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New York Is Trying to Release Trump’s State Tax Returns. Here’s Why That Might Not Work http://feedproxy.google.com/~r/timeblogs/swampland/~3/dGeMZ9aiBq8/ Apr 10th 2019, 16:39
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Democratic lawmakers in New York this week introduced legislation that would make President Donald Trump’s state income tax returns public — the latest step in a battle over details that the President has long refused to release. Backers see the bill as an alternative way to Trump’s tax records, even if Trump’s allies manage to stonewall efforts by Democrats in the U.S. House to get Trump’s federal tax returns. However, experts say the New York effort is sure to run into legal challenges of its own — and may not reveal as much as some hope. “There’s so much we do not learn from tax forms. And unfortunately, there’s been such a feeding frenzy, and the expectations are so high, that it’s bound to disappoint in some respects,” says Richard Pomp, a law professor at the University of Connecticut and a tax expert who previously served as director of the New York Tax Study Commission.
“I don’t want to overstate that it’s not useful. It is, but it’s just not as useful as I think people are hoping.” Pomp the most interesting revelations — and the likely legal challenges — would come from the federal tax forms attached to the state filings. Those attachments would contain more information, though still not as much as a release of Trump’s full federal tax return. “This is a back door of getting his federal returns,” Pomp says. “That’s where the real action is — in those federal forms — but even then, they are going to be probably a little too summary to answer some of the questions.” On April 3, House Democrats requested six years of Trump’s personal and business tax returns, giving the IRS an April 10 deadline to comply. Trump Administration officials and other Republicans have opposed the request, and White House Chief of Staff Mick Mulvaney said Democrats would “never” see Trump’s returns. Trump’s taxes have been a source of contention since his presidential campaign, when he broke with decades of tradition by refusing to release his returns. When Hillary Clinton accused him, during a 2016 debate, of not paying any federal income tax, Trump said, “that makes me smart.” During the campaign, he promised to release his tax returns after a “routine audit” was complete. But he has consistently refused to release them since taking office. “I got elected last time with the same exact issue with the same intensity, which wasn’t very much, because frankly the people don’t care,” Trump said Wednesday. Polls, meantime, continue to show that Americans do want to see Trump’s taxes. The latest phase in the battle over Trump’s tax returns comes as the Democrat-controlled House steps up oversight of the President and his administration. Scrutiny over his taxes has been fueled by the New York Times reporting that Trump participated in “dubious tax schemes” and “outright fraud” during the 1990s and by the testimony of Trump’s former personal attorney Michael Cohen, who said the President routinely lied about the value of his business properties in order to reduce his real estate taxes. The New York bill introduced Monday would require the New York Department of Taxation and Finance to release any state income tax return requested by leaders of the U.S. House Ways & Means Committee, the U.S. Senate Finance Committee and the Joint Committee on Taxation “for a specified and legitimate legislative purpose.” Another bill, the New York Truth Act, would require the disclosure of state tax returns for eight statewide elected officials in New York, including the U.S. President and Vice President if they file taxes in the state. “We’re not seeking the President’s cooperation, we’re not looking to the IRS to turn over a copy of returns. There’s a copy of President Trump’s New York state tax returns right here in New York state in an office somewhere,” state Assemblyman David Buchwald said at a press conference on Monday. “The only thing that prevents that state income tax return from being made public is a state statute that we, the state legislature, have the power to amend.” State Sen. Brad Hoylman said the bill will enable the public “to see what Donald Trump and his family are hiding.” But tax experts say the state returns won’t contain the “bombshell” information Trump critics might hope to find. They will reveal his income, state tax rate, capital gains, business losses, rental income and royalties. “That’s really useful information for a committee that’s just trying to get a sense of whether the President was paying tax at all,” says Joshua Blank, professor at the University of California, Irvine School of Law and an expert in tax privacy. But the state returns would not answer looming questions about Trump’s net worth, foreign assets, whether he still has a hand in his businesses or how much money he has paid in federal taxes. Meanwhile, the legislation could still face political obstacles before it becomes law, and legal challenges once it’s enacted. While Democrats hold enough seats in the state legislature to pass such a measure, its success still depends on support from the Democratic leaders, Assembly Speaker Carl Heastie and Senate Majority Leader Andrea Stewart-Cousins and Gov. Andrew Cuomo. Heastie and Stewart-Cousins have not yet given official support for the bill introduced Monday, but Cuomo told the New York Times he would support it. “By and large, if Heastie, Stewart-Cousins and Cuomo are all in favor of it, it’s probably going to become law — both because they have a lot of power to do stuff, but also because Heastie and Stewart-Cousins aren’t going to be pushing forward with something that they don’t think would win,” says Jim Coleman Battista, associate professor of political science at the University at Buffalo and an expert on New York state politics. If the bill becomes law, Blank says the IRS could threaten to stop cooperating with New York tax authorities for violating a confidentiality agreement related to the release of federal attachments. But he thinks that is unlikely to happen. “New York state tax officials have tons of very valuable information about taxpayers in New York that the federal government needs,” he says. “Cooperation is a two-way street.” Pomp predicts the President’s legal team would seek an injunction to prevent the release of the federal tax forms and then prolong the fight. “There will be one challenge after another,” Pomp says. “This whole thing will, of course, be tied up in the courts. And I’m sure the President’s strategy is to drag it out to 2020.”
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