Cecily Zamora
Former US President Donald Trump's tax returns have been the subject of much controversy and legal wrangling since his election in 2016. Breaking with tradition, Trump refused to release his tax returns during his presidential campaign and throughout his time in office, sparking concerns about potential conflicts of interest and prompting Democratic lawmakers to take legal action to obtain the documents. After years of legal battles, Trump's tax returns were finally released by the House Ways and Means Committee in December 2022, providing insight into his complex finances and business dealings. The returns showed that Trump paid relatively little in federal taxes during his presidency and raised questions about his image as a successful entrepreneur. The release of the returns also sparked political backlash and threats of retaliation from Trump and his Republican allies.
| Characteristics | Values |
|---|---|
| Date of lawsuit | July 2019 |
| Plaintiff | House Ways and Means Committee |
| Defendant | U.S. Treasury Department and Internal Revenue Service |
| Reason for lawsuit | Treasury Secretary Steven Mnuchin refused a legal request for Trump's tax records and defied two congressional subpoenas |
| Outcome | Trump's tax returns were released in December 2022 |
| Details of tax returns | Trump paid relatively little in federal taxes before and during his presidency; he reported $78 million in gross income from 16 foreign countries in 2020 |
| Other lawsuits | EPIC v. IRS I and II, lawsuit by Trump against New York officials, lawsuit by House Ways and Means Committee against Trump administration |
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What You'll Learn
House Ways and Means Committee releases Trump's tax returns
On December 30, 2022, the House Ways and Means Committee released six years of former President Donald Trump's tax returns, which showed he paid relatively little in federal taxes in the years before and during his presidency. The release of the tax returns came after years of legal battles and speculation about Trump's wealth and financial entanglements.
The House Ways and Means Committee had voted to make the thousands of pages of federal returns public in a party-line vote. However, their release was delayed while staffers redacted sensitive personal information, such as Social Security numbers, from the documents. The release included both personal and business records, offering new insight into Trump's business dealings and further undermining his long-cultivated image as a wildly successful businessman.
The tax returns showed that Trump often reported heavy losses from his ventures, even as he continued to cash in on assets he inherited. In 2018, after a decade in which Trump declared no taxable income, he reported taxable income of more than $24 million. He paid nearly $1 million in federal taxes, nearly the entire total he paid during his presidency. Trump's history of inheriting wealth and then losing it was previously chronicled by The New York Times in 2020, when it obtained decades of his tax information.
The release of the tax returns drew rebukes and threats of retaliation from Trump and his Republican allies in Congress. Trump blasted the release in a statement, saying that the Democrats should have never released the returns and that it would lead to "horrible things" for many people. He also maintained that the returns showed how "proudly successful" he had been and how he had been able to use depreciation and various other tax deductions as incentives for creating jobs and enterprises. The panel's top Republican, Rep. Kevin Brady of Texas, called the release of the documents "unprecedented" and said that Democrats had unleashed "a dangerous new political weapon."
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Trump sues to prevent the release of his tax returns
In 2016, Donald Trump refused to release his tax returns after being elected president for the first time, despite promising to do so during his campaign. This sparked years of legal battles and speculation about his wealth and financial entanglements.
In 2019, a Democratic-led U.S. House of Representatives panel filed a lawsuit in federal court demanding Trump's individual and business tax returns from 2013 to 2018. The lawsuit was filed against the U.S. Treasury Department and Internal Revenue Service (IRS) after Treasury Secretary Steven Mnuchin refused a legal request for the records and defied two congressional subpoenas. The House Ways and Means Committee, led by Chairman Richard Neal, believed that the administration's refusal to comply with the request was an attack on Congress's authority to conduct oversight.
Trump's attorneys responded that the lawsuit was an act of ""presidential harassment," and Trump himself continued to claim that his tax returns were under IRS audit, preventing their release. However, in 2022, the U.S. House Ways and Means Committee obtained and released six years of Trump's tax returns, covering 2015 to 2020. The release of these documents revealed Trump's complex finances, including his personal and business dealings, and undermined his image as a successful entrepreneur.
The disclosure of Trump's tax returns sparked strong reactions from both sides of the political aisle. While Democrats highlighted potential conflicts of interest and broken campaign promises, Republicans denounced the release as a partisan attack and threatened to retaliate by disclosing tax returns of Democratic politicians.
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Judge dismisses Trump's lawsuit against New York
In December 2021, former US President Donald Trump filed a lawsuit against New York Attorney General Letitia James, seeking to stop her office's investigation into his and the Trump Organization's financial dealings. The lawsuit also sought to interfere with the related state court proceedings. Trump's lawsuit was dismissed by a federal judge from the US District Court for the Northern District of New York.
Attorney General Letitia James issued a statement following the dismissal, asserting that the courts had repeatedly made clear that Trump's baseless legal challenges could not impede the lawful investigation into his and the Trump Organization's financial dealings. She emphasized that no one, including the former president, is above the law, and her office would continue its investigation undeterred.
The investigation by Attorney General James began in early 2019, with public litigation starting in August 2020 to support her subpoenas. The civil investigation and subsequent lawsuit, New York v. Trump, alleged that individuals and business entities within the Trump Organization engaged in financial fraud. Specifically, they were accused of presenting vastly disparate property values to potential lenders and tax officials, violating New York Executive Law § 63(12).
The trial, which took place from October 2023 to January 2024, resulted in Judge Arthur Engoron ordering the defendants, including Trump and his three children, to disgorge a total of $364 million in ill-gotten gains, among other penalties.
Separately, Trump has also faced scrutiny over his refusal to release his tax returns after being elected president in 2016, despite promising to do so during his campaign. In 2022, the House Ways and Means Committee obtained and released six years of his tax returns, revealing that he paid relatively little in federal taxes before and during his presidency. Trump blasted the release, claiming it would lead to "horrible things."
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House Ways and Means Committee sues Treasury and IRS
On July 2, 2019, the House Ways and Means Committee filed a lawsuit in federal district court in Washington, D.C., to obtain copies of Trump's tax returns from the Treasury Department and the Internal Revenue Service (IRS). The committee had previously requested the returns under Internal Revenue Code Section 6103(f), which mandates that the Treasury Department "shall furnish" any tax return requested in writing by the Ways and Means Committee. However, the Treasury Department refused to comply, prompting the committee to issue a subpoena, which was also denied.
The lawsuit named as defendants the Treasury Department, the IRS, Treasury Secretary Steven Mnuchin, and IRS Commissioner Charles Rettig. The legal complaint alleged that the defendants had denied a Section 6103(f) request in order to shield President Trump's tax return information from Congressional scrutiny. It further argued that the defendants' refusal to comply with the statute constituted an extraordinary attack on the authority of Congress to obtain information needed to conduct oversight of Treasury, the IRS, and the tax laws.
President Trump filed a motion to intervene and was added as a party to the case. He and the Treasury Department, represented by the Department of Justice (DOJ), moved to dismiss the case. On November 6, 2019, the district court heard oral arguments, but further proceedings were delayed pending a decision by the D.C. Circuit Court of Appeals in the McGahn case, which was settled in July 2021.
Under the new Biden Administration, the DOJ's Office of Legal Counsel reversed its position and instructed the Treasury Department to provide the Trump tax returns to the House committee. On August 5, 2021, the district court dismissed the claims of the Ways and Means Committee against the Treasury at the request of both Congress and the Treasury Department. However, former President Trump filed counterclaims to block the release of his tax returns to the committee. The committee and the Treasury Department moved to dismiss these counterclaims, and on December 14, 2021, the district court dismissed Trump's counterclaims but delayed the production of his tax returns to Congress.
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Trump's tax returns show little federal tax payment
On February 15, 2023, the House Ways and Means Committee released six years of former President Donald Trump's tax returns, which revealed that he paid relatively little in federal taxes in the years leading up to and during his presidency. This disclosure brought an end to years of legal battles and conjecture.
Trump's tax returns revealed that he had numerous foreign bank accounts between 2015 and 2016, including in China, the United Kingdom, St. Martin, and Ireland, a well-known tax haven. In 2016 and 2017, he only paid $750 in federal income taxes, and in 2020, he reported earning $133,173 from an unspecified book but paid a ghostwriter $44,201, leaving him with about $89,000 in income. Trump's tax avoidance practices allowed him to pay "about $400 million less in combined federal income taxes than a very wealthy person who paid the average for that group each year."
The release of Trump's tax returns was the result of years of legal battles and speculation. After Democrats gained a majority in the House of Representatives in 2018, Trump sued to prevent the release of his tax returns by the IRS or his accountants, which were being sought by state officials and congressional committees. In February 2021, Trump's accounting firm, Mazars, provided the District Attorney with eight years of Trump's tax returns.
In addition to the legal battles over Trump's tax returns, there have also been lawsuits alleging financial fraud within the Trump Organization. New York Attorney General Letitia James began investigating the organization in 2019, alleging that individuals and business entities within the Trump Organization engaged in financial fraud by presenting vastly different property values to potential lenders and tax officials. The trial took place from October 2023 to January 2024, resulting in a ruling ordering the defendants to disgorge a total of $364 million in ill-gotten gains.
The public release of Trump's tax returns and the subsequent revelations about his tax avoidance practices and foreign bank accounts have raised concerns about potential conflicts of interest and the impact on the national interests of the United States. The investigation into the Trump Organization's financial fraud further underscores the legal and ethical complexities surrounding Trump's financial dealings.
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Frequently asked questions
After years of legal battles and speculation, the House Ways and Means Committee released six years of Trump's tax returns on December 30, 2022. Trump had controversially refused to release his tax returns after being elected president in 2016, despite promising to do so during his campaign.
The returns showed that Trump paid relatively little in federal taxes in the years before and during his presidency. They also revealed that Trump and his wife, Melania, reported $78 million in gross income from 16 foreign countries in the 2020 tax year. Additionally, the returns suggested that Trump violated his campaign promise to donate his salary as president in 2020.
Yes, there were several. Firstly, a whistleblower complaint was filed in July 2019, alleging that Treasury officials interfered in the audit process for Trump's tax returns. Secondly, the Manhattan District Attorney's Office obtained several years of Trump's tax information, leading to a criminal probe into the Trump Organization for alleged tax fraud and hush-money payments. Thirdly, New York Attorney General Letitia James initiated a civil investigation and lawsuit, "New York v. Trump," alleging financial fraud by the Trump Organization and several individuals, including Trump and his children. This resulted in a trial from October 2023 to January 2024, with the defendants ordered to pay a total of $364 million in penalties.
Yes, there were additional lawsuits filed by a group called EPIC (Electronic Privacy Information Center). They filed multiple Freedom of Information Act (FOIA) requests and lawsuits seeking Trump's tax records and agreements with the IRS.
