Bloomberg Law
Feb. 23, 2021, 12:49 AM

Trump Taxes, Long Guarded, Will Soon Be in Prosecutor’s Hands

Greg Stohr
Greg Stohr
Bloomberg News

Donald Trump, who managed to keep his tax returns a secret the entire time he was in the White House, is about to see them fall into the hands of a New York prosecutor looking into possible criminal charges against him.

Manhattan District Attorney Cyrus Vance Jr. subpoenaed Trump’s accounting firm for eight years of records in 2019, but the then-president took the case to the U.S. Supreme Court, twice. On Monday, the justices abruptly rejected Trump’s final bid to block Vance, a Democrat.

Trump’s refusal to release his taxes during the 2016 campaign, falsely claiming he couldn’t because he was under audit, marked a break with every presidential candidate of the last four decades. Once in office, he fought tooth and nail to keep them secret, challenging the oversight powers of the House tax committees that had previously been understood to have the power to examine any taxpayer’s return. Congress still doesn’t have Trump’s taxes.

Many details of Trump’s taxes have emerged, notably in the New York Times last fall, but Vance will be receiving the returns as part of a criminal probe that looms as one of the biggest legal threats facing the former president and his company, the Trump Organization Inc. In August, Manhattan prosecutors suggested in court papers they may be looking into tax fraud, insurance fraud, and falsification of business records charges.

New York Attorney General Letitia James is separately examining whether the Trump company inflated values of some of its properties, and Trump may also be part of a criminal probe in Atlanta over attempts to influence the 2020 Georgia vote count.

‘They’d Find It’

With Trump’s tax returns, Vance’s investigators will be able to compare statements made by the Trump Organization to the Internal Revenue Service with claims made to banks, insurers and other parties.

“Now they have the evidence that the accounting firm and the corporation have,” said John Moscow, a former chief prosecutor for serious economic crimes at the Manhattan district attorney’s office. “At this point, Trump’s position has to be that he didn’t do anything wrong, because if he did, they’d find it.”

Trump issued a statement on Monday calling Vance’s investigation “a continuation of the greatest political witch hunt in the history of our country,” connecting it to Special Counsel Robert Mueller’s probe of Russian interference in the 2016 election and two unsuccessful impeachment attempts. He suggested prosecutors in “far-left states and jurisdictions” were trying to “to take out a political opponent.”

Vance has been beefing up his team in anticipation of receiving Trump’s tax records. Late last year, the district attorney hired FTI Consulting, a leading forensic accounting firm, to assist in the investigation. Earlier this month, Mark Pomerantz, a former federal prosecutor, came aboard as a special assistant district attorney, according to Vance’s spokesman, Danny Frost.

Gotti Prosecutor

As head of the criminal division of the Manhattan U.S. Attorney’s office from 1997 to 1999, Pomerantz oversaw complex fraud and organized crime prosecutions, including that of organized crime boss John Gotti Jr. Since then, he’s been a top corporate defense lawyer at Paul Weiss Rifkind Wharton & Garrison, from which he is taking a leave of absence to work with Vance.

Trump’s accounting firm, Mazars USA, isn’t contesting the subpoena. Mazars declined to comment on the Trump tax records Monday, but said it was “committed to fulfilling” its professional and legal obligations.

Any material Vance receives from Mazars would be covered by laws protecting grand jury secrecy, meaning it isn’t likely to become public anytime soon.

The public learned a good deal about Trump’s financial situation in September when the New York Times published an analysis of at least two decades of Trump’s tax records, reporting that he paid just $750 in federal income tax in 2016 and in 2017. The Times said Trump reported huge business losses, effectively wiping out all income taxes in 10 of the previous 15 years as well.

Lisa Griffin, a law professor at Duke University, said it was unclear there would be much more for the public to learn from Trump’s actual returns. “It’s entirely possible that we know the most significant facts about his indebtedness,” she said.

Rejected Immunity

The high court had deferred acting in the case for four months, waiting until Trump again became a private citizen to take a step that could boost a probe that initially focused on hush-money payments to adult-film star Stormy Daniels and another woman who claimed to have sexual relationships with Trump years before he became president. Vance’s investigators have already gotten hold of some of the tax records from other sources, according to people familiar with the matter.

Monday’s rejection effectively shut down the avenue the high court left open for Trump in July, when the justices rejected his claim of sweeping immunity for sitting presidents from state criminal subpoenas but said he could press more specific objections. Two lower courts rejected Trump’s contention that the subpoena was too broad and was issued in bad faith, prompting the now-former president to turn to the Supreme Court.

Read more: A QuickTake explains moves to make Trump’s tax returns public

Vance had agreed to hold off enforcing the subpoena while the Supreme Court considered Trump’s new arguments.

Trump told the Supreme Court he will suffer “irreparable harm” if the materials are turned over. “Even if the disclosure of his papers is limited to prosecutors and grand jurors, the status quo can never be restored once confidentiality is destroyed,” his lawyers said in court papers.

Vance said the year-plus delay has already hampered the investigation.

‘A Lot to Do’

Trump “has had multiple opportunities for review of his constitutional and state law claims, and at this juncture he provides no grounds for further delay,” Vance argued. “His request for extraordinary relief should be denied, and the grand jury permitted to do its work.”

Following the Supreme Court order, Vance’s office said, “The work continues.”

Given the complexity of Trump’s financial statements, the broad range of records that Vance’s office will now have to pore over and the political sensitivity surrounding an investigation of this magnitude, the process will take time, said Moscow.

“There’s a lot to do,” he said. “It’s not going to be quick, it’s going to be thorough.”

Congress could also soon get its hands on Trump’s taxes too. Treasury Secretary Janet Yellen could theoretically turn over the returns at any time, but the new administration earlier this month told the judge overseeing the House suit demanding them that it needed more time to determine its position in light of the ongoing transition.

--With assistance from Mark Niquette.

To contact the reporters on this story:
Greg Farrell in New York at;
Greg Stohr in Washington at

To contact the editors responsible for this story:
David Glovin at

Anthony Lin, Elizabeth Wasserman

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