WASHINGTON — Treasury Secretary Steven Mnuchin on Monday rejected House Democrats’ request for President Donald Trump’s tax returns, failing for the third time to meet a congressional deadline to turn over the documents.
The move raised the stakes in the fight between the administration and Congress over the returns, making an unprecedented legal battle to obtain them all but certain.
The Treasury secretary told House Ways and Means Chairman Richard Neal, D-Mass., in a letter that his committee's request for the president's tax returns “lacks a legitimate legislative purpose.”
"Out of respect for the deadlines previously set by the Committee, and consistent with our commitment to a prompt response, I am informing you now that the Department may not lawfully fulfill the Committee's request," Mnuchin said, citing guidance from the Department of Justice.
He added that the DOJ would publish its legal opinion on the issue "as soon as practicable."
Neal said in a statement following the letter that he would "consult with counsel and determine the appropriate response.”
Rep. Lloyd Doggett, D-Texas, a senior member on Ways and Means, released a statement accusing President Trump of "obstruct[ing] both Mueller and his tax returns from speaking for themselves."
"We need immediate legal action. We cannot allow this bad president to set bad precedent," he said.
Trump has repeatedly claimed since the 2016 race that he would not release the documents because he has been under audit by the IRS, though he has not provided any evidence of such a review, which would not legally prevent him from releasing his returns.
Last month, acting White House chief of staff Mick Mulvaney said in an interview on Fox News that Democrats will "never" be able to obtain the president's tax returns.
"The Democrats are demanding that the IRS turn over the documents, and that is not going to happen, and they know it," Mulvaney said. "This is a political stunt by my former colleagues."
Mnuchin’s final answer Monday comes more than a month after Neal formally requested six years of Trump’s tax returns from the IRS.
In congressional testimony several days later, Mnuchin told a House Appropriations subcommittee that the Treasury’s legal department had held “informational” discussions with the White House Office of General Counsel about the expected congressional demand for the president’s tax returns ahead of Neal’s April 3 request.
Ways and Means is one of three congressional committees that has the authority to seek the president's returns. The other two are the Senate Finance Committee and the Joint Committee on Taxation.
As the committee's chairman, Neal has the power to send a written request to the IRS to provide the information. With the Treasury Department's denial of that request, House Democrats will have to decide whether to pursue the tax returns through a legal route. If they are obtained, Neal would then have to designate the panel’s members as “agents” to read the returns. They would then have to vote to make the documents public and report them to the full House.
Under Section 6103 of the U.S. tax code, if Neal or Grassley, chairman of the Senate Finance Committee or the head of the Joint Committee on Taxation formally requests a person’s tax returns, Treasury officials “shall” turn the documents over, according to David Cay Johnston, Pulitzer Prize-winning investigative journalist and expert on tax law.
In a recent column for The Daily Beast, Johnston wrote that that section of the federal law doesn’t have any “wiggle room” that would protect Trump’s tax returns from being released.
“There is, however, a law requiring every federal 'employee' who touches the tax system to do their duty or be removed from office,” Johnston wrote.
He said that Mnuchin and IRS Commissioner Charles Rettig risk violating another section of the tax code, 7214, that could be punishable by up to five years in prison or removal from public office.
Johnston told NBC News last year that it would be illegal if Treasury blocked the release of the returns.
"The reason that would be illegal is that the statute says that they 'shall' produce the returns. It's not 'may' or 'can' or something else. It is a mandatory act," he said. "Unless they get the most extraordinary partisan judge, then what will happen at the end of the day is very clear: They'll have to turn them over."
