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Analysis: Here’s how the battle for Trump’s tax returns could play out


APRIL 6, 2019

FILE Rep. Richard Neal, Chairman of the House Ways and Means Committee, arrives for a hearing with Steven Mnuchin, in Washington, March 14, 2019. – Bloomberg via Getty Images

WASHINGTON, D.C. – President Donald Trump’s lawyer said on Friday that the Internal Revenue Service should reject a request from the Democratic chair of the House tax-writing committee to produce the president’s tax returns.

“If the IRS acquiesces to Chairman Neal’s request, it would set a dangerous precedent,” William Consovoy said in a letter to Treasury Department General Counsel Brent McIntosh. “Once this Pandora’s box is opened, the ensuing tit-for-tat will do lasting damage to our nation.”

The president said he believes “the law is 100 percent on my side.”

But is it?

Steve Rosenthal, a senior fellow in the nonpartisan Urban-Brookings Tax Policy Center and a tax lawyer with 25 years’ experience, said the law is stacked against the president and in favor of House Ways and Means Committee Chairman Rep. Richard Neal, D-Mass.

According to Section 6103(f) of the federal tax code, an obscure, nearly hundred-year-old provision Neal cited in making his request, the Treasury Secretary “shall furnish such committee with any return or return information specified in such request.”

Rosenthal said the law couldn’t be clearer.

“As a lawyer, this is a pretty easy question to litigate,” he said. “Chairman Neal has the authority to obtain this information through this provision, which is unambiguous in its use of the word ‘shall.'”

The key question, Rosenthal added, is whether Treasury Secretary Steven Mnuchin has any legal basis to refuse Neal’s request.

“I think the administration’s strategy,” Rosenthal continued, “is to run out the clock and try to get past the election, but the question is, is there any legitimate legal basis to resist? And how long will the legal process take?”

“For Mnuchin to say just ‘No,’ I’m sure he’d say he’s there to protect the privacy of every American, but that’s B.S.,” said Rosenthal. “Congress is there to have oversight of the executive branch, and President Trump is the most important player in the executive branch.”

The very purpose of the tax code provision Neal wants to exercise was written with the express intention of executive branch oversight, in the wake of the 1920s Teapot Dome scandal, Rosenthal said. “If you look to the legislative context for why this statute exists, and then why Neal is asking, there is not any credible argument to refute the request.”

But while the provision has been on the law books for nearly a hundred years, Neal’s request is in uncharted territory. There is no precedent by which the Ways and Means Committee has ever sought to use the provision to request a president’s tax returns, even though Rosenthal believes Neal’s request is a legitimate.

Treasury Secretary Steven Mnuchin prepares to testify on the president’s budget proposal before the House Ways and Means Committee on March 14, 2019. – Jim Watson/AFP/Getty Images

Trump has also broken with modern practice by not voluntarily turning over his tax returns as a candidate. Since the 2016 campaign, Trump has consistently cited an ongoing audit as the reason for not making his returns public.

The president’s lawyer detailed in his letter to the IRS his rationale for invalidating Neal’s request, including that such requests “must have a legitimate legislative purpose” and “must be related to, and in the furtherance of, a legitimate task of Congress.”

But Rosenthal countered that Congressional oversight of the executive branch qualifies, in his mind, as a legitimate legislative justification in this case.

“Oversight of the IRS is the most core function of the Ways and Means Committee,” Rosenthal said. “The purpose is overseeing the IRS and making sure the IRS is enforcing the rules fairly, to include the president. Is the president above the law, or is he being audited fairly, as any other American would be?”

Neal, in his letter requesting the president’s returns, laid out his case for legislative authority by stating that the committee is “considering legislative proposals and conducting oversight related to our Federal tax laws, including, but not limited to, the extent to which the IRS audits and enforces the Federal tax laws against a President.”

But the president’s lawyer, in his letter to the IRS, makes the case that Neal has an ulterior motive.

“His request is a transparent effort by one political party to harass an official from the other party because they dislike his politics and speech,” Consovoy wrote.

President Donald Trump speaks to the press before boarding Marine One as he departs from the South Lawn of the White House on March 22, 2019. – Mandel Ngan/AFP/Getty Images

The president made a similar argument Friday in remarks to reporters.

“I got elected. They elected me, and now they keep going. I’m under audit. When you’re on audit, you don’t do it. Other people are under audit, nobody would do it when you are going through audit, and I’m always under audit. They audit me all the time,” Trump said after his lawyer issued the statement.

Legal arguments aside, the table is now set for the expected scenario that the Treasury Department will decline to comply with Neal’s request, after which Neal would have to issue a subpoena to compel the Treasury Department to hand over the returns.

If Treasury again declines, a legal battle would almost certainly ensue, likely escalating to the Supreme Court.

An additional course of action for Neal, Rosenthal said, would be for the House to potentially vote to hold Mnuchin, who oversees the IRS as Treasury Secretary, in contempt of Congress.

If Neal does succeed in ultimately obtaining the president’s tax returns, it’s conceivable that the returns could eventually be made public.

While Neal would be initially obligated to keep the returns private, the Ways and Means Committee could take a vote to share the information in an open session. If that voted succeeded, which is likely along party lines, the returns could be made public.

The White House declined to comment on this report. The Treasury Department did not respond to a request for comment.