House Files Lawsuit Seeking Disclosure of Trump Tax Returns

WASHINGTON — The House sued the Treasury Department and the Internal Revenue Service on Tuesday, demanding access to President Trump’s tax returns and escalating a fight with an administration that has repeatedly dismissed as illegitimate its attempt to obtain the financial records.

The lawsuit moves the dispute into the federal courts after months of sniping between the Democratic-led House Ways and Means Committee, which requested and then subpoenaed the returns, and Treasury Secretary Steven Mnuchin. The case may ultimately go to the Supreme Court, and its outcome is likely to determine whether financial information that Mr. Trump has kept closely guarded in spite of longstanding presidential tradition will be viewed by Congress and, ultimately, the public.

In Tuesday’s filing, the House argued that the administration’s defiance of its request amounted to “an extraordinary attack on the authority of Congress to obtain information needed to conduct oversight of Treasury, the I.R.S. and the tax laws on behalf of the American people.” It asked a judge to order the defendants to comply.

[Read the committee’s legal complaint.]

But with the House and the executive branch locked in a broader struggle over access to information and witnesses related to the Trump administration, the stakes in the tax-return lawsuit may be higher than that particular issue. House Democrats are facing similar resistance on a broad range of investigations that include inquiries into Robert S. Mueller III’s investigation into Russian election interference, the addition of a citizenship question to the 2020 census, and the profits gleaned from Mr. Trump’s continuing business ventures.

In almost every instance, the Trump administration has argued that Congress’s power to gain access to those materials is inherently limited to information that would serve “legitimate” legislative purposes — defined by the executive branch to be limited to materials needed to help draft new laws and to exclude uncovering potential wrongdoing.

Congress retorts that its powers to compel information are far more sweeping than that and encompass oversight of important matters in general — and that its decisions about what information it wants to subpoena are not to be second-guessed by the White House.

The same dispute is at the center of a pair of lawsuits over subpoenas to accounting and banking firms for other financial records involving the Trump Organization. So far, two Federal District Court judges have swiftly rejected the argument offered by Mr. Trump’s private legal team that those requests did not carry legitimate legislative purposes. Mr. Trump has taken those losses to appeals courts.

A ruling by a federal court on the merits of the recurring dispute could shift the balance of power between the two branches and affect the authority of Congress to conduct oversight over not just Mr. Trump but presidents for years to come.

Depending on how quickly the courts choose to move on the litigation, though, that outcome could take months or years — a reality certain to frustrate liberals who are irate both at Mr. Trump’s vow to fight “all” congressional subpoenas and at the House’s thus far slow pace in bringing the case to court. Six months into Democratic control of the House, the tax returns lawsuit is its first attempt to enforce a subpoena in court.

Democrats have clamored for Mr. Trump’s returns since he burst onto the political stage, convinced they will show that he has distorted his assets and potentially defrauded the government. They have indicated they are preparing other lawsuits as well, including a potential suit to force Donald F. McGahn II, the former White House counsel, to testify despite White House claims that he and other top presidential advisers have “absolute immunity” from congressional subpoenas.

Mr. Trump was the first major presidential candidate in decades not to voluntarily release his tax returns. He has said that the returns were under audit by the I.R.S., but that does not actually preclude him from releasing them to the public.

The chairman of the Ways and Means Committee, Representative Richard E. Neal of Massachusetts, initially requested six years of Mr. Trump’s personal and business returns in early April using a provision of the federal tax code that grants the chairmen of Congress’s tax-writing committees the power to request tax information on any filer. The provision in question — Section 6103 — dates to the Teapot Dome scandal of the 1920s and says merely that the Treasury secretary “shall” furnish the requested material.

Mr. Neal, a Democrat, said he needed the returns, as well as audit information from the I.R.S., for a study of the efficacy of the agency’s mandatory presidential audit program that could potentially result in legislative changes.

Mr. Mnuchin rejected the request anyway, prompting Mr. Neal to shift tactics and counter in May by issuing subpoenas for the same material. That led to another rejection by Mr. Mnuchin. Both times, he said the requests lacked any “legitimate legislative purpose.”

The House suit asks a federal judge to enforce both approaches, validating the committee’s use of Section 6103 and Mr. Neal’s subpoenas. It says that “numerous investigative reports have revealed that President Trump, through the complex arrangements of his personal and business finances, has engaged in multiple aggressive tax strategies and decades-long tax avoidance schemes.”

The Justice Department’s Office of Legal Counsel last month endorsed Mr. Mnuchin’s rationale with a 33-page memo. The department pointed to it again on Tuesday, while otherwise declining to comment on the case. The Treasury Department did not respond to a request for comment.

In the memo, Steven A. Engel, the head of the office, cited comments by Mr. Neal and other Democrats that suggested, among other things, that they wanted to obtain and disclose Mr. Trump’s tax returns to “‘honor tradition,’ show ‘what the Russians have on Donald Trump,’ reveal a potential ‘Chinese connection,’ inform tax reform legislation, provide the ‘clearest picture of his financial health,’” and expose any hidden business dealings that may run afoul of the Constitution’s ban on receiving “emoluments” from foreign governments.

Against that backdrop. Mr. Engel dismissed Mr. Neal’s stated official rationale for seeking the returns — that Congress needs them for an investigation into how the I.R.S. audits and enforces federal tax laws against presidents — as “pretextual,” saying lawmakers instead wanted them for the political purpose of disclosing them. That purpose, he said, was not within Congress’s legitimate constitutional authorities.

The Trump administration and the president’s personal lawyers have raised the “legitimate purpose” argument repeatedly as they have sought to parry Democratic demands for information related to not just Mr. Trump’s finances but also issues ranging from the special counsel’s Trump-Russia investigation to the granting of security clearances to close Trump associates.

Last month, the House passed a resolution that cleared the way for committees to file lawsuits asking a court to order the executive branch to comply with their subpoenas without further action on the full House floor. The Ways and Means Committee lawsuit for Mr. Trump’s tax returns is the first exercise of that authority.

Even so, liberals have been frustrated with the pace of the case and have repeatedly targeted Mr. Neal in recent months, urging him to move faster. Stand Up America, a liberal advocacy group, said on Monday that it would be targeting constituents of Ways and Means Committee members by text and email to ask their representatives to press Mr. Neal to go to court.

For now, the dispute over the Mueller investigation materials, which centers on the House Judiciary and Intelligence Committees, has not developed into a lawsuit because Attorney General William P. Barr has started providing some access to underlying material from the special counsel investigation.

The House has also held off on voting to hold Mr. Barr or Mr. Mnuchin in contempt of Congress, a step that in the past has preceded asking a judge to issue an order requiring an executive branch official to comply with a subpoena.

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