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DOJ U-Turn Puts Trump Taxes Nearly within Neal’s Grasp…

DOJ found ways to give Neal the means to see Turmp’s taxes. (WMP&I)

About two years after first filing suit to obtain Donald Trump’s taxes, the House Committee on Ways & Means may finally get them. Late last month, the US Department of Justice authorized the Treasury Department to disclose Trump returns to the Committee. This was a reversal from the prior administration, which, obviously, had little interest in delivering the records to Capitol Hill.

The notice from the DOJ’s Office of Legal Counsel came in response to a June letter the Committee sent President Joe Biden’s Secretary of the Treasury, Janet Yellen. That letter did not differ much from the original April 3, 2019 request for Trump’s taxes.  However, the specificity of potential legislative activity has sharpened after the years-long effort to secure the 1040’s of Florida’s most infamous resident.

“As I have maintained for years, the Committee’s case is very strong and the law is on our side. I am glad that the Department of Justice agrees and that we can move forward,” said Committee Chair and Springfield Congressman Richard Neal in a statement from July 30.

Yellen’s predecessor Steven Mnuchin had maintained that Neal’s 2019 request did not serve a legislative purpose. That led to litigation in US District court in Washington, which may or may not be in its final stages.

The Committee sued the Treasury Department after Mnuchin declined Neal’s request. Trump later intervened personally. With the Committee and DOJ now on the same page, Trump attorneys filed new papers to  block Treasury from turning over the documents.

Critics in 2018 said Neal dragged his feet requesting the returns and then filing suit. The issue became something of a flashpoint in his 2020 primary battle with then-Holyoke mayor Alex Morse. It became fodder for complaints that House Democrats were failing to hold the real estate tycoon and provocateur to account.

Jeff Hauser, executive director of the Revolving Door Project at the Center for Economic & Police Research, said the pursuit of the returns was important because of the implications of having somebody like Trump in the White House. With a history of tax avoidance, perhaps outright evasion and unclear interests abroad, it was critical Congress obtain the records.

“It has taken a long time, but we think that House Democrats are finally actually committed to securing the returns, not just doing the absolute minimum of performative necessity,” he said in an email.

Home of the Justice Department in DC (via wikipedia)

Hauser added that DOJ could have fought harder to enforce “one of the most straightforward statutes in the entire US Code.” Still, the shift suggested both public pressure worked and DOJ wanted to avoid appearing to protect Trump’s interests.

The statute Hauser referenced is Section 6103(f) of the Internal Revenue Code. It allows the Ways & Means Committee chair, the Senate Finance Committee chair or the Joint Committee on Taxation to request tax records. While today it sits in a section about privacy, it dates to a Coolidge-era law. Western Massachusetts’s own Silent Cal signed the Revenue Act of 1924, which established Congressional access to tax records. In its current form, committee chairs need only send a written request.

Despite the law’s age and location in the tax code, Republicans cast the DOJ ruling as something new.

“Privacy should matter,” Ranking member Kevin Brady said in a press release. “Instead, this sets a dangerous precedent that weaponizes the tax code by giving Congress the dangerous power to rummage through anyone’s private tax returns for purely political reasons.”

Neal’s June letter goes into much more detail than his 2019 letter did. He specifically cites the ongoing litigation as a reason for sending a new letter. The 2019 letter mentions the presidential audit program begun in 1977. This year Neal, a former history teacher, delved into the past of the mandatory audit program for presidents. The program began after it became public that the IRS had not properly handled Richard Nixon’s tax documents. After that incident, the predecessor to the Joint Committee on taxation reviewed the 37th president’s returns and found he owed over $400,000.

Richard Neal

Some funny business going on here? (via YouTube/Ways & Means Cmte)

The letter notes that much of the Internal Revenue Manual’s material on this program are outdated. Moreover, safeguards for presidents—and vice-presidents who also face the audits—do not appear sufficient for sprawling corporate structures and their taxes such as those pertaining to Trump. Neal claims Trump knew the identity of the revenue officer handling his audit. Trump’s representatives also allegedly had contact with this person.

The letter observes Trump’s uniqueness as a taxpayer. Neal points to the bombshell 2020 New York Times report on Trump’s tax returns. The paper found his ever-ongoing was real audit, but could yield a $100 million tax bill.

“Understanding how the IRS handled these issues is crucial to the Committee’s inquiry into whether the mandatory audit program requires legislative action,” Neal wrote.

The returns could be foundational to legislation that strengthens the presidential audit program. It could also inform bills that provide independence and protection to IRS employees enforcing this law.

One key difference from 2019 is the period of taxes requested. The Committee maintained a six -year window, but from 2021 that would back to 2015 rather than 2013.

“The Committee’s June 2021 Request seeks the same categories of information as the April 2019 Request, but now for the tax years 2015 through 2020,” the OLC memo notes.

The tone of the new memo differs from its predecessor while agreeing requests outside  Congress’s power are improper. Yet, it pares back how much the executive branch can assume such.

The Trump DOJ had argued the administration had an obligation to consider the true purpose of such requests. The executive could deny those that fell outside Congress’s powers.

“The 2019 Opinion went astray, however,” the new memo reads, “in suggesting that the Executive Branch should closely scrutinize the Committee’s stated justifications for its requests in a manner that failed to accord the respect and deference due a coordinate branch of government.”

Actually, yes we can… (WMP&I)

The OLC states the statute is clear on its face. Congress’s reason for the returns are well within the ambit of Congress’s lawmaking authority. From this power spring the legislature’s power to investigate and oversee the executive branch. In other words, the executive cannot ignore a facially valid request. The memo notes that recent court battles Trump fought and lost before the Supreme Court. These cases underscore the limits of the executive branch’s ability to keep things from Congress.

Not surprisingly, Trump and his companies—whose returns have also been requested and thus are parties to the suit too—disagree. In a windy filing last week, Trump repeated many claims his DOJ once made, dismissing any legitimate interest from Congress.

Before stating counterclaims and crossclaims, Trump’s latest filing asserts “Democrats in Congress and across the country only became more eager to disclose the President’s tax returns for political gain.”

The filing name checks almost every conservative boogieman and woman starting with Secretary of State Hillary Clinton. House Speaker Nancy Pelosi, half the Ways & Means Committee, numerous Committee chairs, and the Squad also make cameos. The filing mentions a New York law allowing state tax disclosures to the Ways & Means Committee chair, legislation Neal resisted using. Indulging in Nixon erasure, it incorrectly claims Section 6103(f) has not been used against a former president.

The counts allege violations of due process, the First Amendment, Section 6103(f) and Supreme Court jurisprudence. As a political instrument, the filing is red meat for Trump’s base. As a legal document, the counterclaims and crossclaims amount to little more than a belch with case citations.

The speed of McFadden’s judgement looms… (via wikipedia)

Still, Judge Trevor McFadden, a Trump appointee, could enjoin Treasury from disclosing the documents. If appeals ensue, the Committee may have a wait on its hands.

“The Committee’s case is strong, the claims from the Intervenor-Defendants are not unexpected, and we maintain that the law is on our side,” a Ways & Means Committee spokesperson told WMP&I.

Unless the case drags out and the GOP wins the House, this saga is coming to a close. What the Ways & Means Committee does once it has the records is still an open question.

Hauser, of the Revolving Door Project agreed that the Committee’s stated purpose to obtain the taxes was important. However, he also said  Congress and the public must analyze the returns and learn how the returns were handled. From there, they can work to ensure the presidency does not entrench personal wealth and power as in some countries.

That speaks to a broader concern about wealth concentration in the US. Hauser pointed to reports from ProPublica that show how the IRS is unable to ensure the rich paying what they rightly own in taxes. This, however, he said “isn’t enough to build the political momentum needed to bend the arc of our history back toward equal justice under law.”

Trump could be only the tip of the iceberg. Right-wing billionaire financiers like Robert Mercer and his ilk should also be Section 6103(f)’s crosshairs, Hauser argued.

“In general, the Ways and Means Committee should have a deeper understanding of tax evasion than ProPublica, even as I suspect that as of now the opposite is the case,” he said.