The disclosure Thursday that prosecutors are investigating President Trump for possible obstruction of justice raises questions about what investigators will seek to know from the president’s tax returns.
What does it tell us?
The focus on the president has nothing to do with tax returns, at least not directly.
For one thing, the Trump tax returns being discussed are much older. While a president may voluntarily turn over his tax returns to the IRS, that’s a different matter than what prosecutors may demand, according to experts.
So, the president, with his lawyers, could turn over his returns, but prosecutors could legally request them in an investigation anyway.
“Anything we learn about the inner workings of the Trump Organization can and will be an important piece of evidence,” said Robert Weissman, president of Public Citizen, a public-interest group that advocates for government transparency.
What would prosecutors want?
Experts say prosecutors seeking information about Trump’s business activity is not new, and prior presidents, such as Richard Nixon, have granted the government copies of their tax returns.
When the Clintons returned tax returns in 2009, the request included general information about their finances.
But Trump could be a different case. For one thing, Trump has no business ties to Russia, at least not yet.
“I think this is the first time that I know of that prosecutors have gone after Trump over his tax returns,” said Steven Schwartz, a professor at Stetson University College of Law in Florida who specializes in federal investigations.
It’s possible, though, that prosecutors would pressure Trump and his legal team to turn over tax returns that would show how he’s profiting from Trump Organization partners and partners such as Deutsche Bank in Germany, or cooperating with offshore tax havens.
How likely is this to happen?
Experts say it’s difficult to gauge the prosecutor’s motive.
“Prosecutors have a lot of tricks up their sleeves,” said Laura Ries, president of Ries & Ries, a national brand-public relations firm based in Atlanta.
Prosecutors could go to the IRS to see what Trump’s business arrangements with Deutsche Bank or foreigners like Russian banks are like. Or they could demand information about how the president has used his offices to benefit business or personal interests.
After all, Ries said, there’s no statute of limitations on conspiracy to commit obstruction of justice.
Here’s more about what Trump’s tax returns might reveal
In broad strokes, the president’s income from real estate is likely his most significant source of income. The top tax rate for real estate investments and income is just 18 percent, so it’s very likely Trump earned a lot of his income from that.
A lot of Trump’s vast income stream, though, comes from interest on residential real estate, such as mortgages on Trump properties. If Mueller is looking for something in his tax returns, it could be to show if Trump aided or abetted payoffs from Russians to former mistress Stormy Daniels, or anyone else, on behalf of Trump or his family members.
“They can ask the IRS for that information to see whether these payments were disguised as his profits,” Ries said.
The receipt of the payments could be incriminating, because it shows the president was involved, she said.
Here’s more about what the question of Trump’s tax returns means to taxpayers