Were billionaire's gifts to Thomas taxable? Sen. Wyden wants to know

Sen. Ron Wyden, who chairs the Senate Finance Committee, is wielding his gavel like a powerful senator should. The Oregon Democrat penned a letter demanding that Texas billionaire Harlan Crow provide a detailed accounting of the gifts and travel Crow has provided to Supreme Court Justice Clarence Thomas, as well as details of the real estate purchases Crow made from Thomas. The letter could serve as an opening salvo into an investigation of the transactions via tax records, because federal taxes are something Wyden’s committee has jurisdiction over. The “unprecedented arrangement between a wealthy benefactor and a Supreme Court justice raises serious concerns related to federal tax and ethics laws,” Wyden wrote. “The secrecy surrounding your dealings with Justice Thomas is simply unacceptable.”

Wyden notes in the letter that Thomas didn’t disclose the gifts because he was advised they were “not reportable,” potentially violating federal disclosure laws. While there might be questions about whether all those trips and dinners and gifts fall under the “personal hospitality” exceptions in the rules, Wyden wrote, ”the Internal Revenue Code provides no such exceptions for transfers of a gratuitous or personal nature.”

“The cost of the use of your private jet and fully crewed superyacht by Justice Thomas would likely be well in excess of the annual gift tax exclusion (between $13,000 per recipient in 2011 and $17,000 per recipient in 2023, depending on the year), thus giving rise to a gift tax return filing requirement,” Wyden added. This isn’t an idle assertion: Wyden can find out if Crow didn’t report these gifts. There’s congressional authority to subpoena tax records to back him up. The Supreme Court said so, back when it ruled that the IRS had to comply with a congressional subpoena and provide tax records—even for presidents.

Oh, and about that real estate deal where Crow bought Thomas’ mother’s home and has allowed her to live in it rent-free for the past nine years? There are likely “gift tax filing obligations and gift tax liability” for that, too. “[T]he IRS has made clear that allowing for the use of property without receiving full consideration can be a taxable gift,” Wyden wrote.