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Trump’s Tax Returns: What’s There to Hide?

Let’s begin by dispatching with the flimsy pretext that Donald Trump should not publish his tax returns because he is under audit, if it is even true that he is under audit. With the IRS operating on a barebones budget, it’s true that audits can be slow to resolve, but they are typically limited in scope to specific issues and there is nothing plausible, let alone “routine,” about an audit that allegedly never ends. But that’s beside the point, as the Internal Revenue Service already has copies of his tax returns in their entirety, so there is no leverage lost in Donald Trump publishing his tax filings for the general public to see. The IRS has nothing to gain from Donald Trump publishing the information that they have already had on file for years.

There are many actual reasons for which Donald Trump is hiding his tax information in the face of mounting public pressure. The most favorable justification to him may be that detail provided in his personal tax returns could be used by third parties, like creditors or former business partners, to provide evidence of actionable claims against him, such as that he broke contracts or misled his many debtors. This is unlikely, however, because his personal tax returns will only divulge the most basic financial data from his businesses—for example, his share of their income and losses—and to see the real inner workings of his business dealings one would need access to the tax returns of The Trump Organization and the various other businesses he owns an interest in. There’s just not much information contained in his personal tax returns that is detailed enough that it could be used effectively in a lawsuit against him.

The next most favorable excuse might be the cynical and fundamentally unacceptable conclusion that the political benefits of concealing the information outweigh the political costs. Maybe Donald Trump’s tax returns would reveal that Melania Trump likes to give money to Planned Parenthood, or alternatively that they give almost nothing to charity, and publishing his tax returns would likely reveal that he has taken overly aggressive tax positions—an especially likely theory if he is under a seemingly never ending audit and brags about doing everything legally permissible to avoid paying his fair share. Another likely political disincentive to publishing the returns may be that Donald Trump loses money more often than he makes it, and publishing his tax returns would divulge the fact that he continues to roll forward huge net operating losses—that is, accumulated losses from decades of bankrupting his poorly managed business ventures. However, as Donald Trump recently declared on Twitter, the election is over—and any hit to his poll numbers over the specifics of his effective tax rates is likely to be unimportant while he has us teetering on the precipice of war with North Korea.

The real reason that Donald Trump will never publish his tax returns is likely summed up in two words: foreign reporting. While foreign reporting requirements can often be separate from a person’s tax filings, Form 8938: Statement of Specified Foreign Financial Assets is required to be filed with the tax returns of individuals who have certain valuable overseas foreign assets, and Donald Trump likely has dozens, if not hundreds, of such reportable foreign financial assets. The “smoking gun” in Donald Trump’s tax returns is most likely that he has so much of his wealth in foreign assets that his personal financial interests are irreconcilable with the interests of the American people, and his tax returns, if published in their entirety, would reveal conflicts of interests so intractable and damning that they would be without precedent in modern political history. America’s foreign policy may be driven in large part by which specific countries Donald Trump has chosen to invest his father’s fortune in.

In the face of certain corruption in the White House, Americans should call for transparency now more than ever. The Trump Administration will only be as transparent as the American public demands it to be, and so when the White House makes announcements like the declaration that they will no longer publish the White House visitor logs, the American public should forcefully reject these decisions as fundamentally unacceptable to the values of our democracy. As Donald Trump continues to break historic precedent in failing to publish his tax returns, the American public can only assume it is because Donald Trump’s conflicts of interest are vast and pervasive that they impair his ability to serve another day as president. The best thing for the American public to do is to demand transparency and accountability, vocally and persistently, and not acquiesce to the corruption by easing up on the public pressure. Americans should take to the streets and loudly denounce the sham that has become the American presidency until the White House is compelled to cave to mounting public pressure and introduce desperately needed transparency and reforms, beginning with the publication of the White House visitor logs and Donald Trump’s tax returns.

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Sam Richards is a tax accountant.

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