EPIC v. IRS (Donald Trump's Tax Records)
- Pew Survey Finds Varying Cybersecurity Knowledge Among the Public: The Pew Research Center has released a report on "What the Public Knows About Cybersecurity." According to the Pew survey, 75% of respondents could identify the strongest password out of four options. About half of the people who took the survey could identify a phishing attack; a similar number knew what ransomware is. Only 16% answered that "a group of computers that is networked together and used by hackers to steal information" is called a "botnet." EPIC maintains an Online Guide to Practical Privacy Tools and resources on Public Opinion and Privacy. (Mar. 22, 2017)
- EPIC Urges House Committee to Protect Consumers, Democratic Institutions with Strong Cyber Security Measures: In advance of a hearing on "Cyber Warfare in the 21st Century: Threats, Challenges, and Opportunities," EPIC has sent a letter to the House Armed Services Committee urging Congress to protect democratic institutions, following the Russian interference with the 2016 presidential election. EPIC explained that "data protection and privacy should remain a central focus" of cyber security policy. EPIC also recommended that Congress strengthen the federal Privacy Act and establish a U.S. data protection agency. EPIC recently launched the EPIC Cybersecurity and Democracy Project, which will focus on US cyber policies, threats to election systems and foreign attempts to influence American policymaking. (Feb. 28, 2017)
If the Freedom of Information Act means anything, it means that the American public has the right to know whether records exist in a federal agency which reveal that the U.S. president has financial dealings with a foreign adversary.
With that in mind, EPIC submitted a FOIA request to the Internal Revenue Service on February 16, 2017 seeking “Donald J. Trump’s tax returns for tax years 2010 forward and any other indications of financial relations with the Russian government or Russian businesses.”
Donald J. Trump’s failure to release his tax returns is unprecedented and goes against the long-standing tradition of candidates for the U.S. presidency. The release of President Trump’s tax returns would help determine whether statements regarding his business relations with Russia and the Russian government are correct or not correct.
Notably, the public favors the release of the President’s tax records. According to an ABC News poll, three-quarters of Americans say he should release his returns. More than 1 million people have signed a petition urging the federal government to “[i]mmediately release Donald J. Trump's full tax returns, with all information needed to verify emoluments clause compliance.”
Section § 6103(k)(3)
In the aftermath of President Richard M. Nixon’s resignation, Congress enacted the Tax Reform Act of 1976 to strengthen the accountability of the IRS. Senator Lowell Weicker (R-CT) described the law as a “legislative remedy to the flaws of Government exposed by the chain of abuses we call Watergate.”
To ensure the “integrity and fairness [of the IRS] in administering the tax laws,” one provision of the Act—§ 6103(k)(3)—permits the IRS Commissioner to “disclose such return information or any other information with respect to any specific taxpayer to the extent necessary for tax administration purposes to correct a misstatement of fact published or disclosed with respect to such taxpayer's return or any transaction of the taxpayer with the Internal Revenue Service.” The provision requires the Commissioner to obtain the approval of the Joint Committee on Taxation.
Section 6103(k)(3) provides the IRS with an “extremely important” authority “to protect itself and the tax system[.]” As Sen. Chuck Grassley (R-IA) has explained, certain “type[s] of factual misstatements should trigger disclosure of return information” under § 6103(k)(3) if they are of a sufficient “degree of seriousness.”
The IRS has approached the Joint Committee on Taxation about its § 6103(k)(3) authority in at least two other matters. In 1997, the IRS Commissioner “requested the opportunity to explore with Chairman Archer and Chairman Roth the possibility of using Code section 6103(k)(3) to permit the IRS to correct misstatements of fact regarding examinations of tax-exempt organizations.” Commissioner Richardson explained that “unfounded reports erode public confidence in the integrity of the IRS, thereby undermining the self-assessment compliance system.” The IRS put forward a similar proposal in 1981 to correct misstatements by tax protestors that the IRS was “letting them get away with not filing or that [the IRS was] harassing them.”
’Misstatement[s] of Fact’
Many individuals, including the President, have published conflicting statements of fact about the contents of President Trump’s tax returns. At least some of these statements of fact must necessarily be false because they are contradictory.
In July 2016, for example, Trump stated on Twitter: “For the record, I have ZERO investments in Russia.” Days later, Trump stated in an interview that he had “no relationship to Russia whatsoever” and “no debts” in the country.
However, numerous news organizations have covered President Trump’s ties to Russian business and government. The Washington Post reported that “[s]ince the 1980s, Trump and his family members have made numerous trips to Moscow in search of business opportunities, and they have relied on Russian investors to buy their properties around the world.” CBS News noted that “[w]hile the Republican presidential nominee has denied any ties to Russia, his connections to the country and its president go back years.”
Following his election, President Trump tweeted on January 11, 2017: "Russia has never tried to use leverage over me. I HAVE NOTHING TO DO WITH RUSSIA - NO DEALS, NO LOANS, NO NOTHING!” On February 16, the President reiterated his statement in a nationally televised press conference: “I can tell you, speaking for myself, I own nothing in Russia. I have no loans in Russia. I don't have any deals in Russia.”
Yet three separate investigations—one by the Federal Bureau of Investigation, one by the House Intelligence Committee, and one by the Senate Intelligence Committee—are poised to examine President Trump’s business connections to Russia. Sen. Chris Murphy (D-CT) recently asserted that President Trump’s tax returns “could shed light on Trump’s ‘bizarre positioning’ towards Russia” and alleged “either that the Russians have something on Trump, or that there are financial ties that are requiring Trump to behave this way or perhaps the Russians helped him in the election and this is sort of a quid pro quo.”
Meanwhile, news reports continue to contradict the President’s factual claims about his financial dealings. “I believe Trump’s tax returns are key evidence in the investigations into the extent of Russian interference in the election and should be made public or at least provided to Congress,” one commentator wrote. President Trump’s statements that he “has ZERO investments in Russia” and that he has “NOTHING TO DO WITH RUSSIA” have even been contradicted by son-in-law and White House senior advisor Jared Kushner. In 2008, Kushner stated that “Russians make up a pretty disproportionate cross-section of a lot of our assets. . . . We see a lot of money pouring in from Russia.”
’Tax Administration Purposes’
President Trump, media commentators, and many members of the public have attacked the integrity and fairness of IRS in recent months, alleging religious discrimination, political bias, and economic favoritism in the agency’s administration of the tax code.
President Trump has claimed that he “unfairly get[s] audited by the I.R.S. almost every single year” and has accused the agency of targeting him for both religious and political reasons. In a February 2016 CNN interview, Trump stated: "I'm always audited by the IRS, which I think is very unfair—I don't know, maybe because of religion, maybe because of something else.” Trump added that the IRS may target him “because of the fact that I'm a strong Christian, and I feel strongly about it and maybe there's a bias.”
Others have questioned whether the IRS is unfairly deferential toward President Trump and other wealthy taxpayers. In a Forbes article titled “Do Wealthy People Like Trump Have Easier IRS Audits?,” tax attorney Robert W. Wood reported that Trump and other big earners appear to elude IRS auditors at higher rates than regular earners. “[S]tatistics might be read to suggest that wealthy individuals often outdo even this elite wing of the IRS [the IRS Wealth Squad],” Wood wrote. “[I]n a significant percentage of the audits it handles, the IRS Wealth Squad walks away without a single dollar.”
Still others have announced their intention to “withhold payment until Trump releases his own tax returns, since they believe the documents would prove that he's not fit to be president.”
In order to maintain public confidence in the agency’s equitable administration of the tax code, the IRS must exercise its power under § 6103(k)(3) to release Donald Trump’s returns.
EPIC’s FOIA Request
On February 16, 2017, EPIC submitted a FOIA request to the Internal Revenue Service seeking “all of Donald J. Trump’s individual income tax returns for tax years 2010 forward, and any other indications of financial relations with the Russian government or Russian businesses.” In a letter dated March 2, 2017, the IRS acknowledged receipt of EPIC’s request but stated that it was “closing [EPIC’s] request as incomplete with no further action.”
On March 29, 2017, EPIC submitted an appeal and renewed FOIA request to the IRS. EPIC explained its right to seek and access such records under 26 U.S.C. § 6103(k)(3) and urged the IRS Commissioner to “move promptly to obtain permission from the Joint Commission on Taxation to release the records EPIC has requested.”
In a letter dated April 6, 2017, the IRS acknowledged receipt of EPIC’s appeal but again stated that it was closing EPIC’s request as “incomplete.” The agency asserted that “any future request regarding this subject matter [would] not be processed.”
On April 15, 2017, EPIC filed suit in the U.S. District Court for the District of Columbia seeking to compel disclosure of the requested tax records.
As Marc Rotenberg, President of EPIC, has said, "There has never been a more compelling request presented to the IRS than the request from EPIC to obtain the tax records of President Donald J. Trump."
There is a widespread concern that the President’s private financial interests may conflict with the national interests of the United States. There is a related concern that Mr. Trump may have entered into business relations with the Russian government that aided his presidential campaign. There is simply no way to resolve these disputes without the release of the tax records. The public has the right to know.
“The public interest in disclosure of this information could not be greater,” EPIC noted in the Complaint against the IRS, “This complaint presents unique facts that would not apply to the release of any other tax returns for any other taxpayer.”
In addition to filing this case to obtain President Trump's tax records, EPIC has also filed several Freedom of Information Act lawsuits concerning Russian interference in the 2016 Presidential Election. The first is EPIC v. FBI (concerning a request for records related to the hack of the DCCC, DNC, and RNC systems as well as other election interference), and the other is EPIC v. ODNI (concerning a request for the full report on "Russian Activities and Intentions in Recent US Elections").
U.S. District Court for the District of Columbia (No. 17-___)
- Complaint (Apr. 15, 2017)
- EPIC FOIA Request (Feb. 16, 2017)
- IRS Response (Mar. 6, 2017)
- EPIC FOIA Appeal (Mar. 29, 2017)
- IRS Response (Apr. 10, 2017)
- Gregory Korte, Trump’s tax returns will be immediately under audit, USA Today, April 12, 2017
- Peter Overby, Activists Plan ‘Tax Day’ Marches Calling For Release of Trump’s Taxes, NPR, April 6, 2017
- Kira Lerner, More Than Half Of States Are Trying to Force Trump To Release His Tax Returns, Think Progress, April 6, 2017
- Simone Thomas and Kristin Wilson, Pelosi, Dems Not Letting Go Of Trump Tax Return Push, CNN, April 5, 2017
- Christina Marcos and Naomi Jagoda, Republicans Take Heat On Trump Tax Returns, The Hill, March 19, 2017
- Mark Hensch, Feinstein: ‘Possibility’ Intel Dems Could Subponea Trump Tax Returns, The Hill, March 9, 2017
- Allison Michaels, Will President Trump Ever Release His Tax Returns, Washington Post, February 17, 2017
- Daniel Marans, Petition Demanding Donald Trump Release His Tax Returns Breaks White House Record, Huffington Post, January 27, 2017
- Eric Bradner, Conway: Trump Will No Release Tax Returns, CNN, January 22, 2017
- Chris Sommerfeldt, Contrary to Donald Trump’s Belief, 74% of Americans Want To See His Tax Returns, According To Poll, New York Daily News, January 17, 2017
- Mark Berman, Trump Says He Still Won’t Release His Tax Returns And Claims Americans Don’t ‘Care At All,’ Washington Post, January 11, 2017
- Sarah Bergley, Donald Trump Says He Doesn’t Think Americans Care About His Tax Returns, Time, January 11, 2017
- Igor Bobic, Donald Trump Breaks 40-Year Bipartisan Tradition Not Releasing Tax Returns, Huffington Post, November 8, 2016
- Drew Harwell, All The Excuses Trump Has Given For Why He Won’t Release His Tax Returns, Washington Post, September 15, 2016