Many Happy Returns
Congressman Richard Neal (D-MA), Chairman of the House Ways and Means Committee, this week sent a letter to Internal Revenue Service Commissioner Charles Rettig, requesting individual tax returns of President Trump and the returns of several Trump-related organizations. As one would have expected, the president is pushing back at the request in response to questions and his personal attorney has sent a letter to the General Counsel at the Treasury Department, in which he objects to the release of the returns to the Committee.
On at least the new sources I frequent, the discussion of the outcome of this request has focused on whether Treasury Secretary Mnuchin, who plainly is as subservient to the president as are most of the cabinet members, will intervene to fight the request. The legal pundits who have talked about committee action should the commissioner or the secretary fail to comply have so far confined themselves to discussing remedies such as contempt of Congress. I’d like to discuss what I see as the better remedy, should the request be denied. But first, I wish to lay out my thoughts on why President Trump is so anxious about anyone viewing his returns.
Most of the public discussion has focused on whether the returns will show that the president has had ongoing financial dealings with Russia or Russian entities, or other suspect parties, such as organized crime figures. While these are possible reasons, I suspect the primary reason is this: the returns, like nearly everything the president says every day, are full of lies. Willfully filing a false tax return is a serious crime.
A New York Times special investigation last year revealed “President Trump participated in dubious tax schemes during the 1990s, including instances of outright fraud, that greatly increased the fortune he received from his parents[.]” Taken together, the Times report and the president’s mendacious behavior during the campaign and while in office strongly suggest that he would not be averse to filing fraudulent tax returns.
Turning to the committee chair’s request, 26 U.S.C. § 6103 addresses the confidentiality of individual income tax returns. Subsection (a) generally requires that they be kept confidential, and “except as authorized by this title,” no official or employee “shall disclose any return or return information.” The exception applicable here is provided by subsection (f):
Disclosure to Committees of Congress(1)Committee on Ways and Means, Committee on Finance, and Joint Committee on Taxation
Upon written request from the chairman of the Committee on Ways and Means of the House of Representatives, the chairman of the Committee on Finance of the Senate, or the chairman of the Joint Committee on Taxation, the Secretary shall furnish such committee with any return or return information specified in such request, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.
There has been little reported litigation under this provision. A 1977 opinion from the Office of Legal Counsel in the Department of Justice (Op. 77-23 1 Op. O.L.C. 85) addressed whether subcommittees of Ways and Means and the other named committees could also request returns from the commissioner, and concluded that they could, with proper authorization from the chair or the committee. The opinion concludes that, for subcommittee requests, the “request specifies at least the particular line of inquiry to which the information must relate.” Chairman Neal’s request, which is authorized by the Ways and Means Committee, not a subcommittee, nevertheless sets out such a line of inquiry:
Under the Internal Revenue Manual, individual income tax returns of a President are subject to, mandatory examination, but this practice is IRS policy and not codified in the Federal tax laws. It is necessary for the Committee to determine the scope of any such examination and whether it includes a review of underlying business activities required to be reported on the individual income tax return.
The chair’s letter fulfills the requirements of § 6103 and the OLC opinion. One can imagine the president attempting to assert executive privilege. However, these are his personal tax returns and do not involve communications relating to the performance of his duties.
Turning to the remedy the committee may seek if the commissioner or the secretary do not honor the request, there are two that spring to mind. The commonly discussed one is contempt of Congress. This is typically used when a witness fails to comply with a committee subpoena to testify or produce documents. This would be a circuitous route, first requiring the committee to issue a subpoena to the commissioner, following his refusal, and then, should he continue to refuse, refer the matter to the U.S. Attorney to the District of Columbia for criminal prosecution. In 2017, the Congressional Research Service produced a comprehensive report on the use of contempt of Congress. It is a cumbersome process, and it relies on the willingness of the Department of Justice to move forward with the complaint. That would seem unlikely with the current administration.
To my mind the better remedy is seeking a writ of mandamus. A writ of mandamus is issued by a court against an government official who is refusing to perform a non-discretionary duty, i.e., a mandatory one. Under 28 U.S.C. § 1361, the district courts have the authority to issue such a writ ” to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.” You might recall that Marbury v. Madison, the Supreme Court decision that established judicial review, turned on whether the Supreme Court could issue a writ of mandamus against Secretary of State James Madison to deliver a judicial commission to Mr. Marbury. Chief Justice John Marshall’s opinion held that the statute by which Congress attempted to give that court the authority to issue the writ exceeded the powers granted to the court in the Constitution, and held the statute unconstitutional. District courts now have that authority by statute, under the inferior courts provision of Article III.
If the commissioner, to whom the secretary has delegated all duties regarding the Internal Revenue Service, should fail to comply with Chairman Neal’s letter, or if the secretary should direct him to not so comply, then the chairman has standing to file a petition for a writ of mandamus, directing them to comply. Section 6103 offers no discretion to either of them – the committee’s request is a mandatory directive. While it is likely that the president would direct both officers to appeal any grant of the writ, the power to seek it rests in the chairman and the committee, without any need to seek assistance from the Justice Department. It is the remedy of choice in this situation.