Treasury Dept. refuses to comply with Democrats' subpoenas for Trump tax returns, court fight likely

“The result will be that we will likely proceed to court as quickly as next week,” said House Ways and Means Committee Chairman Richard Neal, D-Mass.
Image: Steve Mnuchin
Treasury Secretary Steve Mnuchin had told lawmakers Wednesday that a request for the president's tax returns was likely headed to the courts. Anna Moneymaker / Getty Images

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By Rebecca Shabad and Alexandra Bacallao

WASHINGTON — The Treasury Department said Friday that it would not comply with congressional subpoenas to provide six years of President Donald Trump’s tax returns.

Treasury Secretary Steve Mnuchin sent a letter to House Ways and Means Committee Chairman Richard Neal, D-Mass, before the 5 p.m. ET deadline to hand over the documents. Mnuchin said that, on advice of the Justice Department, Treasury had determined that the committee's request "lacks a legitimate legislative purpose," and so the department is not "authorized to disclose the requested returns."

"For the same reasons, we are unable to provide the requested information in response to the Committee’s subpoena," Mnuchin said.

Neal responded Friday saying that the law provides "clear statutory authority" for him to request and received access to tax returns and return information.

"The law, by its terms, does not allow for discretion as to whether to comply with a request for tax returns and return information," he wrote. "Given the Treasury Secretary’s failure to comply today, I am consulting with counsel on how best to enforce the subpoenas moving forward."

Earlier in the day, Neal told reporters that he anticipated that the Treasury Department would not meet the deadline he had set.

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“The result will be that we will likely proceed to court as quickly as next week,” Neal said.

Asked if Neal is considering holding Mnuchin in contempt, the chairman said: “I don't see that right now as an option. I think the better option for us is to proceed with a court case.”

Neal issued subpoenas to Mnuchin and IRS Commissioner Charles Rettig last Friday after the Treasury Department rejected Neal’s formal request from April for the records. Neal gave them one week to produce the documents.

Mnuchin hinted at the decision in testimony before the Senate on Wednesday. "First of all, we haven’t made a decision, but I think you can guess which way we’re leaning on our subpoena,” he said then.

The Treasury secretary also suggested that the battle over the tax returns would have to be resolved by the courts.

If there is litigation over the documents, he said on Wednesday, “I take great comfort that there’s a third branch of government to deal with this important issue ... "

“This is why there are three branches of government, and if there is a difference of opinion, this will go to the third branch of government to be resolved,” he said, referring to the judicial branch.

Under Section 6103 of the U.S. tax code, if Neal or Senate Finance Committee chair Sen. Charles Grassley, R-Iowa, or the head of the Joint Committee on Taxation formally requests an individual's tax returns, Treasury officials “shall” turn the documents over, language that leading tax analysts have said means officials must provide them.

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 — and now the subpoenas that followed — 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.