Former president Donald Trump was the first president in more than sixty years who did not make public his tax returns. During the 2016 campaign he maintained that he was under an IRS audit and couldn’t disclose them until the audit was completed. The IRS disputed the contention that these two things were mutually exclusive, and stated that Trump could voluntarily release them. Trump said he would after the election, but in fact, he not only didn’t, he fought tooth and nail through the courts, to include two trips to the Supreme Court to keep law enforcement and congressional committees from seeing them.
A fair question is why publishing any presidential candidate’s tax returns is so important? For one, a president in pursuing tax legislation might have real conflicts of interest, especially if the president seeks special exemptions, deductions or treatment that would be of substantial benefit to him. The voters should have this information along with the release of medical records to help cast an informed ballot. Neither are necessarily the sine qua non of how most voters choose their candidate, but this information is helpful along with everything else that can be dug up on the internet today.
It baffled me that so many Trump supporters agreed with Trump that he shouldn’t have to disclose his tax returns. By itself, nothing else being considered, I can understand the argument---even if I disagree with it---that it’s not anyone’s business. Yet the same defenders, to include Trump himself, were insistent that Barack Obama release not only his long form birth certificate, but also his grades from college and law school, and his draft records. Hypocrisy reigns supreme here, though, because Trump refused to release his college transcripts, and according to his former lawyer, Michael Cohen, he even threatened his alma maters with lawsuits if they dared release this information.
Last week Trump lost his latest, and perhaps his last battle in the Supreme Court to keep the Manhattan (New York County) District Attorney from subpoenaing his tax records held by his third party accountants. The DA is looking into tax fraud involving overvalued assets for loan purposes, undervalued (same) assets for tax purposes, insurance fraud, and more. The DA has put together a team of tax experts, forensic accountants, lawyers and investigators, to examine not only Trump’s returns, but also a myriad of financial records. Presumably, if the U.S. Attorney’s Office in the Southern District of New York (Manhattan) isn’t already conducting its own tax investigation, the DA will turn over any information, which is standard procedure, that indicates violations of federal law.
Probably one common denominator shared by most Americans that crosses party lines, is the ire one holds concerning friends, neighbors, business and social acquaintances---and even relatives---who tacitly or openly boast about how they cheat or manipulate reporting their taxes while they play by the rules. The IRS relies heavily on these disgruntled people for tips. Perhaps there will be a change of heart concerning how Trump’s supporters feel about these tax investigations once information can be made public.
I wouldn’t feel sorry for Trump or any other public figure of his stature, regardless of political party, if they intentionally cheat on their taxes. They have the benefit of so many loopholes created by wealthy donors like themselves who give lavishly to politicians, and they can afford to hire the best tax lawyers to defend them.
In the early 1980s, when I lived in New York, I owed the IRS $1,708. I got a banker’s check and sent it in with my return. A few months went by and the IRS sent me a letter saying that I owed $1,708. Confused, I called the IRS. A woman said that the check was not included with the return, and that interest and penalties were adding up. This didn’t make sense, and I provided the IRS with the banker’s check copy. Time passed and the IRS sent me increasingly threatening letters, to include putting a lien on my house.
Almost a year passed, and I sent the IRS a second banker’s check. Shortly afterwards I got a call from the IRS saying that they had found the original check. I asked where it had been located. The woman said that I had attached it to the top of my Form 1040 instead of the lower two thirds of the eight and one-half by eleven inch piece of paper, and that I still owed interest and penalties.
I lost it with this woman, and about fifteen minutes later someone with some sense called me to say that I would not have to pay the interest and penalties. My point in telling this story is that I did not have the resources to fight the IRS, and for a relatively small amount of money they were going after me with a vengeance.
A little internet research dug up the following from an April 2, 2019 CBS report:
- “Americans in poor, rural counties are more likely to be audited by the IRS than taxpayers in richer areas.
- The most audited county in the U.S. is Humphreys County, Mississippi, where median household annual income is $24,000.
- Higher audit rates in poor counties stem from the IRS targeting taxpayers who claim the Earned Income Tax Credit.
- Nine of the 10 most audited counties in the U.S. are in Mississippi.”
Trump is an exception to going after the low hanging fruit by the IRS. I assume he will be treated fairly and that the investigation(s) will be equally fair. Fortunately for him, he will be able to fight whatever civil or criminal proceedings ensue unlike most Americans. This is long overdue.