Which of these things is not like the others: Donald Trump, Hillary Clinton, Bernie Sanders, Ted Cruz, and John Kasich?
If you guessed Clinton, you’re right. She’s the only presidential candidate to actually release complete copies of her personal income tax returns. She may have a reputation for being shifty, but she’s the most transparent candidate when it comes to her taxes.
Three of the other candidates say they have released their returns, but it’s not true. Sanders, Cruz, and Kasich have all released just the Form 1040. That’s not a complete return, as the IRS will be happy to tell you. If you have any doubts, just try filing one by April 15 -- omitting all the other required forms, schedules, and statements. You’ll be hearing from the agency in short order.
As for Trump, he has consistently refused to release any portion of his returns, including the Form 1040. While thumbing his nose at four decades of tradition, he’s offered up a variety of excuses, saying his returns are too big, too complicated, or still unfinished.
Most recently, Trump has explained his failure to release by saying that his returns are under audit by the IRS. He seems to think that’s a real excuse, but it’s not. There is no legal bar to releasing a tax return while it’s being audited, as the IRS has confirmed.
More to the point, there’s precedent for releasing returns while they’re being audited: Richard Nixon did it more than 40 years ago.
Nixon was not a guy naturally inclined to be transparent. But in the fall of 1973, he was in a world of hurt concerning his personal finances. In particular, critics were suggesting there was something fishy about his tax returns. Nixon defended himself, even insisting to one dubious audience that “I’m not a crook.”
But the questions kept coming, and eventually Nixon tried to clear things up by releasing his tax returns. In December 1973 he made the returns public and asked the congressional Joint Committee on Internal Revenue Taxation (today called simply the Joint Committee on Taxation) to examine them for errors. (You can see examine Nixon’s returns for yourself by visiting the Tax History Project, which archives all presidential tax returns.)
And as it turned out, the JCT did find problems in the returns – to the tune of $476,431. That’s real money (about $2.5 million in today’s dollars), and it reflected real errors on Nixon’s returns. (For details on the Nixon investigation, see my paper for the JCT’s 90th anniversary celebration in February.)
But here’s the crucial point: The JCT was not the only government body examining Nixon’s returns after he made them public. The IRS was doing it too. The president’s returns had already been audited once, but the agency began a second audit just before Nixon made his public release.
Ultimately, the IRS reached much the same conclusion as the JCT: Nixon owed almost half a million dollars in unpaid taxes and interest. Eventually, Nixon promised to make good on the deficiency.
But here’s the relevant point for Trump: Nixon released his returns even though he was under audit. Ultimately, the audit didn’t go well for him-- it was unpleasant, embarrassing, and ultimately very expensive.
But it was also necessary, given the persistent questions about Nixon’s returns.
Thanks to Trump’s stonewalling, there are now plenty of questions about his tax returns. Presumably, Trump is just as convinced as Nixon that he “is not a crook.” If so, he should follow Nixon’s lead and release his tax returns.