By Sam Brunson
Last night, Rachel Maddow dropped a bombshell: reporter David Cay Johnston had a leaked copy of Donald Trump’s 2005 tax return, and he shared it on her show.
Okay, maybe it wasn’t entirely a bombshell; in our leak–happy environment, it was almost inevitable that we’d eventually see some of Trump’s returns. And this barely counts as a return: it’s just his Form 1040 from 2005 (that is, the first two pages of a return). When I grade voluntary presidential candidate tax disclosures, one year’s Form 1040 realistically gets you a D+; the 1040 says how much you ultimately paid in taxes, but very little more than that. (For example, you can see that Trump had itemized deductions of just over $17 million, but you can’t tell what itemized deductions he took. I mean, is it mortgage interest? state and local taxes? charitable contributions? some combination? Without the full return, we have no way of knowing.)
Unsurprisingly, Trump is not happy with this disclosure. A White House spokesperson put out a statement that says, among other things:
Despite this substantial income figure and tax paid, it is totally illegal to steal and publish tax returns.
Is that right that it is illegal to publish Trump’s tax returns?
Maybe. But it depends.
Broadly speaking, Section 7213(a) of the Code makes it a felony for federal and state employees to disclose taxpayers’ tax returns. (That’s a slightly unnuanced description of the law, but it’s good enough for our purposes here.) Section 7213(a)(3) also makes it unlawful for
any person to whom any return or return information (as defined in section 6103(b)) is disclosed in a manner unauthorized by this title thereafter willfully to print or publish in any manner not provided by law any such return or return information.
The language here is slightly ambiguous. It could be read to say that it is a felony to willfully print returns obtained in any manner not explicitly authorized by the Code. That seems a stretch, though; I think a better reading is that section 7213(a)(3) makes it a felony to publish tax returns if the publisher received those tax returns from a federal or state employee, whose disclosure of those returns violated the law.
My reading is buttressed, I believe, by the legislative history. The Senate Report for the Tax Reform Act of 1976 explains that criminal penalties apply
to any person who prints or publishes any return information which he knows was disclosed to him in violation of the law.[fn1]
The Ninth Circuit agrees, and has stated that convicting someone under section 7213(a)(3) requires the government to prove that (a) the disclosure was “unauthorized,” and (b) the publisher of the return “knew that the information was disclosed to him in violation of the law.”[fn2]
Under this standard, Johnston and Maddow probably didn’t violate the law by publishing the returns. My understanding is that they don’t know who leaked the return, so it is hard for them to know that it was leaked in violation of the law. And, in fact, the return itself has evidence that it probably wasn’t leaked by a government employee: the second page has a “Client Copy” stamp on it, and it lacks Trump’s signature. That is, this particular Form 1040 almost certainly wasn’t leaked in violation of section 7213.
Even if I’m wrong about the scope of section 7213(a)(3), though, I still suspect that Johnston and Maddow are unlikely to face criminal sanctions. In Bartnicki v. Vopper,[fn3] the Supreme Court addressed this question:
Where the punished publisher of information has obtained the information in question in a manner lawful in itself but from a source who has obtained it unlawfully, may the government punish the ensuing publication of that information based on the defect in a chain?
In that case, somebody had surreptitiously intercepted a cell phone conversation between a union negotiator and the union president. The unknown person had provided the call to the media, and a radio host played it. Taping the cell phone call violated state and federal wiretapping laws. Disclosing contents of an electronic communication that a person knows or has reason to know was obtained illegally violated the state and federal statutes.
The case is not directly on point with the question of publishing Trump’s tax returns, of course. It dealt with wiretapping, not tax privacy, and provided a civil, rather than a criminal, cause of action. Moreover, the Court said that it deliberately chose to decide the case more narrowly than it could have.
But it’s at least instructive. And, in the Bartnicki case, the Court held that, while privacy concerns were important, they were not as important when balanced against publishing “matters of public importance.”
Although the law does not require the president to disclose his tax returns, seeing them is almost certainly a matter of public importance. If that’s true, then even if I’m wrong about the scope of section 7213(a)(3) (that is, even if section 7213(a)(3) applies to the publication of any return that was illegally obtained, irrespective of who obtained it), it’s still unlikely that the government could successfully impose criminal sanctions on Johnston or Maddow, because their free speech rights in this case probably outweigh Trump’s privacy rights.
[fn1] S. Rep. No. 94-938 at 348.
[fn2] Matter of Seper, 705 F.2d 1499, 1502 (9th Cir. 1983).
[fn3] 532 U.S. 514 (2001).
The Surly Subgroup 
It’s JohnsTon. David Cay Johnston.
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Thanks. Fixed.
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As a recovering tax nerd, I enjoy the effort undertaken to educate us civilians with lively and accurate tax information by the Surly Subgroup.
The posting concludes that it is unlikely that any tax law was violated when a couple of pages of Donald Trump’s 2005 Form 1020 was publicly posted because the return ain’t likely a document furnished by a government employee. It was more likely a document submitted by Trump to obtain a loan or for some other business purpose unrelated to a tax return filing. The document shows no markings that it was received by the IRS, such as a document locator number or date of receipt.
However, I come at this from a slightly different perspective. For penalties to apply under IRC 7213(a), the disclosure must be a return or return information.
1. Under IRC 6103(b)(1) “[T]he term “return” means any tax or information return, declaration of estimated tax, or claim for refund required by, or provided for or permitted under, the provisions of this title which is filed with the Secretary by, on behalf of, or with respect to any person, and any amendment or supplement thereto, including supporting schedules, attachments, or lists which are supplemental to, or part of, the return so filed.”
The leaked document does not appear to have been filed with the IRS. It appears to be a copy that was not the one filed. Therefore, the leaked document is not a return filed with the IRS. I suspect the law was intended to put teeth into a problem the IRS was having with its employees taking a peak at sexy tax returns and revealing some salacious information to reporters and opposition parties. I guess the penalties are broad enough to cover anyone who receives a tax return from a government source and discloses it without permission.
2. Under IRC 6103(b)(3) “[T]he term “taxpayer return information” means return information as defined in paragraph (2) which is filed with, or furnished to, the Secretary by or on behalf of the taxpayer to whom such return information relates.
3. Under IRC 6103(b)(2) “[T]he term “return information” means— a taxpayer’s identity, the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, overassessments, or tax payments, whether the taxpayer’s return was, is being, or will be examined or subject to other investigation or processing, or any other data, received by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a return or with respect to the determination of the existence, or possible existence, of liability (or the amount thereof) of any person under this title for any tax, penalty, interest, fine, forfeiture, or other imposition, or offense,
Again, the return information is not information that was filed with, or furnished to, the IRS by or on behalf of the taxpayer.
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Oops. I meant 1040. Not 1020
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Thanks for this insightful analysis. I was curious on the reasoning for your conclusion in the last paragraph though — is there really a “matter of public importance” (in a legal sense) in the public having access to Trump’s returns? Obviously the public is curious and interested, and many would find it important. But, as you say, there is no actual requirement for a President to make this disclosure; the election was held and all voters had an opportunity to make their decisions without it, with its absence highly publicized (whether one supports the decision or not); and non-disclosure was the status quo for all Presidents prior to Nixon, based on Maddow’s long preamble.
I haven’t read the Bartnicki decision cited, but based on your discussion it sounds as if the controversially-obtained evidence in that case may have related to a specific ongoing investigation, creating the “public importance” — which is not (yet?) the case for Trump. Although Maddow and others believe Trump’s tax returns may reveal evidence of improper financial ties, as of yet, I don’t believe Trump has been formally accused of anything specific (although the FBI and others may be investigating Russian ties, so that could change).
“Although the law does not require the president to disclose his tax returns, seeing them is almost certainly a matter of public importance. “
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Curious One, the Bartnicki case dealt with “contentious collective-bargaining negotiations between a union representing teachers at a Pennsylvania high school and the local school board.” So it wasn’t related to an ongoing investigation (though I apologize if my summary made it sound like that); it was merely an issue of local public interest.
Which is to say, I’m not sure that the lack of a legal obligation for Trump to release his returns takes this out of the protected realm of “public importance.” I actually suspect that his very position as president makes it an issue of public importance.
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Thanks for clarifying. I suppose the hurdle would also be higher if one were trying to bring criminal charges against whoever disclosed/published the information here, compared to a civil case as in Bartnicki.
I briefly skimmed a law review article on presidential privacy rights (https://law.ku.edu/sites/law.drupal.ku.edu/files/docs/law_journal/v17/reyes.pdf) and one section cited Nixon v. Admin’r of Gen. Servs’ standard of requiring a compelling public need… which cannot be met in a less intrusive manner, and separately referred to Nixon’s efforts to keep information out of the public domain. I don’t think those were on point either since we are talking about ability to prosecute a publisher, not compelling the disclosure, but not too hard to imagine the concepts getting jumbled if a dispute made its way onto twitter.
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Why would you read “in a manner unauthorized by this title” to mean “in a manner prohibited by this title”? They mean different things, and are unambiguous. Also, surely it makes sense that there should be a law prohibiting someone from publishing other people’s confidential tax information, even if it was revealed to them accidentally. In this case, the publication was even for profit, for the commercial benefit of Maddow’s employer. Reading it your way (and the 9th circuit’s way), it seems an IRS employee could offer the information for sale for $50,000 to CNN (without revealing his identity), and CNN could pay without doing anything wrong. (Well, maybe not— it might be that, so to speak, res ipsa loquitur, and the “prohibited by this title” would be found by a jury anyway?)
I should add that the other info in this case sure makes it look like Trump leaked the return himself, so I think a jury would acquit Maddow anyway, using “reasonable doubt”.
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That language hung me up, and consumed more late-night minutes than I’d intended on devoting to the post. In the end, though, my reading is supported by judicial decisions and legislative purpose. In addition, it simply makes more sense: there’s no provision that explicitly allows the publication of a return disclosed by the taxpayer herself (or, at least, none that I can think of offhand), so interpreting it that way would subject Maddow to criminal sanctions even if Trump handed her the returns himself.
As for buying leaked returns: 7213(a)(4) prohibits offering anything of material value for a return or return information. So that potential is addressed under current law.
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If it’s legal to publish people’s tax returns without their consent, then why doesn’t the press do it all the time, since there’s no way to figure out who mailed the envelope from the IRS or other offices?
In fact, why bother writing 6103 at all since nobody is ever going to figure out who keeps sending people’s tax returns to the newspapers?
The purpose of the law is to prevent unauthorized people from seeing your tax information, not to prevent federal employees from misbehaving.
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I’d be interested in how you support this; the legislative history largely supports the idea that the problem Congress was mostly interested in IRS employees’ disclosure of tax returns.
Certainly there are potential evidentiary problems with figuring out who illegally disclosed a return, but there are evidentiary issues in all areas of criminal law. The fact that something is hard to provide isn’t evidence that the law was focused on something else.
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Because 26 USC 7213 covers federal employees under section (1), federal employees and others, where “others” refers to all the contractors the IRS needs to handle the returns. It covers state and other employees under section (2) state and other employees. It covers Rachel Maddow under (3) others, which refers to anyone who might receive a copy of a tax return from the parties who violated sections (1) or (2).
If you find someone else’s tax returns in your hot little hands, and the filer or his agents didn’t give you permission to reveal its contents, then it is a felony for you to print or publish them.
That’s why Entertainment Tonight isn’t always running stories about leaked tax returns of the stars. They would go to prison for it.
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I wonder if this had something to do with Maddow’s long speculation that, perhaps, it could have been Trump himself who leaked the return. I.e., it provided a plausible means by which the returns could have been obtained legally.
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I’m surprised that it wasn’t illegal for federal employees to publish people’s tax returns even before 1976. Is there perhaps some other law that criminalizes the publication of confidential disclosures to the federal government? For example, if some Commerce employee sells confidential corporate sales information to their competitors, is there no law that would punish him? Or, going beyond disclosures to government info generally if some SEC employee sells the news of a secret investigation to the target, would that not be illegal?
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