a former Senate tax aide. “The penalties are certainly quite real.”
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