He is weighing which will hurt him more: releasing or not releasing. It’s sort of how bad do you think they are? If the average answer is not as bad as they actually are, don’t release.
If I were him, I would say, “I release them to Obama’s IRS every year. They have no great problem with them. If they have no great problem, what more do you need to know?”
The tradition is just that, not a binding requirement.
His tax returns are probably aggressive. I wrote the book on that, literally: Aggressive Tax Avoidance for Real Estate Investors, now in its 19th edition. http://www.johntreed.com/.../aggressive-tax-avoidance-for...
It has been accurately said that when Congress passes tax laws they call them “incentives.” But when a taxpayer uses them, they call them “loopholes.”
For example, he may have used some loss carry-forwards that reduced his taxes. No doubt Hillary will scream that his effective rate is too low. But the whole idea of loss carry-forwards is that you are paying the right tax on average over the multi-year period in question. Most Americans are probably too ignorant to understand that. They will see the low rate for the one year and figure Trump cheated.
Probably uses a top tax law firm
Trump actually cheating is extremely unlikely, even before he declared for the presidency. He is under a microscope always for being a brash, self-publicizing billionaire. The IRS would love to put a guy like him on their trophy wall. He probably uses one of the most expensive, prestigious law firms in Manhattan to do his taxes. They have their own reputation to protect.
Business returns are very complex
Professional politicians like Hillary keep their taxes simple for public release. Businesspeople like Romney and Trump deliberately complicate their taxes to take advantage of every possible tax reduction. Romney caught hell over a Cayman Islands account set up by others in a group he was a member of.
There is nothing wrong with a Cayman Islands account, but Biden went on the campaign trail in 2012 saying who would have thought that America would ever have a guy with a Cayman Islands account running for President. That was innuendo with a capital I. He never said what was wrong with it, nor could he, but he did not have to. The idiot public nodded their heads and voted for Obama.
So the “tradition” of releasing tax returns is fine for politicians who tell their lawyers to make it look good to the ignorant public. But it is crazy for big businessmen like Romney and Trump whose tax returns are probably just fine, but the public is incapable of telling that and the demagogues will spin the return dishonestly, and successfully, for political advantage.
He will get the Obama IRS seal of approval sooner or later
Eventually, probably after some compromise that results in his paying some more tax than he did when he filed it, IRS will close their audit. My book says what you put on your tax return is your first offer in a possible future negotiation with the IRS. Trump probably believes exactly that.
When IRS closes their current audit, Trump can say, “My returns just got the Obama Administration’s stamp of approval” and Obama’s IRS will have to admit it’s true. Why would a bunch of people who could not pass the simplest quiz on business tax rules need to see them after that?