The long-held but unchallenged legal assumption that a president can’t issue pardons for federal civil infractions, including tax penalties and fines, may end up before the Supreme Court, some tax professors say.
“If the president tried to issue a self-pardon for tax liabilities, there would be arguments on both sides as to whether the pardon were valid,” said Daniel Hemel, a professor at the University of Chicago Law School. “And if the IRS sought to assess and collect anyway, no one can say for sure how a court would ultimately rule.”
Legal interpretation may soon give way to judicial decision, if a departing President Trump issues himself a pardon for past and current federal tax offenses. Trump hasn’t been charged with any tax offense, although he often mentions he’s under audit by the IRS, and his businesses are disputing an estimated $72.9 million tax deduction disputed by the agency (first reported in September by The New York Times). For such a pardon to be challenged, the IRS or the Justice Department would need to pursue a pardoned offense, and the president’s lawyers would have to cite the pardon as his defense, tax law professors agreed.
Article II of the Constitution grants the president power to pardon “offenses against the United States” — “offenses” is usually interpreted as crimes, and the “United States” means federal offenses, not any against states, noted Georgetown University Law professor Brian Galle.
No one disputes that the president can’t pardon state offenses. But Hemel pointed to legal research by Yale Law School lecturer Noah A. Messing in 2016, “A New Power?: Civil Offenses and Presidential Clemency,” which argues that the civil scope of the president’s pardon powers has never been thoroughly defined by courts and may already include the power to excuse civil infractions as well as crimes.
“Noah's article is exhaustive,” Hemel said. “I don't think his is the only conclusion one can draw from the evidence, but that article is certainly the place to start.” Messing could not be reached for comment.
Galle, for one, is unconvinced. “I find [Messing’s] article almost totally unpersuasive, making fast and loose use of historical examples, describing them in murky ways that allow him to interpret them however he wants, and ignoring the absurd implications of his arguments,” he said.
But Harvard University’s Laurence H. Tribe told Tax Notes that, while he’s unfamiliar with Messing’s research, he “wouldn’t want to opine either way on whether the pardon power can properly be construed to extend so far as to extinguish civil liability to the United States.”
‘Confusion Is Understandable’
“Whatever confusion exists in the tax professional community [about the extent of the pardon power] is understandable but, well, confused,” Tribe said.
The stakes in a presidential self-pardon could be high, both for the federal fisc and for Trump. “If [Trump] self-pardons and includes the IRS audits, our understanding is that he prevents any charges being raised by IRS Criminal Investigation,” said Stephen F. Mankowski of the National Conference of CPA Practitioners. David Frum, a staff writer at The Atlantic and former speechwriter for President George W. Bush, estimated that, including penalties and interest, Trump could now be on the hook to the IRS for more than $100 million in overall tax expenses.
One of the few Supreme Court cases to explore the limitation of the power to pardon criminal offenses, Ex Parte Grossman, 267 U.S. 87, was decided in 1925, Galle observed. That court ruled, “The contention that to admit the power of the President to pardon criminal contempts (not to interfere with coercive measures of the courts to enforce the rights of [civil] suitors)” would compromise an independent judiciary and the separation of powers “is considered and rejected.”
Tribe said civil tax reimbursements, with interest, of amounts improperly withheld from the treasury can't be pardoned. “However, civil fines and penalties that, but for labels and the standard of proof and level of stigma, might have been deemed criminal, might be in a different category,” he said.
Galle noted that while section 7217 prohibits the president from ordering the IRS to “terminate an audit or other investigation,” he added, “I suppose if one thought that the pardon power covers civil liabilities, that statute could be unconstitutional.”
But criminal tax penalties already levied and paid probably can’t be pardoned and refunded, said Kimberly Wehle, a professor at the University of Baltimore Law School. The Supreme Court held in Knote v. United States, 95 U.S. 149 (1877), that an already-paid but pardoned criminal penalty could not be refunded except by an act of Congress, she noted.
Brian C. Kalt, a professor at Michigan State University College of Law, noted that the Obama administration considered — but ultimately rejected — the idea of issuing pardons to undocumented immigrants for civil immigration violations.
Wehle said: “The question is really about consequences: If Trump pardoned himself, would DOJ later indict?” Would the IRS try to pursue tax cases the president had pardoned, and would a pardon cover noncriminal offenses? she asked.
“The Supreme Court has said relatively little about the pardon power, but most scholars believe that it’s very broad,” Wehle said.
Time for Some Pardon Rules?
Tribe said he doesn’t believe Trump has the power to pardon himself, but recognizes the issue will probably end up before the Supreme Court.
Some legal scholars believe a presidential pardon needs to be specific about the crimes it’s absolving, Tribe observed. But President Washington issued broad pardons to participants in the late-18th-century Whiskey Rebellion, President Johnson pardoned Confederate rebels in the 19th century, and President Ford pardoned President Nixon for any and all offenses he might have committed during his presidency, Tribe noted.
The president can pardon tax crimes. President Clinton pardoned donor Marc Rich, who had fled the country over tax evasion charges, noted Frum. “The president certainly has power to pardon the crime of tax evasion by others,” Frum told Tax Notes. “The Supreme Court will someday tell us whether he can pardon tax evasion [for] himself.”
But Tribe added, “Overdue taxes or civil penalties would not be erased by any possible pardon, whether by the president himself, or by the vice president as acting president should the president be sidelined” by incapacity under the 25th Amendment, or if the president resigns and gets pardoned by the newly installed former vice president before the expiration of their terms.
The presidential pardon only precludes criminal prosecution and conviction for the pardoned offense, Tribe said. It doesn’t preclude civil pursuit of the offender or collection of sums due the U.S. treasury, he said. It also doesn’t apply to civil litigants who are creditors of a pardoned ex-president, he added.
Kalt said he doubts that a Trump presidential self-pardon — and the consequent mooting of any federal tax claims against him — would cool the public ardor for seeing his returns.
It’s also unclear what accepting a pardon means for its recipient in future legal matters — especially if that recipient is also the pardon grantor.
“The whole business of what, if anything, the pardon recipient implicitly admits by accepting the pardon is quite murky and disputed,” Tribe said. “At minimum, it’s clear that any implicit admission of guilt inherent in accepting a pardon cannot be pleaded as a confession or guilty plea might be in another proceeding.”
Former IRS Commissioner Lawrence Gibbs said, “I would think there is or ought to be some definition — either by statute, other rule of law, or past precedent — of the type of conduct to which a presidential pardon can be effected.”