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Fact Check: Democrats’ Release of Confidential Tax Returns Was Unprecedented and Unnecessary

December 22, 2022 — Blog    — Oversight    — Press Releases    — Select Revenue Measures    — Supercharged IRS   

On Wednesday, Ways and Means Democrats voted to release confidential taxpayer information, jeopardizing the right of every American to be protected from political targeting by Congress.

Here’s the truth about how their unprecedented and haphazard actions sets a dangerous precedent that will allow majorities in Congress to target their political enemies.

Democrats ignore that President Trump was under audit.

FACT: The Democrats’ own documents reveal that President Trump’s were selected for regular IRS examinations. According to the Wall Street Journal:

  • Yes, there were audits. “The fine print of Mr. Neal’s report acknowledges that five of Mr. Trump’s six individual returns since 2015 were selected for regular IRS examination. So were five of the six returns for his firm, DJT Holdings.”
  • No, the IRS was not pulling punches based on political interference. “By the way, the IRS Commissioner during Mr. Trump’s first year in office was John Koskinen, a holdover appointee of President Obama. The one “mandatory” audit selection took place under Mr. Trump’s nominee, Commissioner Charles Rettig.”

Democrats are justifying their actions based on misleading statements about Republicans’ even-handed and transparent 2014 tax investigation of IRS’s political targeting.

FACT: Republicans 2014 investigation was diligent and thorough, allowing for a full-scope investigation and report.

  • It was conducted over 10 months, allowing for discovery, witness interviews, and a detailed report.
  • By comparison, Democrats’ slapdash investigation was crammed into three weeks and ended in a meager 39-page report.
  • Republicans allowed equal bipartisan access to investigative materials, while Democrats allowed Republicans only days of access prior to surprise Committee action.
  • There was evidence of the alleged wrongdoing by IRS officials in 2014, necessarily prompting an investigation, while Democrats’ current efforts to release confidential tax information was prompted by political gain.
  • Another investigation in 2002 also shows a contrast to the lack of diligence Democrats have put into their recent actions.

 

Democrats pretend that they have to release the private tax information of President Trump in order to review the IRS’s presidential audit program, but they don’t.

FACT: Democrats’ claim about the need to reform the presidential audit program is merely cover for weaponizing the tax code against political rivals.

  • “Still, it’s important that Democrats on the House Ways and Means Committee remain true to their word… To turn around now and release [one individual’s] returns—outside the context of a thorough evaluation of the IRS’s presidential audit program—would make the stated rationale look much like a head fake.” – Daniel J. Hemel, Professor at New York University School of Law in an article for Lawfare.
  • Even the New York Times writes, “Release of Trump Tax Returns Could Herald New Era for Taxpayer Privacy” and cites an Obama-appointed IRS commissioner saying, “It’s a dangerous precedent.”
  • The Times also quotes an emeritus tax law professor at the University of Virginia, who said: “That’s the end of tax privacy to me,” Mr. Yin said. “Essentially no one’s tax information is really protected, as long as you cross some interest who happens to be in power at some particular point in time, then we’re all vulnerable.”

Even if Democrats claim that they can redact confidential materials after voting to publicly release, there is NO legal requirement to do so, and worse, no consequence for leaking whatever is redacted.

FACT: Democrats ignored calls to protect the private information of a minor named in the materials.

  • Ways and Means Member Rep. Jason Smith (R-MO) pushed for an amendment to redact the confidential information of minors before release, but Democrats refused to budge.
  • Now, the only thing blocking this sensitive information from public release is a mere promise from Ways and Means Democrats with no legal reinforcement or ramifications if broken.

KEY BACKGROUND:

Democrats sought a politicized release of Trump’s tax returns – at first.

  • Prior to making the formal request of President Trump’s tax returns in Court, Democrats made clear their real intentions. In their own words:
    • During the 115th Congress, then-Ranking Member Neal (D-MA) stated that “Committee Democrats remain steadfast in [their] pursuit to have [President Trump’s] individual tax returns disclosed to the public.”
    • In 2020, Speaker Nancy Pelosi (D-CA) stated: “When we win this election, and we have a new president of the United States in January, and we have a new secretary of the Treasury, and Richie Neal asks for the president’s returns, then the world will see what the president has been hiding all of this time.”
    • In 2019, Chairman Neal stated that “the public has reasonably come to expect that presidential candidates and aspirants release those documents.”
    • In 2018, Rep. Lloyd Doggett (D-TX) said, “Probably the approach would be to get all of it, review it, and…release all or part of it.”

READ: Politicized Public Release of Trump’s Tax Returns Isn’t the Legitimate Legislative Purpose Dems Promised

Democrats then changed their tune to convince the courts that their request was lawful.

  • Recognizing that merely publicizing the returns fell short of the legal requirements for obtaining records from the IRS, Ways and Means Democrats, led by Chairman Richard Neal, modified their position. They newly claimed that their pursuit of President Trump’s tax returns was for a legitimate legislative purpose and that they would maintain confidentiality of the documents in conducting that oversight. In their own words:
    • In June 2021, having failed on the first attempt to secure the returns, Chairman Neal abandoned the clearly political premise to expose the returns: “There have been claims that the true and sole purpose of the Committee’s inquiry here is to expose former President Trump’s tax returns. These claims are wrong.”
    • Democrats pledged to limit access: In the initial request for the documents in 2019, Democrats wrote: “Absent explicit Committee authorization, access to this document and any responsive documents shall be limited to IRS personnel who need such access for the purpose of providing information or assistance to the Committee.”
    • Democrats pledged confidential review: Democrats also told the New York Times that the tax returns would be reviewed confidentially: “Mr. Neal gave the agency until April 10 to comply with the request, and if he receives the information, he will then confidentially review it with his committee staff.”
    • Democrats pledged an emphasis on policy, not politics: In a letter to the IRS Democrats wrote: “I take the authority to make this request very seriously, and I approach it with the utmost care and respect. This request is about policy, not politics.”

READ: Brady: Court Decision Opens Dangerous New Political Battleground Where No Citizen Is Safe From Majority Political Party in Congress