The Department of Justice (DOJ) finally submitted its brief explaining why the secretary of the Treasury and IRS commissioner are not complying with a Congressional subpoena issued to them from House Ways and Means Committee Chairman Richard Nea for Donald Trump’s personal tax returns as well as business-related tax returns and return information from the IRS.
Essentially, the DOJ explained that it viewed the Congressional subpoena to be a pretext to obtain and then publicly disclose the President’s tax returns when he had made it clear that it was not his intention to do so.
The DOJ acknowledged that a plain-language reading of Section 6103(f) of the Internal Revenue Code required compliance and an obligation on the part of the IRS to turn over the requested tax returns — but then the DOJ divined and opined that Chairman Neal’s request had no legislative justification and was a pretextual means to a public disclosure end result that was ultimately motivated by politics.
IRS Commissioner Charles Rettig — a Trump appointee — declined to comply with a written request by Chairman Neal for Trump’s tax returns, passing the buck to his boss, Treasury Secretary Steven Mnuchin. Mnuchin also demurred compliance with the Congressional subpoena, explaining that his rejection of the subpoena was upon the advice of the DOJ, whose above referenced written opinion would be forthcoming.
The DOJ opinion asserted that the executive function of government, which the IRS and Treasury Department fall under, has an obligation to protect the confidentiality of tax returns and would not accept the authority of a written request under Section 6103(f) from Congress unless there was an acceptable legislative intent behind the tax return request.
It is here that the rubber meets the road, and it is here that the courts will make their analysis and ultimately their decision.
In anticipation of the coming legal battle over disclosure of Trump’s tax returns, the IRS Office of Chief Counsel drafted a legal opinion titled “Congressional Access to Returns and Return Information.”
IRS Counsel deals with requests for tax returns from authorized agencies every day in each of its offices around the country. There is no more experienced legal authority when it comes to discerning the nuances of IRS disclosure authority than IRS Counsel. It also should be noted that the draft disclosure opinion by IRS Counsel was formulated prior to the placement of current IRS Chief Counsel Michael Desmond, who took office in February 2019.
So President Trump had in place both his hand-picked IRS commissioner, Rettig, as well as Chief Counsel Desmond to advise the Treasury secretary and past Trump business partner, Mnuchin, as to the best legal course to take with regard to the tax return disclosure issue. Yet Mnuchin chose to punt and to rely upon the DOJ for legal advice and ignore that of the best legal experts in the field on the matter.
We can only speculate that the DOJ was brought into this matter in conjunction with the current White House’s stonewalling of all written requests and subpoenas from congressional oversight committees. Whatever the reason for the DOJ’s entry into the tax disclosure matter, it would appear that the president is being ill served. It is highly likely that an appellate opinion will come down that will mirror that of the draft IRS Counsel opinion in this matter.
A couple of quotes from the IRS draft opinion are dispositive:
- “In general, the statutes provide that the Secretary (Treasury) shall furnish returns and return information upon a specific written request from the Chair of the respective Committees… Unlike some other provisions of section 6103, the language in subsection 6103(f)(1) and (2) is mandatory, requiring the Secretary to disclose returns and return information requested from the tax-writing Chairs.”
- “Subsection (f)(1) and (2) do not require the Ways and Means and Finance Chair or JCT Chief of Staff to include a reason or purpose for the request. Therefore the Secretary’s obligation to disclose return and return information would not be affected by the failure of a tax-writing committee or the JCT to state a reason for the request.”
It should be noted that Chairman’s Neal request did, in fact, include a reference to a need for the House Ways and Means committee to review Presidential audits: “The Committee is considering legislative proposals and conducting oversight related to our Federal tax laws including but not limited to, the extent to which the IRS audits and enforces the Federal tax laws against a President.”
In a nutshell, what we have here is the Treasury secretary ignoring the advice of his most experienced legal minds with regard to IRS disclosure law and punting the issue to the DOJ and hoping that the creation — some would call a concoction — of an alternate legal issue over the plain-language reading of the IRS disclosure statute will ignite a constitutional issue worthy of a favorable appellate ruling.
Absent that, the only real accomplishment is kicking the can down the political road.
Justice delayed is justice denied.
Martin J. Sheil is a retired supervisory agent for IRS Criminal Investigation with 30 years experience, including service as coordinator of the Organized Crime Drug Enforcement Task Force (OCDETF) for the Gulf Coast Region, Branch Chief for the North Texas District (Dallas), Special Agent in Charge for the South Texas District (San Antonio) and as Director of IRS CI Asset Forfeiture in Washington, D.C.