Re­quire tax re­turn dis­clo­sure

Cecil Whig - - OPINION - Ruth Mar­cus

— Politi­cians like to bet that re­porters and their pesky ques­tions will go away. Too of­ten, they’re right. Thus, the drum­beat of de­mands for Don­ald Trump’s tax re­turns faded af­ter he waved it all away with claims that a pend­ing au­dit pre­vented the trans­parency he would oth­er­wise be de­lighted to pro­vide.

With Trump’s de­mur­ral, so, too, sub­sided re­quests for a fuller ac­count­ing from the other re­main­ing pres­i­den­tial can­di­dates. Aside from Hil­lary Clin­ton, they have been un­prece­dent­edly par­si­mo­nious with tax in­for­ma­tion.

A con­flu­ence of events presents an op­por­tu­nity to re­fo­cus at­ten­tion on the miss­ing re­turns. First, Tax Day is upon us, the tra­di­tional time for the in­cum­bent pres­i­dent and vice pres­i­dent to re­lease their tax re­turns — a vol­un­tary act but one that has been prac­ticed by ev­ery pres­i­dent since Harry Tru­man, with the ex­cep­tion of Ger­ald Ford.

Sec­ond, the leak of the “Panama Papers,” the del­uge of doc­u­ments de­tail­ing the off­shore ac­counts of var­i­ous for­eign lead­ers and their rel­a­tives, un­der­scored the value of dis­clos­ing fi­nan­cial in­for­ma­tion, and the wis­dom of a norm in which elected of­fi­cials re­lease their tax fil­ings as a pru­dent mat­ter of course — not in the midst of a po­lit­i­cal firestorm.

In Great Bri­tain, where there is no rou­tine prac­tice of politi­cians mak­ing tax re­turns pub­lic, Prime Min­is­ter David Cameron scram­bled to re­lease six years’ worth af­ter the papers showed that his late fa­ther was the di­rec­tor of an off­shore trust that paid no British taxes. Other British politi­cians — in­clud­ing Labour leader Jeremy Cor­byn, Chan­cel­lor of the Ex­che­quer Ge­orge Os­borne and Lon­don Mayor Boris John­son — fol­lowed suit.

Third, The Wash­ing­ton Post re­ported that, not­with­stand­ing Trump’s claims to have given more than $102 mil­lion to char­ity over the past five years, the list of gifts from his foun­da­tion sug­gests far less in the way of per­sonal phi­lan­thropy — none, ac­tu­ally. Trump’s tax re­turns would fill in the blanks about his ac­tual char­i­ta­ble giv­ing.

Trump is, by far, the great­est of­fender here and, in this area at least, Clin­ton the avatar of full dis­clo­sure. Ted Cruz, John Ka­sich and Bernie San­ders have claimed trans­parency but ac­tu­ally re­leased only the ini­tial, sum­mary pages of their tax re­turns.

This dodge, as my Post col­league Cather­ine Ram­pell has noted, ob­scures all sorts of po­ten­tially sig­nif­i­cant in­for­ma­tion, from amounts and de­tails about char­i­ta­ble giv­ing to pre­cise sources of in­come to their use of var­i­ous tax shel­ters. Vot­ers should not be mis­led by this phony forth­com­ing­ness. Would they ac­cept a pres­i­dent who pro­vided a sim­i­larly flimsy sum­mary?

But Trump’s ob­scu­ran­tism re­mains the most bla­tant and most trou­bling. He re­leased a let­ter last month from his tax lawyers, who de­scribed Trump’s re­turns, since he op­er­ates his real es­tate and other busi­nesses through sole pro­pri­etor­ships, as “in­or­di­nately large and com­plex for an in­di­vid­ual.”

Trump’s re­turns, his lawyers re­port, “have been un­der con­tin­u­ous ex­am­i­na­tion by the In­ter­nal Rev­enue Ser­vice since 2002, con­sis­tent with the IRS’ prac­tice for large and com­plex busi­nesses.” The au­dits from 2002 through 2008 “have been closed ad­min­is­tra­tively by agree­ment with the IRS with­out as­sess­ment or pay­ment, on a net ba­sis, of any deficiency,” while “ex­am­i­na­tions for re­turns for the 2009 year and for­ward are on­go­ing.”

To Trump, this ar­gues against dis­clo­sure. “I can’t do it un­til the au­dit is fin­ished, ob­vi­ously,” he said at a de­bate in Fe­bru­ary.

Not ob­vi­ous, ac­tu­ally. Noth­ing in IRS rules would pre­vent Trump from re­leas­ing re­turns dur­ing an au­dit. Noth­ing would pre­vent him from re­leas­ing ear­lier re­turns, de­spite his lawyers’ ar­gu­ment that “the pend­ing ex­am­i­na­tions are con­tin­u­a­tions of prior, closed ex­am­i­na­tions.” Noth­ing would pre­vent him from at least pro­vid­ing a sum­mary of tax in­for­ma­tion that would in­di­cate his to­tal in­come, ef­fec­tive tax rate and char­i­ta­ble con­tri­bu­tions.

“You don’t learn very much from tax re­turns,” Trump told CBS News’ John Dick­er­son, when pressed on sum­maries. But this is un­true, it’s in­con­sis­tent with his­tor­i­cal prac­tice and it con­flicts with Trump’s as­ser­tion that he’d be happy to pro­vide the in­for­ma­tion once the au­dit is com­pleted.

In­deed, although an au­dit for a tax­payer of Trump’s mag­ni­tude and com­plex­ity is not ev­i­dence of tax mis­chief, if any­thing, it ar­gues for more trans­parency, not less. Trump says there was no “net” deficiency. Were there dodges that the IRS dis­al­lowed? Aren’t vot­ers en­ti­tled to know about those? Richard Nixon, of all peo­ple, re­leased his tax re­turns — in the midst of an IRS au­dit, while he was pres­i­dent. (He owed nearly half a mil­lion dol­lars in taxes and in­ter­est.)

Next Tax Day will see a new pres­i­dent in the White House. Will it be the first in decades in which the pres­i­dent won’t be straight with his fel­low tax­pay­ers?

Ruth Mar­cus is a syn­di­cated colum­nist. Con­tact her at ruth­mar­cus@wash­post.com.

WASH­ING­TON

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