WASHINGTON — The Internal Revenue Service failed to audit former President Donald J. Trump during his first two years in office despite a program that makes the auditing of sitting presidents mandatory, a House committee revealed on Tuesday after an extraordinary vote to make public six years of his tax returns.
Mr. Trump filed returns in 2017 for the two previous tax years, but the I.R.S. began auditing those filings only in 2019 — the first on the same day in April the Ways and Means Committee requested access to his taxes and any associated audits, a report by the panel said. The I.R.S. has yet to complete those audits, it said, and the agency started auditing his filings covering his income while president only after he left office.
The revelation could transform the political context of the committee’s nearly four-year fight to obtain information about Mr. Trump’s taxes and any related audits. Its chairman, Representative Richard E. Neal of Massachusetts, had said the panel needed the data to assess the I.R.S.’s mandatory presidential audit program, but Mr. Trump’s lawyers and Republicans called that a pretext for a politically motivated fishing expedition.
The suggestion of dysfunction in the auditing program was an early takeaway in what could be a series of disclosures related to the release of Mr. Trump’s returns. Democrats said it might be several days before thousands of pages of tax filings from Mr. Trump and several associated businesses from 2015 to 2020 became public as they redacted sensitive details, like street addresses and bank account numbers.
But a Joint Committee on Taxation staff report released Tuesday night included some details from his tax filings.
When combined with tax records previously obtained by The New York Times, the records show that in 2018, Mr. Trump had positive taxable income for the first time in more than a decade. That change occurred largely because he had sold properties or investments at a gain of $22 million, and he appears to have exhausted the business losses he had been rolling over year after year. As a result, he paid $999,466 in federal income taxes for 2018. But his long-term pattern of reporting negative income returned by 2020, and he paid no federal income taxes for that year.
The party-line vote to release the materials came during the last weeks of Democratic control of the House after Republican gains in the midterm election. The committee invoked a century-old statute that allows it to lawfully make public otherwise confidential tax information involving Mr. Trump, who had defied tradition by refusing to disclose his financial information as a presidential candidate and sitting president.
The committee debated behind closed doors for more than four hours before voting to make public Mr. Trump’s returns. The move brought to an end a prolonged battle by the House to obtain Mr. Trump’s returns.
After the vote, Mr. Neal, who as the committee’s chairman requested Mr. Trump’s tax returns from the Treasury Department, praised the panel’s handling of the documents.
“This was not about being punitive,” he said. “This was not about being malicious. And there were no leaks from the committee. We adhered carefully to the law.”
But Republicans on the committee portrayed the decision as unjustified, setting a dangerous precedent and eroding a norm against exposing private taxpayer information that risked paving the way for lawmakers to routinely expose political adversaries’ private finances.
Representative Kevin Brady of Texas, the top Republican on the panel, condemned the vote afterward. “So regrettably, the deed is done,” he said. “What was clear today is that public disclosure of President Trump’s private tax returns has nothing to do with the stated purpose of reviewing the I.R.S. presidential audit process.”
It was not immediately clear why the I.R.S. delayed starting auditing the tax returns Mr. Trump filed as president.
After a scandal related to former President Richard M. Nixon’s taxes, the agency under the Carter administration adopted a program that requires the agency to audit such filings every year.
Its regulations state that “individual tax returns for the president and the vice president are subject to mandatory review.”
John A. Koskinen, the former I.R.S. commissioner who served during the first year of Trump’s presidency, said in an interview that he was not involved in the presidential audit process and that he did not know why the audits did not occur.
“It does seem to me to be a legitimate question: If the I.R.S. had the responsibility and wasn’t auditing, what’s the explanation?” he asked.
Starting in 2018, the I.R.S. was run by a Trump appointee, Charles P. Rettig, who left the post last month. In 2016, Mr. Rettig, then a tax lawyer in Beverly Hills, Calif., published a column in Forbes that defended Mr. Trump’s decision not to release his taxes as a candidate.
The I.R.S. did not immediately comment on the matter after the disclosure late Tuesday. But Mr. Neal said that when the committee had inquired, “Rettig said at different points that they were simply outgunned” and that the I.R.S. said it lacked specialists capable of assessing Mr. Trump’s filings.
Mr. Neal’s report called for Congress to codify into law that the I.R.S. conduct mandatory audits of presidents while they are in office and to publicly disclose related information. It also said the I.R.S. “should provide adequate and appropriate staffing and resources necessary for a full and timely audit of the president,” including specialists on matters like partnerships, foreign income and financial products.
Mr. Neal had first requested access to Mr. Trump’s tax returns in 2019, after Democrats won control of the House in the midterm elections and began trying to perform oversight of Mr. Trump. But the Trump administration would not let the Treasury Department comply with the request.
The panel eventually filed a lawsuit seeking to enforce its request, setting off a legal battle that played out over nearly four years. A Federal District Court judge and a federal appeals court ruled in favor of the committee, and last month, the Supreme Court declined to block the release of the returns to the panel.
Speaker Nancy Pelosi of California praised the effort in a statement, and the House scheduled a vote this week on legislation proposed by Mr. Neal to require an annual audit of the president’s finances, according to a notice from Democratic leaders.
“The Ways and Means Committee’s solemn oversight work has revealed the urgent need for legislation to ensure the public can trust in real accountability and transparency during the audit of a sitting president’s tax returns — not only in the case of President Trump, but for any president,” Ms. Pelosi said. “The American people deserve to know without question that no one is above the law.”
Congress has used the law to release private taxpayer information before, but rarely.
In 1974, a committee relied on that provision to issue a bipartisan staff report of Nixon’s tax returns, which led to the creation of the I.R.S.’s presidential audit program. It centered in part on whether he had underpaid income tax by claiming a unjustifiably large deduction for donating his prepresidential papers to the National Archives.
And after a party-line vote in 2014, Republicans used the provision to release information about groups applying for tax-exempt status. At the time, Republicans accused the I.R.S. of targeting conservatives because it had used words like “tea party” when selecting applicants to scrutinize for political activity that would make them ineligible for tax-deductible donations. But it turned out the I.R.S. had also used words associated with liberals, like “progressive” and “occupy.”
It is not clear whether the release of the records would reveal major findings given past disclosures about Mr. Trump’s finances.
Prosecutors in New York had already obtained access to some Trump-related tax data, and his family business has been the subject of multiple investigations. The Trump Organization was convicted of a tax fraud scheme this month. The New York attorney general has sued Mr. Trump and three of his children, accusing them of lying to lenders and insurers by fraudulently overvaluing his assets.
Although the returns the committee received contain more recent data, The Times has also investigated Mr. Trump’s taxes, including obtaining tax-return data in 2020 that covered more than two decades. He paid no federal income taxes in 11 of 18 years that The Times examined; he also reduced his tax bill with questionable measures, including a $72.9 million tax refund that, as of 2020, was the subject of an I.R.S. audit.
The Joint Committee on Taxation report released Tuesday said that in September 2020, after The Times published its investigation, the I.R.S. met to discuss issues the reporting had raised about Mr. Trump’s 2017 filings — spurring the agency to look at them, too.
Before the vote, Republicans also criticized Democrats for issuing an analysis of Mr. Trump’s taxes, portraying them as hasty and noting that they had only studied them for a few weeks.
But House Democrats faced a time squeeze because Republicans on the committee will most likely drop the matter when they take over next month, and Mr. Trump had used the slow pace of litigation to run out the clock on their oversight efforts.
That effort faced further delay after the committee’s lawsuit landed before a Trump appointee, Judge Trevor N. McFadden of the Federal District Court for the District of Columbia.
Judge McFadden waited nearly two and a half years before ruling on the matter. When he finally issued a decision in late 2021, he acknowledged that the law was on the committee’s side but warned that he thought putting out Mr. Trump’s taxes would be a bad idea.
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