House Subpoenas Treasury, IRS to Obtain Trump's Tax Returns
(Bloomberg) -- House Democrats issued two subpoenas to compel Treasury Secretary Steven Mnuchin and IRS Commissioner Chuck Rettig to release President Donald Trump’s tax returns, House Ways and Means Chairman Richard Neal said.
The move is Neal’s latest attempt to obtain six years of the president’s personal and business tax information after Mnuchin rejected his initial request on May 6. Neal and the chairmen of the two other tax-writing committees have the statutory authority to ask the Treasury for the return of any taxpayer, including the president’s. Neal gave Mnuchin and Rettig until May 17 to turn over the documents.
“While I do not take this step lightly, I believe this action gives us the best opportunity to succeed and obtain the requested material,” Neal said in a statement. “I sincerely hope that the Treasury Department will furnish the requested material in the next week so the committee can quickly begin its work.”
Mnuchin said Neal’s initial request lacked a legitimate legislative purpose. He didn’t immediately respond to a request to comment about the subpoena.
The subpoenas set up what could be one of the biggest legal showdowns between the Trump administration and a Congress intent on investigating the president. Trump broke with 40 years of presidential campaign tradition in refusing to release his tax returns. That has led some Democrats to speculate that he has ties to foreign businesses or cheated on his taxes.
The IRS and Treasury both confirmed they received the subpoenas.
Neal’s stated reason for requesting Trump’s tax returns is that he wants to ensure the IRS is properly auditing the president and vice president each year. Mnuchin said handing over the documents would be a violation of Trump’s privacy and that he can’t ”lawfully fulfill” the request.
White House Chief of Staff Mick Mulvaney said in an interview for “The Takeout” podcast this week that Congress will never get to see Trump’s tax returns because “they’re not entitled to see that by law.”
Democrats, citing a section of the tax code from 1924, say the law is on their side. The law allows the chairmen of the House Ways and Means and Senate Finance committees and the Joint Committee on Taxation to request the tax returns of any taxpayer and that the Treasury secretary “shall” provide them.
The law doesn’t say that Neal needs a legislative purpose to ask for the documents.
If Mnuchin doesn’t release the documents, as he has indicated he won’t, that sets up Neal to sue to enforce the subpoena. Neal had contemplated suing under the 1924 law, but that section of the tax code isn’t clear how it could be enforced, Daniel Hemel, a law professor at the University of Chicago, said.
“By issuing a subpoena, Neal increases his odds of getting the tax returns,” he said.
Representative Kevin Brady, the top Republican on the Ways and Means Committee, has staunchly opposed Neal’s efforts to obtain the tax returns. Brady, in a letter to Neal on Friday, said that Democrats are seeking the returns “not to further a valid legislative purpose, but instead to try to embarrass a political enemy.”
The interpretation of Neal’s authority in the law “should turn on its clear language and Congress’ intent when it was created,” George Yin, a former chief of staff at the Joint Committee on Taxation, said in a recent article. “In this case, as it happens, both the letter and the intent of the law lead to the same conclusion: Congress is entitled to the president’s tax information, no questions asked.”
The White House and Congress are battling over several other attempts to scrutinize Trump.
Acting in his capacity as a private citizen, Trump and his umbrella Trump Organization, sued to block the House Committee on Oversight and Reform to prevent it from obtaining tax records from his longtime accounting firm, Mazars USA LLP. A similar suit, seeking to prevent the release to the house of bank records from Deutsche Bank AG and Capital One Financial Corp. is pending in a Manhattan federal court.
The administration told former White House Counsel Don McGahn to ignore a House Judiciary Committee subpoena demanding documents related to Special Counsel Robert Mueller’s investigation.
Trump also exerted executive privilege over Mueller’s report about Russian interference in the 2016 election and underlying evidence as House Democrats were preparing to vote to hold Attorney General William Barr in contempt of Congress for failing to release the full document.
Barr may not be alone to be held in contempt. House Speaker Nancy Pelosi said Thursday that the chamber could pursue contempt charges at the same time for several other Trump administration officials who have refused House requests for information. She didn’t say who she was referring to.
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