House Democrats seeking President Trump’s tax returns aim to investigate whether his Bedminster, N.J., golf club broke the law in a way that would mirror one of the first political scandals of Bill Clinton’s administration.
Trump’s golf course reportedly employed multiple workers who immigrated to the U.S. illegally and hid their status. In doing so, it may have failed to pay payroll taxes, a violation of the law.
The same issue tripped up the nomination of Clinton’s first attorney general pick, Zoe Baird. Baird, the first female nominee for attorney general, hired two illegal immigrants as domestic workers and failed to pay payroll taxes for their labor.
The golf course’s handling of payroll taxes one of the myriad of issues congressional Democrats say they want to unpack with their demand for Trump’s tax returns, issued this week.
A committee staffer with knowledge of the investigation said that Democrats also want to learn more about whether Trump’s businesses, including the Bedminster golf club, are included as part of the mandated audit of sitting presidents and vice presidents.
The vast majority, if not all, of Trump’s income is believed to be passed through to him through his businesses, which are owned by him and his family. If Trump’s businesses are not under audit, that could obscure the nature of his personal income from the IRS’ automatic review, which was put in place after former President Richard Nixon owed over $400,000 to the IRS due to years of underpaying his taxes.
“Are they [the IRS] looking at his business returns? Are they looking at the golf courses, are they not?” said a Democratic staffer with the House Ways and Means Committee, the congressional panel now seeking Trump’s taxes through a law that grants it broad authority to request tax information. Staff physically handed the request to IRS Commissioner Charles Rettig following a meeting the agency head had with the committee, which the staffer said was related to another issue, late on Wednesday.
The staffer said that committee Chairman Richard Neal, D-Mass., asked for Trump’s previous six years of business and personal returns because the IRS destroys documents outside that window.
The committee also confirmed it is looking into whether Trump may have abused an environmental tax break, known as a conservation easement, for the golf course. Trump reportedly received a $39.1 million tax break for the Bedminster course. The committee only asked for tax information related to that one course because it believes that will reflect Trump’s tax practices at his other golf properties.
A former congressional staffer with experience in tax investigations, who also asked for anonymity given the sensitive nature of the topic, thought the committee was right to look into the issue, given the parallel to Baird’s situation.
“There have been nominees for very important positions in government who have not been confirmed for not paying taxes on employees,” the former staffer said. “That’s one of the key things in confirmation: Have you paid taxes on household employees?”
In practice, presidential cabinet nominees have typically handed over three years’ worth of their most recent tax returns when undergoing their confirmation process in the Senate. The heads of the Ways and Means Committee, Senate Finance Committee, and the chief of staff of the Joint Committee on Taxation all have authority under the law to request and review tax returns. But unauthorized release of that information comes with stiff legal penalties, including up to five years in prison.
The former staffer said that Ways and Means would need to tread carefully to avoid politicization of the tax investigation and the use of that power.
“My experience has been that members don’t understand what they can talk about and what they can’t talk about,” said the former staffer, who added that seeking the returns with the sole goal of publicizing them, as some progressives want to do, would be a mistake. But he added: “I don’t think that’s what House Ways and Means intends to do.”
