Steven Mnuchin, U.S. Treasury secretary, speaks during a Senate Appropriations Financial Services Subcommittee hearing in Washington D.C., U.S. (Photographer: Stefani Reynolds/Bloomberg)

Mnuchin Rejects House Panel's Subpoena for Trump's Tax Records

(Bloomberg) -- Treasury Secretary Steven Mnuchin rejected House Ways and Means Chairman Richard Neal’s subpoena for six years of President Donald Trump’s personal and business tax returns. Now, Neal will likely turn to the courts, embarking on a lengthy battle that could help define Congress’ powers to oversee the executive branch.

In a letter denying Neal’s subpoena, Mnuchin on Friday doubled down on earlier assertions that Neal did not have a legislative purpose for obtaining the returns. In response to Neal’s earlier requests, Mnuchin has said Democrats merely want to expose Trump’s private information for political purposes.

“For the same reasons, we are unable to provide the requested information in response to the committee’s subpoena,” Mnuchin wrote, adding that the Justice Department intends publish a legal opinion memorializing its advice to him to reject the requests.

Neal has fought for six weeks to obtain Trump’s returns, stating that he needs them to determine whether the Internal Revenue Service is following its policy of annually auditing the president. He first requested the returns at the beginning of April, invoking a section of the tax code that allows the heads of Congress’ tax-writing committees to obtain the returns of any taxpayer.

Neal, in a statement on Friday after the denial, said, “The law, by its terms, does not allow for discretion as to whether to comply with a request for tax returns and return information.” But even though Mnuchin’s refusal was widely expected, Neal, a Massachusetts Democrat, said he would consult with counsel on next steps.

But fellow Ways and Means Democrat Lloyd Doggett of Texas said Congress “shrinks its own power if it does not deploy its most credible remedy -- inherent contempt.”

Mnuchin told a Senate panel this week that Treasury officials would be willing to help Ways and Means committee members examine the audit process without seeing the president’s returns.

But Democrats have also been eager to see Trump’s tax documents ever since he broke with 40 years of presidential campaign precedent by refusing to release them in 2016. They want to see if he has been truthful about the extent of his wealth, his business ties and whether he cheated on his taxes.

Mnuchin formally rejected the request about a month after Neal first asked. Neal responded with the subpoena last week, setting Friday as the deadline for Mnuchin to respond.

Friday’s rejection likely sets up a court battle between the legislative and executive branches that could extend beyond the 2020 election. An attempt to enforce a subpoena related to a botched Justice Department investigation during President Barack Obama’s administration extended well into the Trump administration.

Congress could vote to hold Mnuchin in contempt of Congress and sue in court to enforce the subpoena or the earlier request under the tax code. That would make him the second Trump Cabinet official to be held in contempt of Congress, following Attorney General William Barr.

Neal on Friday indicated that he might go straight to court rather than hold Mnuchin in contempt of Congress.

“I don’t see what good it would do at this particular time,” Neal told CNN Friday. “I think that if both sides have made up their minds, better to move it over to the next branch of government: the judiciary.”

Trump has claimed that he is under audit and won’t release the returns while that process is ongoing, though no law prevents him from doing so.

Neal’s tax return fight is just one in a panoply of investigations waged by House Democrats since they took over the chamber this year. The Trump administration also has rejected or ignored subpoenas from the House Intelligence and Judiciary committees, claiming that the inquiries amount to “presidential harassment.”

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