As someone who while updating the Saltzman and Book treatise can spend hours on a footnote massaging a development relating to some obscure aspect of the mindnumbing complexities of Section 6103, I smirked last night listening to national reporters cite the Code section and discuss whether Democratic control of the House means that President Trump’s federal income tax returns will finally see the light of day.
Before I discuss that (and point readers to some excellent discussions of the issue), it is noteworthy that there has not been a leak of those returns, a testament I think to the professionalism of the IRS and the strong culture of confidentiality that agency employees afford to confidential tax return information. And while we try to steer clear of politics on Procedurally Taxing, I am pretty skeptical about the public’s interest (but not the public interest) in the issue: case in point was the resounding thud that accompanied the outstanding article in the NY Times investigating the Trump family’s efforts to transfer considerable wealth from the President’s father to the President and his siblings while paying as little transfer taxes as possible and using tactics that went well beyond the norms associated with acceptable estate planning.
To the issue of the day. Here is Section 6103(f)(1):
Upon written request from the chairman of the Committee on Ways and Means of the House of Representatives, the chairman of the Committee on Finance of the Senate, or the chairman of the Joint Committee on Taxation, the Secretary shall furnish such committee with any return or return information specified in such request, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.
Under Section 6103(f)(4)(A), any return submitted to one of the tax committees mentioned in (f)(1) may then be released to the full House or the Senate, or both. Professor George Yin has been in front of this issue, and in a 2015 article in the Tax Lawyer he suggests that this effectively allows for public release of the returns, assuming that there is some legitimate legislative purpose associated with the inquiry.
Professor Andy Grewal has addressed some of these issues in two posts on the Notice and Comment blog; his first post in 2017 notes that the President may have a constitutional defense to releasing the returns along the lines that an inquiry for purely political purposes may exceed the legislature’s exercise of its legitimate powers. In a post last month Professor Grewal raises the President’s possible use of Section 6103(g) in revenge to obtain tax returns from members of Congress (many of whom have not made their tax returns public).
There is very little law associated with these provisions. That is about to change. A number of Democrats in the House have publicly said that if they took control of the House they would press for release of the returns. In today’s partisan times, it is difficult to see someone from the other side of the aisle doing things for anything but partisan interests. As Professor Grewal notes, all of this is a bit unseemly, and to some extent the public confidence in the tax system, which depends in no small part on the belief that the tax system is not political, is likely to be the big loser when all is said and done.