Are Presidential Candidates Required to Release Their Tax Returns?

Why Most Politicians Reveal Their Tax Records to the Public

Richard Nixon
Richard Nixon after receiving the 1968 presidential nomination at the Republican National Convention in Miami. Washington Bureau/Getty Images

Almost every modern presidential nominee has voluntarily released their tax returns for public inspection before Election Day. Mitt Romney did. Barack Obama did. Hillary Clinton did. But there’s no law that requires presidential candidates to reveal their personal tax records. 

Most presidential candidates release their tax returns because they believe it reaffirms their commitment to be transparent with voters. Some presidential candidates also want to show voters how much they pay in taxes and how much they contribute to charity. Refusing to disclose tax returns can actually be detrimental to a candidate and their campaign but it suggests they are hiding something.

The only presidential nominees since who refused to make their tax returns public since Richard Nixon, who was infamously paranoid and fought to keep his tax records from being made public, were Donald Trump and Gerald Ford. Ford released his returns after taking office.

Why Donald Trump Did Not Release His Tax Returns

Donald Trump repeatedly declined to release the records during his campaign for president in 2016 because, he said, he was undergoing an audit by the Internal Revenue Service. "When the audit ends, I’m going to present them. That should be before the election. I hope it’s before the election," Trump said.

IRS regulations do not, however, preclude a presidential candidate from making his or her income tax records public. “Nothing prevents individuals from sharing their own tax information,” the IRS states. In fact, at least one other president, Nixon, made his tax returns public while under an audit. “People have got to know whether or not their President is a crook. Well, I am not a crook," he said at the time.

Trump’s refusal to release his tax records became a major issue in the 2016 presidential campaign because it was believed he did not pay income taxes for many years. That such a wealthy businessman - Trump claimed he was worth as much as $10 billion - was able to avoid paying income taxes was considered unconscionable to many of his critics.

“While millions of American families, including mine and yours, were working hard and paying their fair share, it seems he was contributing nothing to our nation,” Democratic presidential nominee Hillary Clinton said.

Still, exactly how much Trump had paid in federal income taxes was unconfirmed and an anonymous donor promised to donate $5 million to charity if the presidential nominee released his return. He declined.

in 2016, The New York Times published portions of Trump's 1995 tax return, which showed the wealthy real-estate magnate and reality television star declared a $916 million loss - a loss that would have allowed him to avoid paying federal income taxes for nearly two decades, at least through the 2016 presidential election.

Trump did not deny the report. A written statement issued by his campaign acknowledge his payment of property, sales and other taxes, but not any payment of federal income taxes.

“Mr. Trump is a highly-skilled businessman who has a fiduciary responsibility to his business, his family and his employees to pay no more tax than legally required. That being said, Mr. Trump has paid hundreds of millions of dollars in property taxes, sales and excise taxes, real estate taxes, city taxes, state taxes, employee taxes and federal taxes. Mr. Trump knows the tax code far better than anyone who has ever run for President and he is the only one that knows how to fix it.”

The Richard Nixon Tax Return Case

Prior to Trump, Gerald Ford, Nixon and Franklin Delano Roosevelt did not make public their tax returns while seeking office. Nixon made his returns public after details of his records were leaked to the press while he was president. Nixon's refusal to make his tax records public, couple with the Watergate break-in, generated intense distrust in public institutions. He later acknowledged paying little in federal income taxes.

But Nixon also admitted that he donated his records as vice president the National Archives and that the IRS appraised the papers at $500,000. Nixon sought a tax deduction in that amount on his federal income-tax forms, according to newspaper records.

"I can only say that what we were told was the right thing to do and of course what President Johnson has done before. And that doesn't prove certainly that it was wrong because he had done exactly what the law required," Nixon said in 1973.

Why Tax Returns are Important

Tax returns show how much a presidential candidate earned in salary and how much they paid in income taxes. They will not show how much the candidate paid in other taxes such as property taxes on land and homes they owe. But a candidate’s wealth is relevant, particularly in modern times, as income inequality has grown and politicians have gotten richer.

Tax returns also show the specific deductions and tax credits taken by a presidential candidate, what investments they hold, how much they gave to charity and nonprofit organizations, unpaid debts and business relationships.

Joseph J. Thorndike, a tax historian and director of the Tax History Project at Tax Analysts, said the information gleaned from a candidate’s returns serve to put “hard data behind a candidate’s breezy claims to probity, generosity, and honesty.”

“Returns can also tell us how much tax a candidate pays in taxes, which by extension tells us about her average tax rate. In a political world of Buffett rules and millionaire surcharges, that sort of information is interesting and maybe even relevant to a candidate’s bid for office. But other factors are even more important. Returns can shed light on the way a candidate lives his life. It can tell us about charitable giving as well as personal borrowing and investment activity. Returns can also illuminate the complicated business arrangements that often provide the bulk of a candidate’s income, especially for a real estate mogul like Trump.”

Likewise, the Sunlight Foundation’s John Wonderlich said “public expectations for transparency demand no less” than full disclosure of tax information from a presidential nominee.

“Just as presidential candidates are required to submit personal financial disclosure forms to the Federal Election Commission, they could be required to submit their tax returns for public review. An orderly, enforceable, rule-based process would let us skip the drama and doubts, and ensure access to what we already expect of our candidates: a reasonably clear view into their financial lives.”

Bills Requiring Tax Returns Be Made Public

Trump’s refusal to release his tax returns prompted several Democrats in Congress to propose a law requiring future nominees to do so. The Presidential Tax Transparency Act of 2016 would have amended the Federal Election Campaign Act of 1971 to require any candidate of a major party for president to file three years of tax returns with the Federal Election Commission. The record would then become public under the proposal.

“A tax return furnished to the FEC by a candidate or by Treasury shall be treated in the same manner as a report filed by the candidate and, except for the appropriate redaction of certain information, shall be made publicly available at the same time and in the same manner as other reports and statements,” according to the Presidential Tax Transparency Act of 2016.

The proposal, authored by U.S. Sen. Ron Wyden or Oregon, had fewer than a dozen cosponsors from the 100-member Senate. It did not move from the Senate Committee on Rules and Administration and was unlikely to ever become law.

“Since the days of Watergate, the American people have had an expectation that nominees to be the leader of the free world not hide their finances and personal tax returns,” Wyden said in announcing the legislation. “The reality is for 40 years, there has been a good government, transparency-in-politics standard. The bottom line is you just don't get to hide your tax return from public view when you're running for president of the United States."

Can the President Reveal a Candidate’s Tax Returns?

There has been some speculation that a sitting president could reveal tax returns for candidates seeking the office for political purposes. And it is true that a president does have the ability to request any taxpayer’s returns under the Internal Revenue Service Code. The provision of the IRS Code that grants authority to a president to obtain someone’s tax return reads:

“In general, upon written request by the President, signed by him personally, the Secretary shall furnish to the President, or to such employee or employees of the White House Office as the President may designate by name in such request, a return or return information with respect to any taxpayer named in such request.”

But such a move is unlikely given the public’s likely opposition to the government revealing records that are otherwise considered confidential.

Obama's spokesman said during the 2016 campaign, for example, that the president would not seek or release Trump's tax returns. "I’ve not heard of this potential option. I think it is rather unlikely that the president would order something like that," Obama press secretary Josh Earnest said in 2016.