Treasury Secretary Steven Mnuchin, in a Wednesday letter to Rep. Richard Neal (D-MA), chair of the House Ways and Means Committee, said the Treasury Department wouldn’t meet House Democrats’ deadline to release the president’s tax returns. He said the request raises “serious issues concerning the constitutional scope of Congressional investigative authority, the legitimacy of the asserted legislative purpose, and the constitutional rights of American citizens.” Mnuchin said he’s talking to the Justice Department about the matter and will review Democrats’ request carefully.
Neal requested Trump’s tax returns from 2013 to 2018 from the IRS on April 3, invoking an obscure 1920s law that gives the chair of the Ways and Means Committee such authority. He set an April 10 deadline for them to be handed over. It was widely expected that the administration would not give up the returns easily, and there is likely a long battle ahead.
Secretary Mnuchin’s response to Chairman Neal’s letter requesting President Trump’s tax returns: pic.twitter.com/X2VsDYKpYh— Tony Sayegh (@TreasurySpox) April 10, 2019
In a statement shortly after Mnuchin’s letter was released on Wednesday, Neal said he would “consult with counsel and determine the appropriate response to the commissioner in the coming days.”
Prior to Mnuchin’s letter, Neal’s office thought the administration might not respond to the original request at all, a spokesperson told me earlier this week, because “they don’t want to have a paper trail of their own saying no.” Now the ball is in Neal’s court for what to do next — he may send another letter and eventually issue subpoenas or head to court.
Neal’s request and Mnuchin’s letter are the opening acts of what is likely to be a long battle over Trump’s tax returns. It’s not clear where this will go next, especially as Congress heads into a two-week recess next week, but the fight could very well end up in court.
According to CNN, Neal told reporters last week he “wanted to make sure that the case we constructed was one that stood up under the critical scrutiny of the courts.”
Democrats are using a 1920s law to make this request
Democrats are invoking Section 6103 of the Internal Revenue Code, a statute dating back to 1924, which authorizes the Ways and Means Committee to request from the Treasury Department the tax return information — personal or business — of any taxpayer. Treasury, theoretically, has to comply, and since it doesn’t look like it’s going to, that’s where the legal battle would likely come in.
University of Virginia law professor and former Joint Committee on Taxation chief of staff George Yin laid out the process in testimony before Congress in February. He explained that congressional authority to request tax return information was added in 1924 as a co-equal branch of government; before that, only the president had such authority to request and disclose tax returns:
Section 6103(f) does not place any conditions on the exercise of the authority to obtain tax return information by the Ways and Means Committee. Moreover, it provides no basis for the Treasury Secretary to refuse a request. I believe both features were intentional. Since the president at the time had unconditional access to tax returns, Congress wanted to give its committees the same right.
Congress made some changes to the law in 1976. But a handful of committees, including Ways and Means, can still lawfully request someone’s tax returns.
Democrats have been building their case for a while
Democrats will have a better shot at getting Trump’s tax returns if they can build a strong case for why they want them — showing that they’re pursuing them out of legislative and oversight duties, not as part of a partisan fishing expedition.
In a statement on his request, Neal laid out the Democrats’ argument. He said the Ways and Means Committee has the responsibility to conduct oversight of the federal tax system and “determine how Americans — including those elected to our highest office — are complying with those laws.” He also said the committee needs to make sure the IRS is doing its duty in properly enforcing tax laws. The IRS has a policy of auditing all presidents and vice presidents, and Democrats want to make sure that’s what they’re doing.
Rep. Bill Pascrell (D-NJ), who has been making the case for pursuing Trump’s tax returns under Section 6103 basically since Trump was inaugurated, said in an emailed statement to me earlier this year that he believes the evidence that the president “has abused our tax laws is plentiful.” He cited a New York Times investigation into Trump and his family’s tax practices that suggested the family for years engaged in a number of schemes to avoid taxes, and leaked pages from Trump’s 1995 and 2005 tax returns; the 1995 ones show a nearly $1 billion loss.
“Americans have a right to know if their president has paid his taxes, if he has followed the law, and if he is free from financial conflicts of interest,” Pascrell said. “The law is clear. Under 6103, the Ways and Means Committee chairman is entitled to request Trump’s tax returns — and the Treasury secretary is obligated to deliver them. That’s all there is to it.”
The White House has signaled it’s got no interest in complying
Before and after Democrats put in their formal request for the president’s tax returns, the signal from the Trump administration has been that it’s not interested in cooperating.
In testimony before the House of Representatives in March, Mnuchin suggested he would seek to keep Trump’s tax returns under wraps. “We will follow the law and we will protect the president as we would protect any individual taxpayer under their rights,” he said.
William Consovoy, Trump’s personal lawyer, sent a letter to Treasury Department general counsel Brent McIntosh on Friday arguing against releasing Trump’s tax returns. He said that the tax code “zealously guards taxpayer privacy” and that Neal’s request “flouts …fundamental constitutional constraints.”
He said the Ways and Means Committee has “no legitimate purpose” for requesting Trump’s tax returns, and even if it did, it doesn’t matter.
“Even if Ways and Means had a legitimate committee purpose for requesting the President’s tax returns and information, that purpose is not driving Chairman Neal’s request,” Consovoy wrote. “His request is a transparent effort by one political party to harass an official from the other party because they dislike his politics and his speech.”
Jay Sekulow, another personal attorney for Trump, also dismissed Democrats’ request in an appearance on ABC’s This Week on Sunday.
“This idea that you can use the IRS as a political weapon, which is what is happening here, is incorrect both as a matter of statutory law and constitutionally. We should not be in a situation where individual’s — individual private tax returns are used for political purposes,” he said. He also said that the president hasn’t asked for House Speaker Nancy Pelosi’s tax returns.
President Trump's attorney Jay Sekulow says "if necessary," the fight over Trump releasing his tax returns "will be litigated."— ABC News (@ABC) April 7, 2019
"We should not be in a situation where ... individual private tax returns are used for political purposes," he adds https://t.co/a2Vie2FVgM pic.twitter.com/3YMIrSTzij
As the New York Times notes, Trump’s lawyers’ thoughts on the issue don’t really make much difference one way or the other, but they’re indicative of the Trump team’s stance on the issue.
Democrats getting Trump’s tax returns doesn’t necessarily mean we’ll get to see them
Even if Democrats are able to get the president’s tax returns, there is debate over whether they can legally be made public.
If the Ways and Means Committee gets Trump’s tax returns, it could then vote to have some or all of the returns released to the rest of the House, so all members would have access to it. But then it’s unclear if it’s legal to make that information public.
Ken Kies, the managing director of the 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 by 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.
That debate — and the conclusion to it — is still a long way away, unless the Trump administration magically decides before Wednesday that it’s fine with releasing his tax returns after all. But it’s far likelier this fight is going to play out for quite some time.