WASHINGTON – Treasury Secretary Steven Mnuchin said his department will not meet the Wednesday deadline set by congressional Democrats to turn over copies of President’s Donald Trump tax returns, escalating a clash between the White House and Congress.
Mnuchin said he was consulting with the Justice Department as to the constitutional questions raised by the Democrats request and appeared deeply skeptical of the lawmakers intentions. He did not flatly reject the notion that he might ultimately comply, but his letter to the House Ways and Means Committee suggested that Mnuchin would not hold himself to any timeline.
Mnuchin wrote, “The Committee’s 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’s letter appeared to closely track the legal issues raised by Trump’s lawyers last week in a letter in response to the request made by Ways and Committee Chairman Richard Neal, D-Mass. Even though Neal addressed his letter to Internal Revenue Service Commissioner Charles Rettig, Mnuchin said he would personally oversee the review. The IRS is part of the Treasury Department.
House Democrats had requested the president’s tax records from 2013 to 2018, as well as information related to a trust that controls more than 100 businesses in Trump’s empire.
Mnuchin’s decision to not reject the Democratic request outright could buy the Treasury Department more time, since courts might not want to get involved until such a decision is made.
The request cited a 1924 federal law that states the Internal Revenue Service “shall furnish” the records at the request of lawmakers tasked with tax oversight.
“We have completed the necessary groundwork for a request of this magnitude, and I am certain we are within our legitimate legislative, legal and oversight rights,” Neal said last week.
But, Mnuchin said Wednesday, “[t]he legal implications of this request could affect protections for all Americans against politically-motivated disclosures of personal tax information, regardless of which party is in power.”
Trump declined to release his records while running for president in 2016, breaking with decades of precedent.
The tax returns would give the public a new look into the president’s sprawling business empire and alleged conflicts of interest, information that could come out during Trump’s 2020 reelection campaign.
House Democrats are expected to soon send an second letter to the Treasury Department again requesting the returns, according to a congressional aide who spoke on the condition of anonymity because he was not authorized to speak publicly.
The committee could also send subpoenas to Mnuchin and Rettig, demanding the returns be divulged. If the administration continues to deny the request, House Democrats could also file a lawsuit in federal court to try to enforce it, said Daniel Hemel, a professor at the University of Chicago Law School.
It’s not clear how long the subsequent court fights would take.
Democrats may also choose to request the documents from New York state, given that federal taxes are often included as attachments in state tax returns. New York’s legislature is currently considering legislation that would allow Congress to request the president’s tax returns from the state’s Department of Taxation and Finance.
“I think it’s likely to go to the D.C. circuit, but does the Supreme Court want to get into this? That’s really hard to predict,” Hemel said. “I’d be surprised if [Chief Justice] John G. Roberts Jr. wants to resolve this dispute, but it is an important inter-branch dispute.”
Neal said in a statement Wednesday that he would discuss with legal counsel the best way to respond to Mnuchin’s denial of Democrats’ request.
Rep. Kevin Brady of Texas, the ranking Republican on the Ways and Means Committee, said the Treasury Department was “right to carefully review the privacy impact” of Democrats’ request, saying it set a “dangerous precedent.”
But Rep. Lloyd Doggett, D-Texas, who also sits on the committee, mocked Mnuchin’s letter as “doubletalk” that shows Trump is “engaging in obstruction.”
“How many lawyers and how much time does it take for Secretary Mnuchin to understand that ‘shall’ means ‘shall’? ” Doggett said in a statement.
Trump says he cannot release the tax returns because he is under audit, and the administration has put up a united front aimed at blocking the documents from being released.
Both Rettig and Mnuchin are Trump appointees.
In a 2016 column in Forbes, Rettig, then a private attorney, said no “experienced tax lawyer” would advise Trump to publicly release his tax returns during an audit.
Mnuchin revealed in testimony earlier this week that Treasury lawyers had consulted with White House attorneys about the possible release of the returns. Mnuchin described the discussions between the White House and Treasury officials as purely “informational,” though he wouldn’t provide more details. White House officials similarly would not offer more information about the discussions.
Democrats cried foul, saying any White House involvement in Treasury’s decision-making raised the risk of improper political involvement. The reason federal law says the treasury secretary “shall furnish” tax returns requested by Congress is because they are designed the system to block any involvement from the White House.
Attorneys for the president have argued Neal’s request risks using the IRS for partisan political aims, arguing House Democrats are engaged in a “gross abuse of power” that infringes on taxpayer privacy. These arguments have been echoed in House hearings by congressional Republicans.
White House acting chief of staff Mick Mulvaney has said that Democrats would never obtain Trump’s tax returns.
“The requests for [Trump’s] private tax information are not consistent with governing law, do not advance any proper legislative purpose, and threaten to interfere with the ordinary conduct of audits,” said William Consovoy, Trump’s attorney, in a statement. “We are confident that this misguided attempt to politicize the administration of the tax laws will not succeed.”
Last week, Consovoy sent a letter to the Treasury Department urging it to not release Trump’s tax returns until it had received a formal legal opinion on the matter from the Justice Department.
Presidential candidates since the Nixon administration have released their tax returns, but Trump has refused to do so. Trump has promised to release the returns after a conclusion of an audit, although independent legal experts have said that an audit would not bar him from releasing them.
Democrats may be forced to prove in court that their request is part of Congress’ oversight or legislative responsibilities, according to tax experts.
In 2016, the New York Times published Trump’s 1995 income tax records, showing he claimed a large loss that could minimize his tax burden.
Mark Everson, who served as the IRS commissioner under President George W. Bush, said there is little dispute that Congress has the authority to receive Trump’s tax returns. He also said he was alarmed by Mulvaney’s comments denying Democrats would ever get the returns.
“I understand the stakes are significant, because it involves a president. But I am disturbed that the White House, through the chief of staff, would appear to be calling the shots on a matter that is fully within the purview of the Treasury Department,” Everson said. “I think the law is clear on this matter.”