The release marks the most sweeping action taken by Congress in decades.
For the past three years, Democrats have been fighting tooth and nail for the release former President Trump’s tax returns — and now that appears to be coming to fruition. On Tuesday, the House Ways and Means Committee cleared the way for the release of this much-sought-after information that the former president has fought so hard to keep private.
The Democratic-led committee, which is responsible for IRS oversight and writing tax policy, voted 24-16 along party lines to make public six years’ worth of Trump’s financial records. While it will take time for lawmakers to scrub through the documents to redact sensitive information, one thing that’s already standing out is how Trump paid little to no federal income taxes between 2015 and 2020, which included much of his presidency.
But he’s not the only one catching heat: The IRS is being blasted for being “asleep at the wheel” when it came to handling Trump’s audit. “The presidential audit program is broken,” Senate Finance Committee Chair Ron Wyden said in a statement.
As we await the panel to release redacted versions of Trump’s taxes in the coming days, here’s a look at what we know so far based on what has been gleaned from the reports released from the Ways and Means Committee and the nonpartisan Joint Committee on Taxation (JCT).
What did Trump pay in taxes?
Despite earning $400,000 per year as president, Trump paid just $750 in net tax on his income in 2016 and 2017, and he paid nothing in 2020 during his last full year as president.
According to the committee’s report, the former president whittled away his tax bills by reporting big business and personal losses to offset his income — a tactic he utilized even before taking office. In 2015, JCT said that Trump reported making more than $50 million, but this was offset by more than $85 million in reported losses, which seems to go against his carefully cultivated image as a widely successful businessman. That said, Democrats on the panel said in their review that tax authorities failed to properly verify the numbers he reported to ensure accuracy, so these could be estimates.
There were also other areas of interest: Both reports speculate that Trump gave about $46,000 to $51,000 to his three eldest kids — Donald Jr., Ivanka, and Eric — but these gifts are believed to have been disguised as loans to avoid taxation. That’s not all: He also reported more than $1 million in foreign tax credits in 2018 alone.
Why didn’t the IRS audit Trump?
The IRS has been automatically vetting every president’s tax returns for more than two decades — at least until Trump. While there’s no legal requirement for presidential candidates to disclose their taxes, the committee came across a little-known provision dating back to 1977 mandating audits for sitting presidents. But the panel found that this internal protocol was effectively “dormant” during Trump’s first two years in office.
Even though Trump filed tax returns in 2017 and 2018, Democrats say his first (and only) audit didn’t start until 2019 when Ways and Means Committee Chairman Richard Neal wrote a letter asking for them. In the end, only the former president’s 2016 filing was selected to be vetted, but it wasn’t completed by the time he left office in January 2021.
“In the case of the Trump years, there was only one time when the mandatory audit was triggered and that was when Chairman Neal wrote a letter,” Ways and Means Democrat Judy Chu said during a press conference. “There is something clearly wrong here.”
How are Trump and other Republicans reacting?
The release of Trump’s tax information is the most sweeping action taken by Congress in decades, though similar steps were taken in 1973 when the IRS turned over President Nixon’s taxes. But, unlike Trump, he didn’t fight the ensuing probe.
Naturally, this unprecedented move has sparked some fury. Trump condemned Democrats’ vote to release his taxes as a politically motivated attack. Meanwhile, Republicans who are preparing to take over the Ways and Means Committee next year warned it could set a dangerous new precedent.
“Ways and Means Republicans could come out and say, ‘You guys started it. This is both sides-ism.’ And so they’re going to ask for the tax return information on Hunter Biden and Joe Biden and whoever else they want to embarrass,” tax analyst Steve Rosenthal told The Hill.
