George K. Yin is a professor of law and taxation at the University of Virginia and a former chief of staff of the congressional Joint Committee on Taxation.
The ability of Congress to disclose confidential tax information was added to the law almost 100 years ago. Since the Civil War, when it began requiring taxpayers to submit private information to the government to comply with the tax laws, Congress has struggled to balance the privacy interests of taxpayers with the public's right to know. Eventually, Congress decided that tax information should remain confidential except in two situations. First, it authorized the president to determine whether any tax information could be disclosed. And, in 1924, it gave the same power to certain congressional committees.
Congress's right to reveal tax information independent of the president's authority proved extremely important in 1973 and 1974, when President Richard Nixon became entangled in a controversy involving his claim of a sizable charitable deduction for giving his official papers to the National Archives. Nixon initially stonewalled the inquiries, including making his famous statement that "I am not a crook." When the pressure increased, he contended correctly that the IRS had already audited the pertinent returns and not ordered any change.
But a leak subsequently revealed that Nixon, despite having income of more than $200,000, had paid about the same amount of tax as families with incomes under $10,000. Outrage at this revelation eventually led Nixon to seek review of his taxes from the congressional Joint Committee on Taxation, which delegated the task to its respected nonpartisan staff. The staff ultimately found that Nixon owed almost $500,000 in additional taxes over four years — roughly one-half of his net worth at the time. Because of the importance of the matter to the nation, the Joint Committee exercised its authority and voted 9 to 1 (three Republicans joined six Democrats) to release the staff report, including Nixon's confidential tax return information, to the public.
Following Watergate, Congress changed the law to eliminate the president’s ability to order a disclosure. But it retained the right of its tax committees to do so as long as a disclosure served a legitimate committee purpose. Such a disclosure must be in the public’s interest, and today’s understandable concerns about Trump’s potential conflicts of interest would seem clearly to justify a congressional effort to obtain, investigate and possibly disclose to the public his tax information.
Moreover, as illustrated by the Nixon episode, disclosure would serve the additional purpose of assuring the American public that the new president is not receiving preferential treatment from the IRS. In Nixon’s case, there were allegations — eventually included in one of the articles of impeachment against him — that the president attempted to use the IRS for unlawful purposes. In the present situation, repeated attacks on the agency have weakened it and perhaps left it vulnerable to undue influence from higher-ups. Full disclosure could disabuse the public of any concern that the IRS is giving the president a free pass.
Any investigation and disclosure might be made unnecessary if Trump simply took the steps needed to remove even an appearance of a possible conflict of interest. He should consider this option if he remains keen on protecting the secrecy of his tax information.
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