The Treasury on Monday declined a demand from House Ways and Means Committee Chairman Richard Neal, D-Mass., to review President Trump’s tax returns, likely setting up a high-profile court battle over Congress’ power to obtain the president’s financial records.
Treasury Secretary Steven Mnuchin had set Monday as the department’s own deadline to decide whether to cooperate with the request, which was made under a nearly 100-year-old law that grants chairmen of congressional tax-writing committees the ability to confidentially review tax returns.
In a brief letter to Neal, Mnuchin reiterated the argument he and Trump’s personal attorneys have made that the request lacks a legitimate legislative purpose and is therefore unconstitutional.
Mnuchin says he arrived at the conclusion after consulting with the Justice Department. He added that department will provide a written opinion on the matter “as soon as practicable.”
In his initial request for the information, Neal asserts several legislative purposes. Those include oversight of how the IRS reviews presidential tax payments and whether the tax collection agency audits businesses owned and controlled by a sitting president. According to IRS guidance, presidents and vice presidents are automatically placed under audit, following a major tax underpayment by former President Richard Nixon.
Despite his opposition to the congressional request for Trump’s tax information, Mnuchin offered to “provide information concerning the Committee’s stated interest in how the IRS conducts mandatory examinations of Presidents, as provided by the Internal Revenue Manual.”
The stalemate sets the stage for a major court fight over Congress’ power to obtain information.
In a brief statement, Neal said: “Today, Secretary Mnuchin notified me that the IRS will not provide the documents I requested under Section 6103 of the Internal Revenue Code. I will consult with counsel and determine the appropriate response.”
The law Neal cites was passed in 1924 in reaction to a bribery scandal involving President Warren Harding’s Cabinet, known as the Teapot Dome Scandal. Trump’s returns and financial information have been the source of scrutiny since Trump became the first major presidential candidate in decades to refuse to release his tax returns to the public and the first president in decades to decline to divest himself from his business interests while in office.
The House of Representatives may now sue Mnuchin for failure to comply with the law or subpoena the returns. It is unclear how quickly a court battle over either would play out. Acting White House chief of staff Mick Mulvaney has said the administration will fight the request to the Supreme Court.
Treasury’s refusal to grant the tax returns request is the latest in a series of showdowns between House Democrats and Trump over the president’s finances. Trump has sued to prevent his banks and accountants from disclosing his financial information to congressional investigators.
In a tweet reacting to the Treasury’s letter, senior Ways and Means Committee member Rep. Bill Pascrell, D-N.J., called the Treasury’s actions “unprecedented.”
“What’s unprecedented is refusing to comply with our lawful request,” tweeted the New Jersey Democrat. “What’s unprecedented is a [Department of Justice] being bodyguard to the executive. What’s unprecedented is an entire [government] shielding a corrupt [President] from accountability.”
In another tweet, Rep. Earl Blumenauer, D-Ore., another senior member of the committee, said simply: “See you in court.”
