Trump’s Tax Returns
The Mueller Report is complete. Liberals did not hear what they wanted to hear so they are waging a different type of battle. The battle will likely drag the 2016 election out, for what seems like an eternity, in some apparent misguided effort to turn back time and reverse the election results of that November night over 2 years ago.
The new battle centers on Donald Trump’s tax returns.
The tax return conundrum and the demand that the President release his tax returns has exploded in both the New York State Senate and the US House of Representatives.
The New York Senate has cleverly attempted to circumvent the confidentiality of the tax return by introducing a bill authorizing the release of the returns. New York Senate bill, S2271, requires the disclosure of tax returns by statewide elected officials including the president of the United States. Governor Cuomo has indicated that he would sign the bill.
Not to be outdone, Congressman Neal, D-MA, chair of the Ways and Means Committee, U. S. House of Representatives, stated in a press release “Last month, the Ways and Means Committee began an investigation into the mandatory audit program at the IRS in an effort to assess the extent to which the IRS audits and enforces the federal tax laws against a sitting President and to determine if those audits need to be codified into federal law. As part of that inquiry, on April 3, I requested six years of the President’s personal and business tax returns, pursuant to my authority under section 6103(f) of the IRS Code. I believed then, as I do now, that reviewing the requested documents is a necessary piece of the committee’s work.”
The New York Senate and the US House of Representatives are vainly attempting to politicize the release of tax returns using the average American’s misunderstanding of the tax code to give the false impression of wrongdoing on the part of the president of the United States.
Any CPA, of which I am one, will tell you that there is limited value to viewing someone’s personal tax return if your goal is to get a full picture of an individual’s financial dealings. The nature of tax laws is so complicated that unless one understands all the intricacies of C corporations, trusts, annuities, real estate, subchapter S entities, Limited liability corporations, and partnerships, a review of an individual’s personal tax return will merely give you an unbelievably inaccurate perspective of a person’s financial dealings and holdings. Unfortunately, the tax laws are so complicated that a review of the tax return may actually be misleading in and of itself. Asking for personal tax returns seems reasonable and prudent when in fact it is irrelevant for the most part.
These nuances in tax returns is precisely why financial disclosure forms required by federal officials, including the President, are far more detailed and offer a much more comprehensive look at a person’s financial dealings, interests, and potentials for conflict. The President has complied with all such financial disclosures but that does not make good press for those seeking headlines.
The tax return controversy surrounding the liberals demand of President Trump center on two critical issues – confidentiality, and transparency.
The first important issue to consider is that the tax return is confidential for every American not just the President of the United States. For the IRS, Department of the Treasury, or a state to release it without the appropriate laws in place which compel a release may be criminal. The governing law is 26 U. S. Code section 6103. As a CPA, should I release a client’s tax returns without proper authorization or legal action, I would be subject to disciplinary action and civil suit (section 1.700 of the AICPA Code of Professional Ethics).
There are some who site a 1924 law which gives Congressional committee chairs the authority to request/demand tax returns but only if there is a legitimate legislative purpose and, if done, would be done in a closed executive session. There is a substantial body of thought which believes that the Supreme Court will have to answer this question.
The second is that any public official in federal service is required to provide a comprehensive financial statement for public scrutiny. The President’s financial statement is over 92 pages long excluding attachments. It is extraordinarily thorough and provides substantially more information that any tax return would possibly disclose.
The unintended consequence of all of this hoopla relating to President Trump’s tax return is that it is merely a distraction. It is a distraction that the president knows is meaningless. Many people have contended that there have been decades of precedent in which former candidates for the presidency and former presidents have released their tax returns. Perhaps they released their returns because they knew it was of little to no value, it seems to satisfy the public, and they can then move freely without interference from the public they supposedly serve.
Perhaps President Trump is, once again, bursting a myth of transparency because he knows the issue is not real. Perhaps real reform will occur when senseless laws are replaced with ones which really provide protection for the American people. Perhaps the President is merely draining the swamp one more time.
Frank Ryan, CPA, USMCR (Ret) represents the 101st District in the PA House of Representatives. He is a retired Marine Reserve Colonel, a CPA and specializes in corporate restructuring. He has served on numerous boards of publicly traded and non-profit organizations. He can be reached at [email protected].