The ongoing battle for Trump’s tax returns

During the 2016 campaign for the Republican nomination for president, Donald Trump followed the practice of candidates for president in the last several presidential elections, and said that he would make his income tax returns public.

Somewhere along the way he changed his mind -- or at least his position. He initially said that their release was then impossible, because the returns were under audit; more recently he has simply stonewalled the issue. And, despite a well-known proclivity to do so, he has not again changed his position.

Not surprisingly, there is a great deal of curiosity on the part of Democrats, and others, as to exactly what the returns would reveal. And why there is so much reluctance to reveal it.

At the core of the issue is Section 2103 of the Internal Revenue Code, which clearly and unambiguously provides an exception to the mandated confidentiality of federal tax returns. It provides that on the written request of the appropriate House or Senate Committee (Ways & Means or Finance) the secretary of the Treasury shall furnish the returns requested. No other provision modifies or limits Section 2103. But the Treasury has flat out refused to comply with the House Committee's request. The House Committee is seeking intervention by the federal court.

Even if there is eventually court-ordered compliance, it is not clear that the returns would be made public. It has been suggested that any such disclosure would be a felony, although that is disputed.

Until recently the efforts to require disclosure have focused on the East Coast. The Democrats in the House of Representatives have initiated actions to require disclosure. The Manhattan district attorney's office has an investigation pending, and has demanded the returns. It has rejected the president's recent suggestion that not only is he immune from criminal prosecution, he is immune from any criminal probe while he remains in office. Other litigation has disclosed that Deutche Bank has copies of the returns.

Now the state of California has entered into the picture, with an imaginative statute intended to force disclosure, essentially an end run around the Treasury's intransigence. Senate Bill 27, (the "Presidential Tax Transparency and Accountability Act") passed in July, and signed by the governor on July 30 of this year, requires all candidates, as a condition of being on the 2020 primary ballot of their party, to turn over their tax returns to the California secretary of state for public disclosure. Not surprisingly, the president is resisting.

SB27 requires that the disclosure be made no later than Nov. 16, 2019.

Trump, through a small army of lawyers, filed suit in federal court in Sacramento for a declaration of unconstitutionality, and, more importantly, for a preliminary injunction against the law taking effect. He made several arguments against the validity of the law. One argument was that the Constitutional rules for the presidency are "fixed and unalterable" and not subject to state modification. The prospect of differing requirements in different states was raised. The law was further argued to violate both California's authority to regulate elections and the First Amendment.

The contention that persuaded the judge was that the California law is preempted the Ethics in Government Act, which requires financial disclosures by senior federal officials. Trump filed the report required by the Act in May of this year.

After argument, on September 19 the federal judge in Sacramento and granted the injunction. Judge Morrison C. Englund, Jr., ruled from the bench (promising a final ruling by the end of the month) that, according, to the Los Angeles Times, "there would be irreparable harm without temporary relief." His reading on the preemption issue would, if accepted, could resolve the entire case in the president's favor, negating the California law.

Preemption is a constitutional doctrine that in the event of conflict between federal and state legislation (or other action) the federal supremacy provisions of Article VI of the United States Constitution require the federal interest to prevail. The Ethics in Government could be held to preempt the California statute.

Temporary injunctions are, of course, intended to maintain the status quo until there can be a full consideration of the arguments and proof of both parties. One requirement for the grant of a preliminary injunction is that the defendant could be seriously prejudiced if he does not obtain protection from immediate action. The judge so found in granting the injunction. Once disclosure is made, further resistance would be irrelevant.

The ruling is subject to the judge's own reconsideration, and appeal.

It is not clear why the court felt such urgency. There are two months before any requirement takes effect, time enough for full consideration of Trump's arguments. And even if the sanction took effect, it is not clear that Trump's candidacy would be endangered. Write-in candidates are exempt from the requirements, as are candidates of parties not conducting a primary.

The real danger would come from opening up the California primary to any or all of the three Republicans who have announced their presidential candidacy. To date underfunded and essentially unknown, the opportunity to meaningfully contest the Republican nomination in California could be a serious embarrassment to the Trump campaign.

What is there in the tax returns that the president is so anxious to keep from the public? There has been speculation that the returns will show that he is either a lot richer or a lot poorer than he has claimed. Earlier disclosures by the New York Times of information gleaned from his 1980s returns showed that he owed more of his wealth to his father than he had previously admitted.

But nothing revealed with respect to conduct at a distance of time can be the basis for current criminal charges. The most intense current focus would be on matters during his presidency.

Vox on May 10 published a lengthy analysis of what might be learned from the returns. After reviewing past transactions, it focused on what current returns might reveal. Since Trump is president, "the most obvious think his tax returns would tell us is who is giving him money." Now, while he is in the White House.

We know that he has declined to sever his business connections and ownership, and that the Trump Hotel in Washington is patronized by foreign countries, corporations and lobbyists with government interests. But what other business transactions, are currently are bringing him income, and who else might be involved in them, is virtually unknown.

Vox concludes that "Beyond the two big unknowns of tax evasion and bribery, there are the unknown unknowns."

And will remain so unless and until one of the several attempts to breach the so-far effective stonewall is successful. Or the 2020 election makes the issue moot. 