Mnuchin signals administration won't comply with subpoena for Trump tax returns

Treasury Secretary Steven MnuchinSteven Terner MnuchinTrump says he'll decide on foreign aid cuts within a week Democrats push judge for quick action on Trump tax returns lawsuit Five key players in Trump's trade battles MORE on Wednesday signaled that the administration would not provide President TrumpDonald John Trump Former US ambassador: 'Denmark is not a big fan of Donald Trump and his politics' Senate Democrats push for arms control language in defense policy bill Detroit county sheriff endorses Booker for president MORE's tax returns that have been subpoenaed by House Democrats. 

“We haven’t made a decision, but I think you can guess which way we’re leaning on our subpoena,” Mnuchin said at a Senate Appropriations subcommittee hearing.

ADVERTISEMENT

Mnuchin also repeatedly said during the hearing that he thinks the fight between Congress and the executive branch over the issue is likely to end up in the courts. 

"This is why there are three branches of government, so if there is a difference of opinion, this will go to the third branch of government to be resolved," he said.

Mnuchin's comments come two days before the deadline for him and IRS Commissioner Charles Rettig to comply with subpoenas for six years of Trump's personal and business tax returns. The administration officials are not expected to provide the documents to Congress.

House Ways and Means Committee Chairman Richard NealRichard Edmund NealTrump argues NY tax return case should take place in DC NY files motion to keep Trump tax returns lawsuit out of DC court Democrats give cold shoulder to Warren wealth tax MORE (D-Mass.) in April requested the tax returns from the IRS under a provision of the tax code that states that the Treasury secretary "shall furnish" tax returns requested by the chairmen of Congress's tax-writing committees.

Neal said that he wants the returns because his committee is interested in oversight and legislation relating to how the IRS audits and enforces tax laws against a president. 

Mnuchin rejected the request on May 6, saying the request doesn't have a legitimate legislative purpose, prompting Neal to then issue subpoenas to Mnuchin and IRS Commissioner Charles Rettig for the documents. The deadline to produce the documents requested under the subpoenas is Friday at 5 p.m.

When asked after his testimony if he was afraid he will face monetary fines if he didn't comply with the subpoena, Mnuchin told reporters he is "going to follow the law, which is as determined by the Department of Justice who advises me." Mnuchin also said that Treasury will provide a response to Neal's subpoena by the deadline the chairman gave.

During the hearing, Sen. Chris Van HollenChristopher (Chris) Van HollenSenate Democrats push Trump to permanently shutter migrant detention facility USDA eases relocation timeline as researchers flee agency Fed to launch real-time payments system in 2023 MORE (D-Md.) pressed Mnuchin and Rettig about whether Congress has an interest reviewing whether the IRS is enforcing tax laws against the president, who are subject to automatic audits under IRS policy.

He noted that there were allegations that former President Nixon had not paid taxes he owed, and that was only proven when Congress's Joint Committee on Taxation examined his returns.

"Given that history, doesn't Congress as a separate branch of government have an interest, a legitimate interest, in determining whether or not the IRS is enforcing tax laws with respect to a president of the United States?" Van Hollen asked.

Mnuchin and Rettig both said that they would be happy to have their staff brief lawmakers about the IRS's mandatory audit procedures. Mnuchin said that when it comes to the specific request for Trump's tax returns, the request has a "precedent way beyond any one president" and "affects the weaponization of the IRS and could be used against anyone."

Van Hollen also asked about whether the IRS's procedures for automatic audits of presidents apply to the tax returns of presidents from before they took office that were already under audit, and whether the automatic audits include business tax returns. 

Rettig said it's his understanding that the automatic audit procedures do apply to prior-year returns, and that during the audit of any taxpayer the tax returns of business entities would come up but that it's up to IRS examiners and managers to decide how deep to delve into them.

Sen. Chris CoonsChristopher (Chris) Andrew CoonsThe United States broken patent system is getting worse Biden faces scrutiny for his age from other Democrats Democrats press FBI for details on Kavanaugh investigation MORE (D-Del.) the top Democrat on the subcommittee, asked Mnuchin why he didn't leave it up to the IRS to respond to the request for Trump's tax returns. Neal's request was addressed to Rettig, not Mnuchin because Treasury has delegated tax-administration responsibilities to the IRS.

Mnuchin said that he has "a responsibility to supervise the IRS commissioner and the IRS.” He said that he's had multiple conversations with Rettig, Treasury's legal department and the IRS legal department about the tax-return issue, and that Rettig "independently concurred" with his decision and sent notices to the Ways and Means Committee agreeing with the decision.

When reporters asked Rettig about these comments from Mnuchin after the hearing, Rettig said he can't say anything beyond Mnuchin's letters to the Ways and Means Committee and congressional testimony. 

GOP Sen. John KennedyJohn Neely KennedyMORE (La.), the chairman of the subcommittee, asked Mnuchin and Rettig hypotheticals about whether it would be a good idea for him to request others' tax returns, including Democratic presidential candidates, his neighbors, and the referee that caused controversy with a missed call in the NFC championship game that the New Orleans Saints lost to the Los Angeles Rams. 

In response to the question about requesting the Democratic candidates, Mnuchin said it would be "very dangerous to provide you with those returns."

Van Hollen said that he agrees with Kennedy that the referee in the Saints-Rams football game blew a call, but that the referee is different from the president.

"The referee of that game obviously doesn't oversee the commissioner of the IRS," he said. 

Updated at 1:10 p.m.