The House Ways and Means Oversight Subcommittee is set to hold a Thursday hearing examining the law surrounding presidential tax returns.
It’s a rare event for Congress to publicize confidential tax data, but it’s happened twice—and the last episode may offer clues as to how this effort will play out.
In Thursday's hearing, lawmakers are set to examine a portion of H.R. 1, the House Democratic majority’s signature legislation aimed at overhauling election and campaign finance rules. The bill, which is unlikely to pass the Senate, in part requires that presidential candidates release 10 years of past tax returns.
President Trump, claiming he is under audit, has refused to release his returns both before the election and after. Tax experts say he is free to release his returns even under an audit.
Ways and Means Democrats will also likely quiz witnesses about a more direct approach to obtaining Trump’s returns: using Section 6103 of the tax code to first request the documents from the Treasury Department and then voting to submit them to the full House, thus making them public. Only the Ways and Means Committee, the Senate Finance Committee, and the Joint Committee on Taxation have the power to do so.
Congress publicized President Nixon’s confidential tax information in a Joint Committee on Taxation audit report—initiated at Nixon’s request—showing that he had underpaid taxes across several years. The Ways and Means Committee voted to make the report public.
The most recent effort has some echoes—and a few differences—to when the partisan roles were reversed, and the GOP was investigating the Obama-era IRS controversy in which Republicans accused the agency of targeting conservative political groups for extra scrutiny when applying for tax-exempt status. Then, it was Republicans who made confidential taxpayer data public, not of the president, but of 51 groups who were seeking tax-exempt status or contesting a denial.
“The 2014 episode provides a road map for how the Ways and Means Committee can request confidential taxpayer information and then disclose it to the public, arguably without violating the taxpayer-privacy statute [Section 6103],” said Lloyd Hitoshi Mayer, a professor at Notre Dame Law School.
Following the 2013 revelation that the IRS had targeted certain political groups applying for nonprofit status for extra scrutiny, the GOP-led House launched an investigation, with the tax-writing Ways and Means Committee and the Oversight Committee leading the way.
What they produced was a letter to the Justice Department referring former IRS official Lois Lerner for criminal investigation for her role in the targeting scandal. The DOJ declined to charge Lerner in 2017.
The referral was the result of a long committee process that included an executive session in which lawmakers made a 23-14, party-line vote to submit the referral to the full House to be made public.
The referral included the confidential tax information of 51 groups: their names, employer identification numbers, the status of their applications for nonprofit status, and issues IRS screeners found with their applications. The disclosure covered a broad range of organizations, from conservative groups like Crossroads GPS to others with no apparent connection to Lerner or the targeting controversy, such as the Miss America Foundation and the World Wildlife Fund.
What then-House Ways and Means Committee Chairman Dave Camp and others were attempting to show with the disclosures was the alleged added scrutiny and discrimination of conservative groups compared to others.
Not everyone on the committee agreed with its interpretation of the statute, Mayer said, but it does create a precedent for a similar release.
University of Virginia law professor George Yin, however, wrote at the time that the committee had broken the law in releasing the taxpayer information. The confidential data wasn’t discussed in the hearing, nor did the committee give an explanation of its reasons for making the information public, he said. Yin is set to speak at Thursday’s hearing.
There’s likely to be no letter to the Justice Department, but House Ways and Means Committee Chairman Richard Neal could find a similar vehicle with which to publicize Trump’s tax returns. Some legal scholars like Yin argue that the committee must find a legitimate legislative or oversight purpose for publicizing confidential tax information. Democrats may use the disclosure provisions in H.R. 1. The committee may also examine the IRS’s auditing of the president’s tax returns.
Mentioning White House plans to resist any requests from the committee for the president’s tax returns, Ways and Means Democrat Lloyd Doggett told reporters that “it’s important that we lay out a strong case for the connection to the committee.”
The effort will ultimately be a battle between the executive and legislative branches that takes place in court, said a former congressional aide involved in the 2014 investigation who requested anonymity to speak candidly.
The aide said that there are differences between the two episodes, both in the facts of the committee investigations and the purpose behind making the tax information public.
“I would argue that a principal difference in 2014 is that it was an investigation aimed at possible wrongdoing by the IRS and it was conducted with the cooperation of the IRS,” the aide said. “And it appears that what we might have now is an investigation not of government wrongdoing, but of simply what’s in the tax returns of the president prior to him being president, with the goal of releasing individual returns.”
So far, Neal has taken a methodical approach to obtaining the president’s returns, saying he is consulting with his legal counsel and stressing that it will likely result in a lengthy, “arduous” court case between lawmakers and the White House.
“On the one hand, this is a nakedly political battle. But on the other hand, this is a space with a lot of untested, difficult legal questions, so it will be fascinating to see how this plays out," the aide said.
Still, some members of the progressive wing of the party want action sooner. Billionaire Democratic activist Tom Steyer has launched a series of commercials calling on Trump to be investigated and impeached, including one targeting Neal. Steyer’s 30-second ad, released Sunday, calls on constituents in Massachusetts’ 1st District to pressure Neal to subpoena Trump’s tax returns and vote more broadly to begin impeachment proceedings.
The ad campaign comes ahead of a Feb. 12 town hall to be held by Steyer in Springfield, Massachusetts, where he will make his impeachment pitch in person to Neal’s constituents, according to needtoimpeach.com, Steyer’s website.
Ways and Means ranking member Kevin Brady said that Republicans’ focus during Thursday's hearing will be on protecting taxpayer privacy.
“Our view is that this isn’t about whether the president should release his tax returns or not; this should be about protecting the rights of every private taxpayer,” Brady told reporters Wednesday. “Weaponizing the tax code for political purposes sets a dangerous precedent.”