VICTORY: Court Rules IRS Must Disclose Trump Tax Settlements to EPIC
December 4, 2021
A federal court has ruled in EPIC v. IRS II that the Internal Revenue Service must disclose any accepted offers in compromise—a type of settlement between the IRS and a taxpayer—entered into by former President Trump or his businesses. Although tax information is ordinarily confidential, federal law requires the IRS to release accepted offers in compromise because they are “affected with significant public interest” and because disclosure deters the IRS from striking generous settlements with “politically connected individuals.”
As part of its work to identify questionable financial dealings that threaten democratic institutions, EPIC filed a Freedom of Information Act request in 2018 for accepted offers in compromise and related return information concerning President Trump. The IRS refused EPIC’s request and asked the court to dismiss EPIC’s subsequent lawsuit, but the court denied the IRS’s motion on Friday. The court explained that the tax code “creates a FOIA obligation for the IRS to disclose return information to EPIC, to the extent that information is necessary to permit inspection of an accepted offer-in-compromise.”
The IRS must now conduct a search to identify any offers in compromise involving President Trump and disclose those records to EPIC. Notably, the New York Times reported last year that Trump and the Internal Revenue Service reached a tentative agreement in 2014 over a disputed $70 million tax refund—a deal that may be covered by EPIC’s FOIA request.
EPIC previously sought disclosure of President Trump’s tax returns in EPIC v. IRS I, arguing that disclosure was necessary to correct numerous factual misstatements made by the President. Last year, EPIC filed an amicus brief in Trump v. Vance urging the Supreme Court to allow the release of President Trump’s tax returns to a New York grand jury. EPIC wrote that the “longstanding practice of disclosing presidential tax returns reflects a central principle of modern democracies: privacy must sometimes yield to accountability.” The Court ultimately rejected Trump’s effort to categorically shield his tax returns from state prosecutors. EPIC’s ongoing case is EPIC v. IRS II, No. 18-902 (D.D.C.).