Clintons' Tax Returns

Hillary Clinton has resisted calls from Barack Obama to follow him in releasing personal tax returns, arguing that Senate and presidential disclosure rules already have required her to make public large amounts of personal financial information.

But the New York senator's tax returns likely would provide information not available in those filings. The returns probably would show at least some of the hundreds of thousands of dollars of income earned in recent years by Bill Clinton that isn't required to be reported on Mrs. Clinton's political disclosure forms. The 1040 form also would show how much taxes the Clintons pay annually and whether they are paying at the standard rate or have used various deductions and shelters to lower their Internal Revenue Service bill.

Howard Wolfson, a spokesman for Mrs. Clinton, said she has committed to releasing her tax information if she does become the Democratic Party's presidential nominee. Calling for release of the tax returns now "is an attempt to create an issue where there isn't one," he said. Mr. Wolfson also said the couple take "traditional" tax deductions but didn't elaborate.

While parties' nominees traditionally release their tax returns, Mr. Obama's disclosure during the primary season is unusual. Mr. Obama released his 2006 tax returns last April. They showed that he and his wife, Michelle, had income of $991,296 in 2006, down from $1.6 million the previous year.

Mrs. Clinton faced pressure to release her returns earlier this month, after announcing that she had lent her campaign $5 million. "I think the American people deserve to know where you get your income from," Sen. Obama told reporters at the time. "I've disclosed my income-tax returns...I think we set the bar in terms of transparency and disclosure."

The presumptive Republican nominee, Arizona Sen. John McCain, hasn't released his tax returns either. His campaign has said it won't decide whether to release the returns until after he is officially the nominee.

Mrs. Clinton's latest Senate disclosure form, filed last May, indicates that the Clintons' 2006 income was as much as $12 million. More than $10 million of that came from speeches the former president made to groups around the world, at up to $450,000 an appearance. In the first half of last year, Mr. Clinton earned an additional $5.8 million from speeches, according to Mrs. Clinton's presidential disclosure form filed in June.

However, neither of those forms fully reports Mr. Clinton's income. For certain types of spousal compensation -- such as consulting arrangements -- the forms reveal only the source of funds, and the fact that the payment exceeds $1,000. They don't say how much over $1,000.

Mrs. Clinton's forms make such a notation for infoUSA Inc., an Omaha, Neb., provider of marketing information that is headed by Vinod Gupta, a friend and political supporter of the Clintons.

A filing made as part of a shareholder lawsuit in Delaware state court against Mr. Gupta and others contends that, under a consulting agreement, infoUSA paid Mr. Clinton $2.1 million from July 2003 to April 2005 and agreed to pay him an additional $1.2 million through 2008. The suit contends that corporate assets were misused in various ways.

A person familiar with the matter said these numbers are essentially accurate. Mr. Gupta has denied wrongdoing and said the court has found the payments to Mr. Clinton to be legal. A spokesman for Mr. Clinton didn't respond to a question concerning the magnitude of payments from infoUSA.

Mrs. Clinton's disclosure forms also list her husband's partnership interests in an investment fund operated by Mr. Clinton's longtime friend and political supporter, Los Angeles billionaire Ronald Burkle. As reported, Mr. Clinton has been a senior adviser to Mr. Burkle's closely held Yucaipa Cos. and a partner or profit participant in certain Yucaipa investment funds.

Mrs. Clinton's presidential disclosure form shows that her husband had received as much as $17,500 in interest income from Yucaipa holdings since the beginning of 2006. It also said Mr. Clinton received a "guaranteed" partnership payment of "over $1,000." The Clintons' tax returns likely would give a clearer idea of the precise magnitude of that partnership payment and possibly other details about his partnership arrangement with Yucaipa.

The Clintons' tax returns also could provide information about some of the couple's expenses, said Paul Offenbacher, a Silver Spring, Md., accountant. One possible example: What expenses, if any, Mr. Clinton writes off against his annual income from speeches. When Mr. Clinton travels around the country or the world, he often travels on the private jets of friends or supporters. It isn't fully known whether or how Mr. Clinton reimburses such people for those trips.

The Clintons' tax returns also might give a fuller picture of the magnitude of the couple's charitable giving. Aside from Mr. Clinton's postpresidential foundation, called the William J. Clinton Foundation, the couple have a smaller charitable entity, called the Clinton Family Foundation. Like all charitable entities, the returns for those are public.

The forms for the latter foundation show that in 2006, the Clintons contributed nearly $1.6 million to the foundation. In that same year, the family foundation made nearly $1.3 million in donations to a range of philanthropic, religious and educational entities. Mr. Wolfson, the Clinton spokesman, said "the vast amount" of the couple's charitable donations go through the family foundation.

Candidates -- even presidents -- are under no legal obligation to release their tax returns. Since the 1990s it has been standard practice for party nominees to do so, said Joseph Thorndike, a tax historian for Tax Analysts, a Falls Church, Va., nonprofit provider of tax information.

Mr. Thorndike called Mr. Obama's release of his returns before the primaries "pretty unusual."

Mr. Thorndike said tax returns can point to politicians' inconsistencies. Franklin Roosevelt, whose returns were released after his death, took significant loss deductions on his Hyde Park, N.Y., estate, said Mr. Thorndike.

"That was the kind of tax-avoidance technique he railed against," said Mr. Thorndike.

"The easiest route for a candidate to avoid persistent questions about their finances is to just lay it out there," said Massie Ritsch, communications director for the Center for Responsive Politics, a Washington, D.C., nonprofit research group that tracks money in politics. "By withholding things, people wonder what you're trying to keep from them."

Write to John R. Emshwiller at john.emshwiller@wsj.com and James Bandler at james.bandler@wsj.com

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