The Smart Way to Get a President’s Tax Returns

The new Democratic House majority is chomping at the bit to see President Trump’s tax returns, but if they’re not careful the effort could backfire spectacularly.

Rep. Richard Neal listens as President Trump speaks during a meeting with members of the House Ways and Means committee Sept. 26, 2017.
AP Photo/Evan Vucci
Nov. 14, 2018, 8 p.m.

Democrats will assume the House majority in January, and at the top of their agenda is obtaining President Trump’s elusive tax returns.

But the effort is not going to be as simple as asking Treasury Secretary Steven Mnuchin to kindly hand them over.

The day after Democrats took back control of the House last week, Rep. Richard Neal, likely the next Ways and Means Committee chairman, told reporters that there is precedent for obtaining Trump’s tax returns and laid out a rough framework for getting them. Neal said perhaps legal counsel or the Joint Committee on Taxation, which is made up of tax attorneys, CPAs, and economists, may be the proper group to request and review the returns.

“Recall here that it is illegal for a member of Congress, solely, to release anybody’s tax returns,” he said.

Democrats will need to be careful in their effort to publicize the president’s returns, analysts say. A shoddy plan could bring political and potentially legal consequences.

To get Trump’s returns, Democrats will have to reach back nearly 100 years into tax-law history.

During the Teapot Dome scandal of the early 1920s, Congress passed legislation allowing chairmen of the tax-writing committees—House Ways and Means, Senate Finance and Joint Committee on Taxation—to obtain an individual’s tax returns. Congress was interested in then-Treasury Secretary Andrew Mellon’s tax filings amid concerns about conflicts of interest. The provision, part of Section 6103 of the tax code, says that the Treasury Secretary “shall” provide the returns to a closed executive session of the committee.

The committee would then have to vote to release those returns to the full House or Senate, which would effectively put them into the public record.

The law itself doesn’t impose any conditions to pulling the tax returns, but there is a catch.

“There is certainly some analogous Supreme Court precedent that suggests that Congress can only act within the scope of their constitutional responsibilities, so they need to frame this request within the context of legitimate legislative purposes,” said George Yin, a professor of law and taxation at the University of Virginia.

One of those is the 1957 Supreme Court case Watkins v. United States, in which John Thomas Watkins, an Illinois labor-union official, was convicted of contempt of Congress for failing to identify suspected Communists to the McCarthy-era House Un-American Activities Committee, saying it was outside the scope of the subject on which he was called to testify.

Watkins fought the conviction, and the Supreme Court found that Congress’s power to conduct investigations is broad but not unlimited, and “no inquiry is an end in itself; it must be related to, and in furtherance of, a legitimate task of Congress.”

Neal’s request must have a legitimate legislative reason. A nakedly political effort to make public the president’s returns would get less traction in a likely court battle with the administration than one backed by strong ties to the committee’s tax-oversight jurisdiction.

Yin, who served as chief of staff of the Joint Committee on Taxation from 2003 to 2005, identified three areas where Neal could focus. Congress could explore potential conflicts of interest between Trump’s businesses and the administration. Neal could also use his oversight powers over the IRS to examine the multiyear audit of Trump’s tax filings that the president says the agency is conducting. Lastly, Yin said Neal could examine Trump’s tax compliance following the October New York Times story that found that he may have engaged in illegal tax schemes across decades.

Democrats could get further cover by first advancing a resolution in the full House directing Neal to seek out Trump’s returns and laying out the legal reasoning.

“As a precautionary measure, they should have that debate, they should introduce it, they should talk about it on the House floor, they should give their reasoning, and they should vote,” Yin said.

But obtaining the returns is only the first half of the job.

Lawmakers must examine Trump’s returns, which raises the question of whether the Ways and Means Committee Democrats have the expertise on staff to thoroughly vet what is likely a massive and complicated filing. That’s potentially one reason Neal has suggested the Joint Committee on Taxation, which has more-specialized experts and would be seen as more politically neutral, may take up the examination.

And releasing the returns at this point could carry a serious penalty. An overzealous staffer leaking the filings could face up to a five-year prison term for unlawfully disclosing tax information.

To then make the returns public, the committee must vote to submit all or some of the information to the full House.

So if Neal obtains the returns and doesn’t find anything consistent with the basis for the committee’s investigation, the Trump administration might make the argument that there are no grounds to submit the returns to the full House and publicize them, Yin said.

Republicans have already mounted an early resistance to the upcoming Democratic push.

Senate Majority Leader Mitch McConnell described the effort to release Trump’s returns as “presidential harassment” and said it would backfire on Democrats politically, citing his own party’s effort to impeach President Clinton over the Monica Lewinsky scandal.

If House Democrats investigate his administration, Trump said in a news conference following the midterms that he would view it as a “war-like posture” and it would make cooperation on legislation difficult.

There is no legal reason Trump could not voluntarily release his returns.

Even if Democrats could successfully publicize Trump’s tax returns, they must still weigh the use of both House resources and political capital against other, potentially more fruitful, areas of investigation. Democrats have planned a flood of oversight hearings into administration policies, Cabinet members, and Trump’s other business practices that may not have the cloud of a years-long court fight hanging over them.

“The tax returns will be maybe one of dozens of things that the Democrats in the House want to do, and they’re going to have to prioritize,” said Mark Mazur, an analyst at the Tax Policy Center and former assistant secretary for tax policy at the Treasury Department. “There probably is not enough bandwidth in the House of Representatives to do all the things they want to do, let alone for the administration to respond to those.”

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