The House Ways and Means Committee on Tuesday voted 24 to 16 to release former president Donald Trump’s tax returns, capping a protracted legal and political battle that began when Trump was in the Oval Office.
After the vote, the committee revealed that the Internal Revenue Service did not audit Trump’s returns during his first two years in office, despite a rule mandating such reviews, and never completed any audits while he served.
The IRS began its first audit of Trump’s returns on the same day that Ways and Means Committee Chairman Richard E. Neal (D-Mass.) sent a written request in April 2019 for the information and then assigned the bulk of the work to just one agent, the panel said.
Democrats on the committee said their investigation suggests Trump had not been correct in claiming during his 2016 campaign that he could not release the records himself because of an ongoing IRS audit. They also urged Congress to adopt a new law ordering mandatory IRS reviews of presidential taxes and the public release of some information.
That IRS’s inaction came despite the fact that Trump’s tax forms raise serious questions about how he used deductions to avoid paying taxes in some years, according to a separate report released on Tuesday by the Joint Committee on Taxation.
Rep. Lloyd Doggett (D-Tex.), a member of the Ways and Means Committee, said in a CNN interview that the returns showed there were “tens of millions of dollars in these returns that were claimed without adequate substantiation.”
It was not possible to immediately verify the Democrats’ allegations because the returns have not yet been released to the public. They are expected to be released in coming days after sensitive information such as Social Security numbers are redacted.
Trump’s campaign rebuked the committee’s vote as a politically motivated attack.
“This unprecedented leak by lameduck Democrats is proof they are playing a political game they are losing,” his campaign said in a statement. “If this injustice can happen to President Trump, it can happen to all Americans without cause.”
Trump’s Republican allies warned that Congress making the former president’s returns public after he has left office would violate separation of powers.
“Let me be clear: Our concern is not whether the president should have made his tax returns public, as is traditional, nor about the accuracy of his tax returns,” Rep. Kevin Brady (R-Tex.) said Tuesday shortly before the Ways and Means Committee meeting began. “Our concern is that, if taken, this committee action will set a terrible precedent that unleashes a dangerous new political weapon that reaches far beyond the former president.”
In its investigation, the Ways and Means Committee homed in on a little-known provision in the IRS’s internal rules that has mandated tax audits for sitting presidents since 1977. The panel found that the program was effectively dormant under the Trump administration.
And after the IRS started an audit in 2019, Trump took steps to try to slow it down, such as seeking information under the Freedom of Information Act, “failing to provide all the facts needed” and other measures. The IRS’s shortage of needed employees also slowed down the audit, the report said.
The release of Trump’s tax information is the most sweeping such action taken by Congress in a half-century. A similar action involving a president has not occurred since 1973, when the IRS turned over President Richard M. Nixon’s tax returns to a congressional committee.
The IRS handed over the Nixon tax returns on the day that Congress requested them, a fact noted by House Democrats who were seeking the Trump documents. Republicans denied any similarity, The Washington Post has reported, noting that Nixon requested the investigation into his returns, while Trump fought such a probe.
Although the committee did not release Trump’s tax documents, its summary report reveals striking details from the records.
The committee said that the tax forms show Trump and his wife Melania’s financial condition fluctuated wildly during their time in the White House. The couple reported more than $30 million in losses each of the two years before he entered office, but more than $24 million in income during his second year in office before running into the red again, according to the report.
The Trumps reported losing $31.7 million in 2015, $32.2 million in 2016 and $12.8 million in 2017, according to information provided by the committee. But they reported $24.4 million in 2018 income and $4.4 million in 2019 income, before losing $4.7 million during his last full year in office, 2020, according to the tax committee’s report.
The amount of taxes they paid fluctuated, too, peaking at $2.1 million in 2018 but dropping to $271,973 in 2020, according to the report. The average federal taxes the pair paid over the six years examined by the committee was $739,327, according to a Post analysis of the figures. By claiming millions in deductions, the Trumps reduced the net federal income taxes they paid to $750 in 2016 and 2017 and $0 in 2020, according to the report.
Committee members raised concerns about a wide array of credits and deductions the Trumps claimed on their taxes, including those for charitable contributions, debts, business expenses and conservation easements on his golf courses and other properties, including the Seven Springs estate in New York.
The report said that the IRS had begun to examine a number of these items, such as tax credits the Trumps claimed related to his development of the Trump International Hotel in downtown D.C. (which became a Waldorf Astoria after its sale in May) and a $21 million payment the Trumps made to settle fraud claims against his online school, Trump University.
Committee members and other Democrats on Tuesday said their reports show the need for financial transparency from presidents.
“The American people want to have trust that the most powerful individual in this country, who has vested in them all the powers of the executive branch, is making decisions based on the interest of American people and not their own self financial interest,” Rep. Jimmy Gomez (D-Calif.) said in an interview.
After the vote, House Speaker Nancy Pelosi (D-Calif.) said she planned to take action on the recommendation for a new law mandating IRS audits of presidents.
“The Ways & Means Committee’s report makes clear the legislative steps that must now be taken to guard the public trust, and we will move swiftly to advance Chairman Richard Neal’s legislation requiring the Internal Revenue Service to conduct an annual audit of the President’s finances,” Pelosi said in a statement.
The vote on Tuesday came after a lengthy closed session. For the sake of transparency, committee members voted by unanimous consent to make public a transcript of the session afterward.
Neal first sought to obtain Trump’s tax returns in 2019 after Democrats retook the House majority. Democrats argued that Congress needed to do so to evaluate the effectiveness of annual presidential audits and for the sake of oversight.
Trump — who broke with a decades-long tradition of presidential candidates and presidents by refusing to make his tax returns public — has for years falsely claimed that he could not release them while under “routine audit” by the IRS.
Trump has faced scrutiny over his tax records for decades. The Post and other organizations have previously reported that Trump had paid little or no federal income taxes in the earlier years of his career. The Post wrote in its biography, “Trump Revealed,” that Trump paid no income taxes in 1978 and 1979, using tax deductions such as real estate depreciation that enabled him to claim a negative income of $3.8 million.
When 2016 Democratic presidential nominee Hillary Clinton noted in a debate that Trump did not pay federal income taxes for those two years, Trump responded, “That makes me smart.” Then when Clinton speculated that Trump might not have paid “any federal income tax for a lot of years” — which turned out to be the case — Trump said the government would have “squandered” the money.
During his campaign for president, in which he frequently boasted that he was an extraordinarily wealthy and successful tycoon, Trump said that he would release his “beautiful” tax returns to back up his claims. But he said he would not make them public while he was being audited.
The legal battle between Trump and the Ways and Means Committee played out in the courts for years, continuing even after Trump left office. But last month, the Supreme Court cleared the way for the House committee to examine Trump’s tax returns, without stating a reason for denying Trump’s request to withhold the records.
“We knew the strength of our case, we stayed the course, followed the advice of counsel, and finally, our case has been affirmed by the highest court in the land,” Neal said in a statement then. “Since the Magna Carta, the principle of oversight has been upheld, and today is no different. This rises above politics, and the Committee will now conduct the oversight that we’ve sought for the last three and a half years.”
Still, federal judges have consistently ruled that lawmakers established the “valid legislative purpose” required for disclosure. The Supreme Court’s decision late last month came after Trump announced he would run for president again in 2024.
In arguing against the release of the tax records, Trump’s legal team said the committee’s premise for seeking the information “has nothing to do with funding or staffing issues at the IRS and everything to do with releasing the President’s tax information to the public.”
Their filing adds: “If allowed to stand, it will undermine the separation of powers and render the office of the Presidency vulnerable to invasive information demands from political opponents in the legislative branch.”
Democrats on the Ways and Means Committee in favor of making Trump’s tax returns public have limited time to do so, with Republicans set to take control of the House — and the committee — in January.
Robert Barnes contributed to this report.
correction
A previous version of this article misstated the year the Trumps reported losing $12.8 million. It was 2017, not 2019. The article has been corrected.
