Mnuchin refuses to comply with subpoenas for Trump tax returns

Treasury Secretary Steven Mnuchin refused to provide President Donald Trump’s tax returns shortly before a Friday evening deadline as demanded in subpoenas issued last week by House Ways and Means Chairman Richard E. Neal.

Ahead of the 5 p.m. cutoff, Mnuchin released a letter he sent to Neal in which he repeated the argument that the committee “lacks a legitimate legislative purpose” and as a result “we are unable to provide the requested returns and return information.”

[Trump’s tax return battle will be fought in court, Mnuchin says]

On May 10, Neal subpoenaed six years of the president’s personal tax returns along with six years of returns from eight Trump companies. The subpoenas were sent to both Mnuchin and IRS Commissioner Charles Rettig, requiring them to deliver the documents to committee offices by 5 p.m. May 17.

Neal quickly issued a statement after Mnuchin’s letter: “Given the Treasury Secretary’s failure to comply today, I am consulting with counsel on how best to enforce the subpoenas moving forward.”

Mnuchin’s refusal was expected. He indicated earlier this week he would not comply with the subpoenas and neither would Rettig.

“We haven’t made a decision but I think you can guess on the way we’re leaning on our subpoena,” Mnuchin told appropriators Wednesday.

[House Democrats give IRS an extension to provide Trump tax returns]

Speaking with reporters earlier Friday, Neal said once the subpoena deadline passed without compliance his next step would be to head to federal court.

“I anticipate they won’t meet that deadline, and the result will be that we will likely proceed to court as quickly as next week,” he said.

Besides six years of Trump’s personal returns, Neal requested not only the detailed tax returns of eight Trump businesses for the past six years, but all administrative files, including work papers and affidavits for returns of the president and his businesses, along with statements of whether and why a particular return is under audit. As an indication of the large number of documents that would entail, the subpoenas had detailed instructions on indexing and stamping each document with an identifier.

As Mnuchin has repeatedly claimed that Neal “lacks a legitimate legislative purpose,” Neal has pointed to a statute that requires the Treasury Secretary to provide “any” tax return for which the Ways and Means chairman makes a written request.

The two, however, appeared in agreement on where the case is heading.

“This will go to the third branch of government to be resolved,” Mnuchin predicted Wednesday.

Neal dispelled conjecture that his next step would be to hold Mnuchin and Rettig in contempt of Congress.

“I don’t see that right now as an option,” he said to a crowd of reporters after final House votes earlier Friday. “I think the better option for us is to proceed to the court case.”

Last month, Trump made it clear his administration would resist House panel investigations.

“We’re fighting all the subpoenas,” the president said. “These aren’t like impartial people, the Democrats are trying to win 2020.”

Neal’s request is being made under Section 6103 of the tax code, which states that upon “written request” from the chairman of either the House Ways and Means or Senate Finance committees, “the [Treasury] Secretary shall furnish such committee with any return or return information specified.”

The Massachusetts Democrat made his first request April 3, repeated it on April 13 and received Mnuchin’s rejection May 6.

In issuing his subpoenas on May 10, Neal noted his April 3 request was part of his committee’s investigation into the IRS’ automatic annual audits of the president and whether those audits and the agency’s enforcement of federal tax laws pertaining to the president “need to be codified into federal law.” Currently, those audits are required by the Internal Revenue Manual, which was revised in 1977 to require the annual audits, according to a Joint Committee on Taxation history of the issue.

In his responses, Mnuchin has argued that Supreme Court rulings have held that Congress’ “information demands must reasonably serve a legitimate legislative purpose.”

In an April 23 response to Neal, Mnuchin wrote a 10-page letter that included a 42-page appendix consisting largely of quotes in news stories of Democrats advocating for the release of Trump’s tax returns. His argument was that the effort to obtain the president’s tax returns “arose from the presidential election campaign of 2016.”

“The Committee’s April 3 request is the culmination of a long-running, well-documented effort to expose the President’s tax returns for the sake of exposure,” he wrote.

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