Democrats seize on IRS memo in Trump tax battle

Democrats on Wednesday seized on a newly surfaced IRS draft memo about congressional access to tax returns, saying the document makes it clear that they are in the right in their fight with the administration over President TrumpDonald John TrumpSenate gears up for battle over witnesses in impeachment trial Vulnerable Democrats tout legislative wins, not impeachment Trump appears to set personal record for tweets in a day MORE’s tax filings.

The draft memo, prepared last fall and first reported by The Washington Post on Tuesday, stated that the agency has to provide requested tax returns to Congress unless executive privilege is invoked.

While the unsigned document did not directly mention Trump, Democrats see it as backing up their position that the IRS is required by law to comply with their demands for the president’s returns.

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“It seemed to confirm the position that we’ve had, and that is that the law is unambiguous,” House Ways and Means Committee Chairman Richard NealRichard Edmund NealExpiring tax breaks set off year-end scramble Ways and Means Committee announces rival surprise medical billing fix House panel votes to temporarily repeal SALT deduction cap MORE (D-Mass.) told reporters on Wednesday.

Neal has already issued letters and subpoenas seeking six years of Trump’s personal and business tax returns, from 2013 to 2018, all of which Treasury Secretary Steven MnuchinSteven Terner MnuchinUS, China reach limited trade deal ahead of tariff deadline Lawmakers strike spending deal to avert shutdown McConnell accuses Democrats of stonewalling funding talks with wall demands  MORE has rejected. Mnuchin has said Treasury determined that Neal’s requests lack a legitimate legislative purpose, after discussing the matter with the Department of Justice.

House Democrats are expected to file a lawsuit over Trump’s returns, and Neal said the memo doesn’t change his strategy.

“We’ve got a strategy for the last four months and we intend to stick to it,” he said.

Some Democrats said the memo could be helpful for them as they pursue a court case. It’s one of the latest developments that could bode well for Democrats as they seek Trump’s tax returns, along with two rulings this week by separate judges that sided with Democrats in their efforts to obtain other financial information from Trump.

“I think that you’re going to see a series of court decisions, rulings, memos, letters, that all confirm that the Constitution requires that we have a duty of oversight of the executive branch,” said Rep. Tom Suozzi (D-N.Y.), a Ways and Means Committee member.

Another new development that could help Democrats in the tax fight is that the New York state legislature on Wednesday sent Gov. Andrew Cuomo (D) legislation that would allow Congress to request the president’s state tax returns. Neal, however, may opt against requesting the state returns.

The IRS memo, which the agency told the Post was written by a lawyer in the chief counsel’s office, said the language in the tax-code provision Neal cited in requesting Trump’s federal returns is “mandatory.” That provision states that the Treasury secretary “shall furnish” tax returns requested by the chairmen of Congress’s tax committees, provided that the documents are viewed in a closed-door session.

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Additionally, the memo said the Treasury secretary doesn’t have discretion and that Congress’s tax committees do not have to provide a reason for their request.

At a House Financial Services Committee hearing Wednesday, Mnuchin dismissed the idea that the memo contradicts his conclusions on Trump’s returns.

“That memo, I understand, is addressing a different issue and is not addressing the issue that we and the Department of Justice looked at,” he said.

Later in the hearing, Mnuchin said that the Treasury Department would look at the document but that there is “no smoking gun here.”

“We did a very thorough legal analysis with the Department of Justice,” he said.

Mnuchin also said he wasn’t aware of the document until the Post asked about it, and that to the best of his knowledge no one in Treasury’s senior leadership had seen it before then. He said Treasury is trying to figure out who authored the draft memo.

The IRS also said that Commissioner Charles Rettig and chief counsel Michael Desmond were unaware of the draft document until contacted by the Post.

Some Democrats are skeptical.

“It’s hard to believe that Secretary Mnuchin, Commissioner Rettig and other political appointees did not know about the existence of this memo,” Senate Finance Committee ranking member Ron WydenRonald (Ron) Lee WydenSenators zero in on shadowy court at center of IG report Trump administration approves Medicaid work requirements in South Carolina Senate Republicans air complaints to Trump administration on trade deal MORE (D-Ore.) said in a statement.

He added that “Congress needs answers as to who knew about this memo and when, and why Secretary Mnuchin ultimately did an end run around the IRS to get the answer President Trump wanted.”

Rep. Lloyd DoggettLloyd Alton DoggettHouse passes sweeping Pelosi bill to lower drug prices Progressive leader warns members could vote no on drug price bill as it stands White House talking new tax cuts with GOP MORE (D-Texas), a member of the Ways and Means Committee, reiterated his call for Congress to consider using its inherent contempt powers against Mnuchin, which could involve fines and confinement.

“It’s long past time for Congress to stop letting the Trump Administration run out the clock on any accountability for its continued abuse of power,” he said in a statement.

The memo became public amid growing calls among House Democrats to begin an impeachment inquiry against Trump, which Speaker Nancy PelosiNancy PelosiVulnerable Democrats tout legislative wins, not impeachment Photographer leaves Judiciary hearing after being accused of taking photos of member notes Overnight Health Care — Presented by That's Medicaid — House passes sweeping Pelosi bill to lower drug prices | Senate confirms Trump FDA pick | Trump officials approve Medicaid work requirements in South Carolina MORE (D-Calif.) appears to have tamped down for now.

Rep. Mark PocanMark William PocanHouse passes sweeping Pelosi bill to lower drug prices Overnight Health Care — Presented by That's Medicaid — House panel unveils rival fix for surprise medical bills | Democrats punt vote on youth vaping bill | Pelosi drug bill poised for passage after deal with progressives Pelosi reaches deal with progressives to avert showdown over drug price bill MORE (D-Wis.), a co-chairman of the Congressional Progressive Caucus who has called for an impeachment inquiry, said the draft memo and Mnuchin’s assertions that he hadn’t reviewed it is “one more reason why when the president obstructs or tries to cover up things that we’re trying to get, we’re going to push back. And I think you’re going to find more and more members pushing back.”

Key Republicans maintained their support for Mnuchin in the tax return fight.

Rep. Kevin BradyKevin Patrick BradyExpiring tax breaks set off year-end scramble Overnight Health Care — Presented by That's Medicaid — House panel unveils rival fix for surprise medical bills | Democrats punt vote on youth vaping bill | Pelosi drug bill poised for passage after deal with progressives Ways and Means Committee announces rival surprise medical billing fix MORE (Texas), the ranking member on the Ways and Means Committee, said he thinks the draft IRS memo is “meaningless” and misses the constitutional issues Mnuchin took into account.

Brady said he’s not sure the memo even has the value of “a discarded soup can on the side of the road that’s suddenly been put in the Smithsonian.”