As we all know, the prudent taxpayer is expected to openly report their tax liabilities and business ventures.
Donald Trump, the outspoken GOP nominee, has denied rumors that he has any financial ties to Russian Oligarchs.Trump has been asked to release his tax returns. In response, his campaign manager has stated that Trump’s taxes are under audit and that he will not release them at this time. This reluctance, to some, is troubling. The release of a candidate’s taxes is a political tradition that dates back almost half century. The idea is to provide taxpayers with information about their potential candidate (i.e. spending habits, charitable donations, potential conflicts of interest).
One may argue that there is no legal obligation to release one’s tax return. However, amidst rumors that the Russian government was behind the DNC hack, it may be a wise choice for Trump to clear his name. The U.S. government has not made a final determination as to whether the hacks were run-of-the-mill espionage, or a larger calculated plan to manipulate the presidential election.
Taking it a step further, Trump would need to release more than just the top two pages of his 1040 to gain valuable information into his Russian ties. We would need to see the attached forms and schedules, as it is here that will reveal potential tax credits for taxes paid to foreign governments. The U.S. government requires filers to disclose money held in foreign bank accounts. Failure to do so results in harsh penalties.
Further, if Trump received income from an investment partnership, he would have to report it, but it may not be clear whether that partnership has a lot of Russian investments or investors. He would have to include the partnership’s legal address. While the address alone wouldn’t necessarily indicate a strong Russian tie, more might be revealed by looking at the tax returns or other documentation from the partnership itself.