Judge dismisses Trump's bid to keep his taxes from Congress

Written By: Charlie Savage © 2021 The New York Times Company The New York Times
Washington Published: Dec 15, 2021, 04:08 PM(IST)

According to the complaint, Melnick told US Capitol Police during an interrogation in July 2020 that if Trump “loses the 2020 election and refused to step down” he would “acquire weapons and take him down.” Photograph:( AFP )

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Rep. Richard Neal of Massachusetts, the top Democrat on the Ways and Means Committee, first requested copies of Trump’s tax returns in early 2019, after Democrats took over the House. A federal law gives the chairman of that panel broad authority to request any person’s tax returns

A federal judge on Tuesday dismissed a lawsuit by Donald Trump that sought to block Congress from obtaining his tax returns, ruling that the law gives a House committee chairman broad authority to request them despite Trump’s status as a former president.

In a 45-page opinion, Judge Trevor McFadden of the U.S. District Court for the District of Columbia, held that the Treasury Department can provide the tax returns to the House Ways and Means Committee, which could vote to publish them. McFadden, however, stayed his ruling for 10 days to give Trump time to file an appeal, which he is very likely to do.

Rep. Richard Neal of Massachusetts, the top Democrat on the Ways and Means Committee, first requested copies of Trump’s tax returns in early 2019, after Democrats took over the House. A federal law gives the chairman of that panel broad authority to request any person’s tax returns.

The Trump administration refused to comply, however, and the House eventually filed a lawsuit. After Trump left office this year, Neal issued a fresh request for the ex-president’s tax returns from 2015 to 2020 and the Biden administration issued a Justice Department memorandum saying he was entitled to receive them.

Trump’s lawyers, however, sought an injunction to block the request, saying that it served no legitimate purpose and that the real motive was to expose Trump’s financial information for political gain. Lawyers for the House said there were legislative reasons to seek the returns, including studying whether changes are needed to an Internal Revenue Service program that audits presidents.

Even though many House Democrats have expressed a desire to expose Trump’s tax documents without mentioning the IRS program, that rationale was sufficient under the law, McFadden wrote.

“Even if the former president is right on the facts, he is wrong on the law,” wrote McFadden. “A long line of Supreme Court cases requires great deference to facially valid congressional inquiries. Even the special solicitude accorded former presidents does not alter the outcome. The court will therefore dismiss this case.”

In a statement, Neal called the ruling “no surprise.”

“The law is clearly on the committee’s side,” he said. “I am pleased that we’re now one step closer to being able to conduct more thorough oversight of the IRS’ mandatory presidential audit program.”

Lawyers for Trump did not immediately respond to a request for comment. But a member of his legal team has previously vowed to fight the congressional effort “tooth and nail.”

The case traces back to Trump’s decision — first as a presidential candidate in the 2016 election and then in office — to break with modern precedent by refusing to make his tax returns public.

When Democrats won control of the House, they began trying to investigate his finances using congressional oversight powers. Among other things, they heard testimony from Trump’s former lawyer, Michael Cohen, who said that Trump had boasted about inflating the value of assets when it served him, and undervaluing them when it helped to lower his taxes.

As prosecutors in Manhattan weigh whether to charge Trump with fraud, they have zeroed in on financial documents that he used to obtain loans and boast about his wealth, according to people with knowledge of the matter.

The same federal law that empowered Neal to request Trump’s tax returns from the Treasury Department also would permit House Democrats to publish them in the Congressional Record, although that power has rarely been used, McFadden wrote.

Writing that the case put the country in “uncharted territory,” the judge — a 2017 appointee of Trump — warned that he did not think it would be wise for Congress to use its authority to publish Trump’s tax returns.

“Anyone can see that publishing confidential tax information of a political rival is the type of move that will return to plague the inventor,” the judge wrote. But he added: “It might not be right or wise to publish the returns, but it is the chairman’s right to do so.”

In his ruling, McFadden also weighed and rejected a series of other arguments put forward by Trump’s legal team as inadequate. Among them, he ruled that the case should be evaluated based on Neal’s 2021 request — after Trump was no longer president — rather than his 2019 one.

And he rejected the lawyers’ argument that allowing Congress to obtain — and potentially expose — a former president’s tax returns would be unconstitutional as a matter of separation of powers, reasoning that the “threat” of such later exposure would have “minimal” impact on how presidents perform their duties.

But while McFadden ultimately ruled for Congress, his handling of the case illustrated the success of Trump’s strategy of using the slow pace of litigation to run out the clock on congressional oversight efforts. The House filed the case in early July 2019, and nearly 2 1/2 years had elapsed by the time McFadden issued his ruling on Tuesday.

House Democrats have been pursuing a parallel lawsuit to enforce a subpoena of Trump’s accounting firm, Mazars USA, seeking to obtain a broader set of his financial records. In 2020, the Supreme Court sent the Mazars case back down to be reconsidered using a tighter legal standard. An appeals court heard oral arguments in that matter on Monday.

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