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IRS memo contradicts Mnuchin, says agency must comply with subpoena for Trump's tax returns  3 Months ago

Source:   USA Today  

A draft memo written by an IRS lawyer says the agency must comply with congressional committee requests for President Donald Trump's tax returns unless he claims executive privilege, according to reports from The New York Times and The Washington Post. 

The memo, first obtained by the Post, appears to contradict the administration's legal argument that Congress must have a "legitimate legislative purpose" for requesting the returns.

Treasury Secretary Steve Mnuchin has thus far refused to honor a subpoena from the House Ways and Means Committee for six years of the president's federal tax filings. But the memo says compliance "is mandatory, requiring the Secretary to disclose returns, and return information, requested by the tax-writing Chairs," according to the Post. 

Mnuchin said Wednesday during a House Financial Services Committee hearing that he first learned of the memo from the Post and only glanced at it on his way to the hearing. 

He disputed the assertion that the memo contradicted his conclusions, telling Rep. Jennifer Wexton, D-Va., "that memo I understand is addressing a different issue, and is not addressing the issue that we and the Department of Justice looked at." 

"When it comes to constitutional issues there could be different interpretations and that's why there's a third branch of government," Mnuchin said, signaling his belief that the courts would have to resolve the dispute. 

Mnuchin told Wexton he did not know why the memo had only now come to his attention. 

"We're trying to find out who wrote the memo, where it came from, when it was and why it wasn't distributed," he said. 

The IRS confirmed the authenticity of the memo, and spokesman Bruce Friedland told the Times it was written last fall. He said IRS Commissioner Charles Rettig and the agency's top lawyer, Michael Desmond, did not know about the memo until this week and that it was never sent to the Treasury Department. 

Friedland told the Times the memo "is a draft background paper that was never finalized" and that it "is not the official position of the IRS." 

According to the Post, the memo says the law "does not allow the Secretary to exercise discretion in disclosing the information provided the statutory conditions are met" and that "the Secretary’s obligation to disclose return and return information" does not require the committee "to state a reason for the request." 

It says the "only basis" for the IRS to refuse to comply with the subpoena is "the invocation of the doctrine of executive privilege."

The Post said the memo was written by a lawyer with the agency's Office of Chief Counsel, but the paper could not determine the identity of the lawyer. 

Trump has refused to share his tax returns since the 2016 presidential campaign on the grounds that he has been under audit. But he has not provided evidence of such an audit and the IRS has no rule prohibiting an individual from sharing tax returns that are under audit. 

Mnuchin said Wednesday that the people do not have a right to see the president's tax returns and "the American public knew that he didn't release them before they voted for him." Trump has made similar arguments, saying in a tweet earlier this month that the "voters didn't care" that he didn't disclose his tax filings. 

On Friday, Mnuchin told House Ways and Means Committee Chairman Richard Neal, D-Mass., in a letter that he consulted with counsel for the Justice Department and "we have determined that the Committee's request lacks a legitimate legislative purpose."

"The Department is therefore not authorized to disclose the requested returns and return information," Mnuchin said.

In response to "the Treasury Secretary’s failure to comply" Neal said in a statement that he was "consulting with counsel on how best to enforce the subpoenas moving forward." 

On Wednesday, Rep. Alma Adams, D-N.C., asked Mnuchin, "Are you aware then that by denying this that you are in direct violation of the law?" 

"No, absolutely not. I have been advised I am not violating the law. I never would have done anything that violated the law, and quite the contrary I've been advised that had I turned them over, I would be violating the law," he responded. 

Neal had already made two requests to Rettig for the returns before issuing the subpoena to Mnuchin. He asked for the tax filings under a 1924 law stating that the IRS "shall furnish" any individual's tax returns if they are requested by the chair of the House Ways and Means Committee, the Senate Finance Committee or the Joint Committee on Taxation. The only limitation on that power explicitly expressed in the law is that the returns must be viewed in "closed session." 

In his statement on Friday, Neal said the law "does not allow for discretion as to whether to comply" with the request. But he did outline a legislative purpose in his request, saying the returns were necessary for a review of the process for auditing presidential tax returns. Mnuchin has argued Trump's returns aren't necessary for such a review. 

But, as the contradictions between the IRS memo and the administration's official position indicate, there is some debate on the question of whether the committees must have a "legislative purpose" to request the documents, and – if it is necessary –whether Neal's request demonstrates such a purpose. 

"The memo writer’s interpretation is that the IRS has no wiggle room on this," University of Chicago Law School professor Daniel Hemel told the Post. "Mnuchin is saying the House Ways and Means Committee has not asserted a legitimate legislative purpose. The memo says they don’t have to assert a legitimate legislative purpose – or any purpose at all." 

"The House Ways and Means Committee’s request to obtain the president’s tax returns falls squarely within its oversight and legislative authority, and Treasury Secretary Mnuchin has no basis to refuse the request," Fordham University law professor Rebecca Kysar told Vox.

But other experts have cited the potential for abuse if Congress is given the power to request individuals' tax returns without limitation. 

An April 2019 Congressional Research Service analysis compiled by legislative attorneys said that the law would likely be "subject to the same legal limitations that generally attach to Congress’ use of other compulsory investigative tools. Notably, the inquiry must further a 'legislative purpose' and not otherwise breach relevant constitutional rights or privileges." 

But that report notes that the Supreme Court's interpretation of a legislative purpose is "relatively generous" and "authorizes inquiry into any topic upon which legislation could be had." It said the Supreme Court has also found Congress' "power of inquiry" to conduct oversight to be "penetrating and far reaching" but that it must not be used to  "expose for the sake of exposure" and used against an individual when the inquiry could "result in no valid legislation." 

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