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Trump’s Tax Returns: Leaked IRS Memo Says Releasing Them Is ‘Mandatory’

Treasury Secretary Steve Mnuchin doesn’t agree

US Secretary of Treasury Steven Mnuchin speaks at Appropriations Committee Hearing on the FY2020 Budget for the Treasury Department at the Dirksen Senate Office Building in Washington, DC, USA, 15 May 2019. Mr. Mnuchin said that his department and the Justice Department needed to study the provision of the tax code that Democrats were using to seek six years worth of the president's personal and business tax returns.Appropriations Committee Hearing on the FY2020 Budget, Washington, USA - 15 May 2019

Treasury Secretary Steven Mnuchin speaks at Appropriations Committee Hearing in Washington, D.C.

Tasos Katopiois/EPA-EFE/REX/Shutterstock

Last month, House Ways and Means Committee Chairman Richard Neal (D-MA) formally requested six years of President Trump’s tax returns from the IRS. Federal law holds that the the IRS, which is overseen by the Treasury Department, must comply with the request. But Trump maintained that his administration would not provide the returns, and Treasury Secretary Steve Mnuchin ultimately wrote a letter to Neal explaining that he determined the request “lacks a legitimate legislative purpose,” and that the IRS is “not authorized to disclose the requested returns and return information.”

On Tuesday night, the Washington Post reported that some within the IRS don’t exactly agree with Mnuchin’s reasoning. In fact, according to a leaked internal memo obtained by the Post, staffers within the agency felt that complying with a congressional request was “mandatory, requiring the Secretary to disclose returns, and return information, requested by the tax-writing Chairs.” The memo also notes that the law “does not allow the Secretary to exercise discretion,” regarding whether to disclose the returns.

The only way the administration could legally withhold the returns, the memo states, is if the president were to exert executive privilege to keep them out of the hands of Congress. Executive privilege applies mostly to the protection of the “deliberative process” of government, and doesn’t appear to be applicable in the case of the president’s tax returns. The memo even notes that the law stating the IRS “shall furnish” the returns may “preclude” an invocation executive privilege.

Things could get complicated, however, if the tax returns pertain to open criminal investigations.

The 10-page memo, titled “Congressional Access to Returns and Return Information,” was a draft document written by a lawyer in the chief counsel’s office. It was written last fall in anticipation that Democrats would request the president’s tax returns on the same grounds on which Neal requested them in April. “The memo in question is a draft background paper that was never finalized,” IRS spokesman Bruce Friedland told the New York Times. “It is not the official position of the IRS.”

It’s unclear who was aware of the memo. The IRS has denied Commissioner Charles Rettig or Michael Desmond, who took over as chief counsel in March, have seen the memo. The Treasury Department has similarly denied Secretary Mnuchin or other high-ranking department officials had knowledge of it. Former IRS Commissioner John Koskinen told the Times that he would be surprised if this is actually true given the sensitivity of the memo’s contents. “It would be stunning to me if either Rettig or Mnuchin said, ‘Gee, I didn’t know about that,’” Koskinen told the paper.

On Wednesday morning, Mnuchin testified before the House Financial Services Committee. He denied having seen the memo, and disagreed with its conclusions. He even claimed that he would it would have been illegal for him to comply with the request from Congress. “If I had turned them over, I would have been violating the law,” he said.

Trump broke with precedent by refusing to release his tax returns during the 2016 campaign, arguing that wasn’t able to because they were under audit, a claim that has been roundly debunked. But the effort to uncover the president’s financial statements took on a new life last fall when Democrats took control of the House of Representatives, opening up new avenues to investigate potential conflicts of interest within the president’s finances.

Trump has fought any attempts at oversight. When House Oversight Committee Chairman Elijah Cummings (D-MD) issued a subpoena for the accounting firm Mazars USA to turn over the president’s financial records, Trump sued Cummings. Last week, a federal judge upheld the legitimacy of the subpoena. Trump’s lawyers have said they will appeal. Regarding his tax returns, Trump has claimed that because he won the 2016 election despite not having released his returns, the contents of his returns are now irrelevant.

Earlier this month, the Times obtained Trump’s tax information from 1985-1994. It revealed that the renowned business mogul lost $1.17 billion in that time frame, more than any other American taxpayer.

Questions about the president’s myriad financial issues have persisted well into his presidency. In response to a Times report that Deustch Bank flagged the accounts of Trump and Jared Kushner for potential money laundering, the president tweeted on Monday that the report was “phony” and that he doesn’t need to borrow from banks. “When you don’t need or want money, you don’t need or want banks,” he wrote.

In May 2018, Trump borrowed $11.2 million from a small Florida bank to finance the purchase of a Palm Beach mansion. In January, Trump appointed the bank’s CEO to the Atlanta Federal Reserve.

 

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