According to Josh Dawsey and Jeff Stein of the Washington Post, an internal IRS legal memo agrees with most outside observers that the Treasury Department has no legal standing to reject congressional Democrats’ request to hand over President Donald Trump’s tax returns.

The 10-page memo, according to the Post, states that the law “does not allow the Secretary to exercise discretion in disclosing the information provided the statutory conditions are met.” It says that conceivably, the White House could try to mount some kind of executive privilege claim but that the Treasury secretary’s stated rationale for refusing to comply is bunk.

As the legal battle between Congress and the executive branch heats up, it’s significant that the executive branch’s career lawyers are aware that the executive branch’s position is bunk. That’s all the more true now that we are starting to get a partial picture of what Trump has been trying to hide since ducking releasing his tax returns during the 2016 campaign and then sidestepping demands from Democrats in Congress to see them.

The New York Times has delivered two major investigative scoops — unearthing tax documents filed by Trump’s father and some documents filed by Trump himself, mostly in the 1980s — that explain how Trump became rich in the first place while paying remarkably little in taxes to the Treasury Department.

Everything the Times has found so far is much too old to be the basis for any present-day criminal charges, or even to shed any real light on the current state of Trump’s business operations. The documents do, however, indicate that Trump has been lying to the public about several significant matters, including, most notably, the extent to which his wealth is simply inherited rather than the result of business prowess.

They also indicate some potentially illegal activity as Fred Trump sought to pass wealth tax-free to Donald and his siblings. The statute of limitations has passed, however, and Trump’s sister, a federal judge, abruptly retired in February, ensuring there would be no judicial ethics investigation either.

Trump’s returns also dramatize the extent to which the current policy paradigm in the United States in effect lets the rich and powerful steal money from the Treasury, with limited odds of detection or consequences.

All of this, in other words, is very important and interesting, and it shouldn’t just be glossed over in the daily to-and-fro of politics. But equally important is to understand what these scoops don’t tell us but what complying with congressional demands would: Who is paying Trump right now, and what, if anything, are they getting in return?

Trump claimed $1 billion in tax losses

In early May, the Times published a blockbuster report from Russ Buettner and Susanne Craig based on returns that Trump filed from 1985 to 1994. The IRS had made anonymized returns from the highest earners in America during that time available for public study, and the Times reporters spoke to an anonymous source who had legal access to Trump’s returns. The source told the Times a few key facts about what the returns said, and that allowed the reporters to identify which of the anonymous, publicly available returns were Trump’s — making it possible to analyze them.

This is a somewhat controversial reporting technique, since anonymized IRS data is a useful tool for academic research that the agency has tended to be fairly stingy with for privacy reasons. The fact that the Times has shown a viable journalistic path to de-anonymizing the data makes it likely that the IRS will be even more hesitant to release such information in the future.

The big headline conclusion of analyzing the returns, though, is that over this 10-year period, Trump reported more than $1 billion in business income losses, allowing him to pay no federal income tax for eight of the 10 years, despite his obviously high standard of living.

One takeaway is that, despite his braggadocio, Trump was not, in fact, a successful business leader early in his career. While his father made a lot of money in the not particularly glamorous business of building and operating apartment buildings in Brooklyn and Queens, Trump went big into the Atlantic City casino business. This ended in multiple rounds of bankruptcy, from which Trump only recovered by first ripping off mom-and-pop equity investors in the 1990s and then later by reinventing himself as a reality television star.

However, as Josh Barro writes at New York magazine, it seems inconceivable that Trump actually lost $1 billion himself, simply because (as we will see later) he never had $1 billion to lose.

“The primary lesson of Trump’s massive reported losses from 1985 to 1994 is not that he was a comically bad businessman,” writes Barro, “but that he was comically undertaxed.”

Trump himself would like you to believe that this was all just standard rich-guy tax sheltering, and said as much on Twitter in mid-May.

....you would get it by building, or even buying. You always wanted to show losses for tax purposes....almost all real estate developers did - and often re-negotiate with banks, it was sport. Additionally, the very old information put out is a highly inaccurate Fake News hit job! — Donald J. Trump (@realDonaldTrump) May 8, 2019

One problem with this, however, is that Trump was clearly an outlier.

For several of the years in question, Trump reported larger losses than any other person in the United States. And in 1990 and 1991, Trump’s reported losses were double the losses that anyone else reported to the IRS. It’s certainly possible that Trump and his team of lawyers and accountants were simply a lot more clever than anyone else working in the tax field. But it’s also possible nobody else was claiming losses on this scale because there was no actual legal way to do so, and Trump just happened to get away with it.

At a minimum, based on a separate Times scoop, we have some pretty good evidence that Trump got away with skirting the rules around gift and estate taxes.

The All County Building Supply & Maintenance scam

The earlier scoop, also by the Times, was focused on tax returns filed by Donald Trump’s father, Fred.

The headline conclusion of this exposé was that Trump had been lying over the years about the extent of the financial assistance he received from his dad. Trump has consistently portrayed himself as a self-made man who was helped out by a “small” $1 million loan from his father. The Times revealed that he in fact benefited from over $200 million (more than $400 million in inflation-adjusted dollars) in wealth transfers from his dad, some of which was inheritance, some of which was gifts, and some of which, crucially, was an awfully illegal-sounding scheme.

Fred Trump set up his children in 1992 as the owners of a company called All County Building Supply & Maintenance, which sold boilers, refrigerators, cleaning supplies, and other equipment at unusually high prices to buildings owned by Fred Trump. On its face, this looks a lot like an illegal effort to evade gift and estate tax by masking a wealth transfer as a business transaction. What’s more, Fred Trump then compounded the offense because the buildings in question were rent-regulated and he cited the high prices paid as legal justification for rent increases.

If this loophole is actually legal, then it’s difficult to understand why anyone should ever pay estate taxes. Rather than leaving $1 billion to your heir, you could purchase a pair of socks from your heir for $1 billion and call it a business transaction.

Fred got away with it at the time, however, and by the time the Times published the information, the statute of limitations had expired.

Some shrewd people noticed, however, that there is no statute of limitations on judicial ethics investigations and filed a complaint against Trump’s sister Maryanne, who until recently was a federal appeals court judge. This would have launched an investigation of her that could, were she found guilty of wrongdoing, have implicated the president as well. But she cut the investigation short by retiring as soon as court officials announced that they were going to look into the complaint.

The Trump family has thus seemingly avoided legal accountability for the scam simply because this went down almost 30 years ago. But it raises the possibility that Trump is trying to keep his more recent returns hidden for the slightly banal reason that he’s been getting away with cheating on his taxes and doesn’t think his returns can bear public scrutiny.

We’ve learned a few other embarrassing things

A totally unrelated shady thing the Times found in Trump’s tax returns from the 1980s is that he used to parlay his celebrity status into a kind of pump-and-dump stock scam.

He would secretly buy shares of stock in a company, publicly suggest he was planning to make a bid to buy the whole company, watch the share price rise in response to the Trump takeover rumors, and then sell his shares at a profit without actually doing anything.

He did this successfully with United Airlines in 1987, which led him to try it again with Hilton Hotels, Gillette, and Federated Department Stores in 1988. This was apparently a “fool me five times, shame on you” situation, however; investors caught on to the fact that Trump was running a scam, and it didn’t work anymore. Around the same time, the Securities and Exchange Commission hit Trump with a $750,000 fine related to a different stock transaction — one of several instances of Trump being caught breaking the rules only to be allowed to settle charges with a fine and no admission of guilt.

As president, Trump every once in a while throws global financial markets into a tizzy with unexpected tweets threatening tariffs and trade wars. It would be interesting to know how those market convulsions affect Trump’s finances, but of course we can’t tell because he’s keeping his returns secret.

Separately, the Times report on Fred Trump’s taxes sheds further light on a seemingly illegal aspect of Trump’s casino businesses. In 1990, Fred sent a man named Howard Snyder to Donald Trump’s Atlantic City casino with a $3.35 million check, which Snyder used to buy casino chips. He left the casino without even hitting the craps table. That money was, in effect, an untaxed gift from father to son. This led, at the time, to a $30,000 fine because the transaction violated New Jersey casino law, but the Times’s reporting revealed an additional tax evasion angle.

All this information, however, is at least 25 years old. Congress is after more recent information that could shed light on a range of other questions.

Congress wants Trump’s tax returns

Section 6103 of the Internal Revenue Code was written in 1924, and on a plain reading, the statutory language gives the chair of the House Ways and Means Committee (and the chair of the counterpart committee in the Senate) authority to obtain any person’s tax returns for any reason.

The specific statutory language does not limit this authority in any way, or give the Treasury secretary any discretion over whether to comply with the request.

Upon written request from the chairman of the Committee on Ways and Means of the House of Representatives, the chairman of the Committee on Finance of the Senate, or the chairman of the Joint Committee on Taxation, the Secretary shall furnish such committee with any return or return information specified in such request, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.

As George Yin, a former chief of staff to the Joint Committee on Taxation and current professor at the University of Virginia, explained in February congressional testimony, the historical context is that in the 1920s, the president “had unconditional access to tax returns” and consequently that “Congress wanted to give its committees the same right.”

Both the White House and the Treasury Department are, however, brazenly refusing to follow the law — even though we now know the IRS’s own lawyers agree that they should comply.

This is going to end up in court, and Trump will probably lose at some point. But if Democrats are able to get the president’s tax returns, there is debate over whether they can legally be made public.

Even if the Ways and Means Committee gets Trump’s tax returns the easy way, it could then vote to have some or all of the tax returns released to the rest of the House of Representatives, so all members would have access to it. But then it’s unclear if it’s legal to make that information public. They would have to go through a lengthy court battle even before they get to that step.

Ken Kies, the managing director of the lobbyist Federal Policy Group, testified before Congress in February that it would be a felony for a member of Congress or staff to publicly disclose tax returns, punishable for up to five years in prison. Others, however, disagreed. Yin argued that if the committee votes to release them to the full House, making the tax returns public would be allowed.

In other words, the drama may continue for quite a while. Only Trump knows what the actual stakes are, but it’s possible to get a sense of what the key issues may be based on what we do know.

The known unknowns of Trump’s finances

Given that Trump is currently serving as president of the United States, the most obvious thing his tax returns would tell us is who is paying him money.

Recently, for example, the mayor of Baltimore resigned after it turned out that she was selling bulk copies of her book, Healthy Holly, to entities that had contracts with the city of Baltimore. Trump’s sprawling and opaque empire of businesses creates many opportunities for wealthy individuals, business enterprises, and foreign governments with an interest in American public policy to deliver money to the president of the United States. We know broadly that many such businesses and governments have been booking events at Trump’s hotel in Washington, DC, in an effort to curry favor with him.

But we have no real idea what the full extent of Trump’s business dealings are or who they are with. Tax returns would not fully or satisfactorily answer these questions, but they would shed a good deal of light on them.

What’s more, in the tax returns that we have seen, there are several instances of what could be illegal tax evasion — tax evasion that won’t be fully investigated because the statute of limitations has passed. It’s certainly possible that at some point in the past 25 years, Trump cleaned up his act. The reality, however, is that IRS enforcement of rich people’s tax evasion has gotten substantially laxer in recent years, due to Republican budget cuts. A rational tax cheat, in other words, would be more aggressive in recent years than he was in the 1980s and early 1990s, and we know that Trump was very aggressive back then.

But beyond these two big known unknowns of tax evasion and bribery, there are a lot of unknown unknowns. The United Airlines pump-and-dump scheme isn’t necessarily something anyone would specifically think to look into — it just emerged from examining his returns. It’s clear that Trump was pretty bad at managing casinos, but across the long span of his career, he’s also proven himself to be extremely flexible, capable, and opportunistic in terms of coming up with moneymaking schemes.

But for all his celebrity over the years, we simply don’t know all that much about what those schemes were — or who any victims might be — and tax returns are one of the best ways to find out.