Trump's tax returns could reveal big refunds from partially leaked 2005 federal return

 In Science
The pressure is growing to force President Trump to turn over his tax returns. The other day, for example, 200 Congressmen filed a suit in federal court, arguing that voters and lawmakers have a right to know whether Trump’s businesses are violating the Constitution’s emolument clause, which bars the president from accepting payments from foreign countries.

The lead Senate plaintiff in the suit, Sen. Richard Blumenthal (D-Conn.), said that the legal effort could force release of the president’s tax returns and other business documents during the discovery stage of the litigation.

“By failing to release his tax returns — reflecting payments and benefits from foreign powers — President Trump is thumbing his nose at the American people and the Constitution,” Blumenthal told my Washington Post colleague Tom Hamburger. “He is violating the Constitution by accepting foreign government payments and benefits without consent from Congress — which can’t consent to what it doesn’t know.”

But Trump hasn’t filed a tax return for 2017, which is the year he became president and the emolument clause began to apply to him. So even if we got his earlier returns, we wouldn’t know what he’s done since taking office Jan. 20.

As for the argument that seeing his returns would expose Russian connections, should they exist: I’ve written before, his old tax returns, should they ever see the light of day, are unlikely to tell us much about any possible personal foreign entanglements.

Those might show up, if they exist, in the filings of the hundreds of companies that make up the Trump empire. But Trump’s personal returns are unlikely to show them.

But seeing his old returns would tell us something especially relevant about a president who wants to radically reshape our tax code.

It would show us how much and in what ways Trump has personally benefited from the legal loopholes scattered throughout the current system. And what impact the changes he’s proposing would have on him personally.

Trump’s tax returns would also let us see, I suspect, that a good part of the tax payments that showed up on Trump’s leaked partial 2005 federal return was refunded to him in later years.

When the first two pages of that return became public in March, he and his backers took victory laps because the return showed him paying $36.5 million of income tax and having made about $153 million during the year.

Among the boasters was Donald Trump Jr., who tweeted about his father’s 2005 payments at least three times and at a May campaign rally in Montana told a heckler that his father’s 2005 return shows that, “You can do it all. You can be successful [and] you can pay your taxes.”

However, for reasons I’ll get to in a bit, I think there’s a very good chance that Trump got a major portion of his 2005 tax refunded to him in 2006 and later. If I’m right, it means that a good part of the 2005 payments that Trump and Trump Jr. and other Trump types boasted about amounted to temporary loans to the Treasury. Not tax payments as we normally think of them.

If so, that would be yet another example of how Trump has gotten a free ride — okay, in this case a reduced-fare ride — on his income taxes.

Getting refunds like the ones I think Trump got is perfectly legal. But for us to see the 2005 tax payments but not any subsequent refunds leaves us with a misleading picture.

Should these refunds exist — I think they do, but I can’t prove it — they would show up on post-2005 tax returns that we haven’t seen and that Trump refuses to disclose.

Seeing if he got refunds on his 2005 taxes is yet another good reason for us to want to see Trump’s returns, which presidents and presidential candidates had been providing since the days of Richard Nixon.

We’d find out about possible refunds of Trump’s 2005 taxes by looking at the “Other Credits” line on the second page of those returns and seeing if he took any credits on IRS Form 8801.

I emailed both Trump’s tax attorney and the White House several weeks ago asking them to respond to my theory about Trump having gotten refunds in subsequent years. The law firm to which Trump tax attorney Shari Dillon belongs sent a quick and courteous “no comment” response. My email to Trump spokeswoman Hope Hicks went unanswered.

So I’m relying on my own analysis, which is based on information and guidance that I got from about half a dozen tax experts, some of whom I’ve worked with for decades in the course of writing about taxes. Some of the experts I consulted for this column are tax practitioners, some are theoreticians. Their political preferences range from pro-Trump to socialist.

Okay. Now, here we go.

If you look at Trump’s partial 2005 return, which made its way to veteran tax journalist David Cay Johnson (with whom I worked at The Detroit Free Press in the 1970s), who gave it to “The Rachel Maddow Show” and put it into the public domain, you see three telling things.

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