Mnuchin formally rejects Dem request for Trump's tax returns

Treasury Secretary Steven Mnuchin on Monday formally rejected Democrats’ request for President Trump’s tax returns, setting up a likely court battle.

“I am informing you now that the Department may not lawfully fulfill the Committee’s request,” Mnuchin said in a one-page letter to House Ways and Means Committee Chairman Richard Neal (D-Mass.), adding that the request “lacks a legitimate legislative purpose.”

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Mnuchin said he made the decision while relying on the advice of the Department of Justice (DOJ). He said DOJ plans to publish its legal opinion as soon as possible.

The Treasury secretary said Neal's request "is unprecedented, and it presents serious constitutional questions, the resolution of which may have lasting consequences for all taxpayers."

Mnuchin's response, while widely expected, is likely to move the fight to the courts, as Democrats are expected to continue their push for the returns.

Neal said in a statement that he "will consult with counsel and determine the appropriate response.”

Some lawmakers and experts have said they expect Neal to issue a subpoena for the documents. Democrats may also vote to hold Trump administration officials in contempt.

Democrats are expected to eventually sue the administration and ask a judge to enforce a subpoena and possibly a portion of the tax code that allows for certain lawmakers to request and receive tax returns.

"We need immediate legal action," Rep. Lloyd DoggettLloyd Alton DoggettProgressive leader warns members could vote no on drug price bill as it stands White House talking new tax cuts with GOP On The Money: Lawmakers hammer Zuckerberg over Facebook controversies | GOP chair expects another funding stopgap | Senate rejects Dem measure on SALT deduction cap workarounds MORE (D-Texas), a member of the Ways and Means Committee, said in a statement after Mnuchin sent his letter. "We cannot allow this bad president to set bad precedent. If Trump once again faces only Republican silence and Democratic timidity, he will continue to erode our democracy by assuming more and more power.”

Senate Finance Committee Chairman Chuck GrassleyCharles (Chuck) Ernest GrassleyLighthizer starts GOP charm offensive on Trump trade deal Bottom line Graham: FBI investigation in 2016 turned into a 'criminal conspiracy' MORE (R-Iowa) accused Democrats of seeking to use the IRS as a weapon. He wrote in a tweet that there was a big difference between "legitimate" congressional oversight and what Democrats were doing.

 

Neal first made the request for six years of Trump’s personal and business tax returns on April 3. He made the request under a portion of the federal tax code that states the Treasury secretary “shall furnish” tax returns requested by the chairmen of Congress’s tax committees.

Mnuchin missed Neal’s initial deadline of April 10, saying Treasury needed more time and was reviewing the request with the Justice Department. Neal then set a second deadline of April 23, which Mnuchin also missed, saying he expected Treasury to make a final decision by May 6.

Democrats are certain to object to Mnuchin's argument that their request lacks a legitimate legislative purpose. When Neal asked for the documents, he said the Ways and Means Committee is interested in oversight and legislative proposals related to how the IRS audits and enforces tax laws against a president.

Mnuchin took issue with Neal's stated purpose for wanting the documents, writing in his April 23 response that the request was “the culmination of a long-running, well-documented effort to expose the President’s tax returns for the sake of exposure.”

At the time, Mnuchin said he would be happy to provide Neal with more information about how the IRS conducts audits of presidents, which are mandatory by an internal policy but not by federal law. In Monday’s letter, Mnuchin renewed his offer to provide information about IRS audits.

"If the Committee is interested, we remain committed to providing such an accommodation," Mnuchin said.

Democrats are also likely to object to Mnuchin’s role in rejecting their request. While the tax code states that the Treasury secretary shall provide requested tax returns, the Treasury Department for decades has delegated tax administration matters to the IRS, so Neal sent his request to IRS Commissioner Charles Rettig rather than to Mnuchin.

Democrats have argued that any involvement by Mnuchin in responding to their request is improper political interference. Mnuchin has pointed out that he supervises the IRS.

Trump has made clear he does not want to turn over his tax returns while he’s under audit, and that he plans to fight congressional requests for information about his finances. Mnuchin, a loyal ally of Trump, had previously said that he didn’t want the IRS to be weaponized for political purposes.

--Updated at 6:37 p.m.