Does Congress have unlimited authority to look at the tax returns of President Trump — or anyone else? The White House and House Democrats are on a collision course to find out. This may not end up being the most existential of the wars between Trump and his opponents in Congress, but it could be the most precedential for all Americans.
This battle has been in the making for some time, both legally and politically. As early as the Republican primary debates for the 2016 nomination, Trump agreed to publicly release his tax returns, a tradition for presidential candidates that goes back to Richard Nixon. Eventually Trump reneged on his promise and declared that continuing IRS audits made it impossible to release the returns. Democrats (and some Republicans) pilloried Trump for the break with tradition, but in the end it didn't matter: Trump won the election without releasing his returns and has steadfastly refused to release them since, making them something of a Holy Grail for his opponents.
On Tuesday, The New York Times reported that it had obtained tax information demonstrating massive losses by Trump's businesses between 1985 and 1994. However, this is unlikely to appease the Democrats. When they took control of the House in last year's midterms, they promised to demand access to Trump's returns to uncover whatever else the president might be hiding. House Ways and Means Committee chair Rep. Richard Neal (D-Mass.) has what would appear to be plenary authority to personally review the tax returns of any American, thanks to 26 USC 6103(f), a law regarding "confidentiality and disclosure of returns and return information." Neal demanded the Treasury Department produce Trump's tax returns, and set multiple deadlines.
On Monday, Treasury Secretary Steven Mnuchin issued a firm refusal, one that will require the courts to parse out both the meaning of the law in question, and precedents regarding the extent to which Congress can access private data. "In reliance on the advice of the Department of Justice," Mnuchin wrote to Neal, "I have determined that the committee's request lacks a legitimate legislative purpose."
Without such a legislative purpose, Mnuchin warned, the IRS would not provide the returns — even though the language Neal cites in 26 USC 6103(f) unequivocally says the Treasury Department is required to supply any such returns to the committee chair if they are requested. The Department of Justice maintained that Neal's authority in the statute "is bounded by Congress' authority under the Constitution," and that Supreme Court precedent required Congress to demonstrate a specific and legitimate "legislative purpose."
Curiously, the term "legislative purpose" appears nowhere in the relevant law. In fact, the same law allows the president the authority to review the returns of White House employees without their express approval. So where did Mnuchin and the Department of Justice come up with this argument?
It originates in two other scandals — both of which involved government officials intruding on Americans' privacy, although in different ways.
The law emerged from what could easily be called the Watergate of the 1920s: the Teapot Dome scandal. The treasury secretary of that time, Andrew Mellon, got into a political battle with fellow Republican Sen. James Couzens over tax-reform plans in response to the scandal. Mellon allegedly used his position to access Couzens' tax returns and exploited the data to paint him as a hypocrite. In its attempt to investigate Mellon's actions, Congress discovered that it had no similar mechanism to access tax returns, prompting an early form of the statute we have today as a means of balancing power between the two branches — and presumably discouraging any further political exploitation of tax returns.
If that action speaks against wanton access to tax returns of political foes, then an important Supreme Court decision in another context emphasizes the point. In a letter last month to the Treasury Department's general counsel, Trump's personal attorney, William Consovoy, pointed to the Supreme Court's decision in Watkins v. US, a 1957 case brought against the House Un-American Activities Committee during the "Red Scare." Labor organizer John Watkins was cited for contempt of Congress for refusing to provide information not pertinent to a legitimate investigative purpose. Watkins sued and eventually the Supreme Court ruled 6-1 in his favor, a ruling hailed at the time as a major limitation on Congress' reckless use of its investigative authority.
Former Chief Justice Earl Warren's opinion from that time speaks to some of the issues in contention in the current fight. "Congress has no general authority to expose the private affairs of individuals," Warren concluded, "without justification in terms of the functions of Congress." He specifically cited a need to demonstrate a "legislative purpose," noting that "[i]t cannot simply be assumed that every congressional investigation is justified by a public need that overbalances any private rights affected."
The same statute cited by Neal makes clear the private nature of tax returns. No one other than the taxpayer himself or his duly designated agents, custodians, or heirs can disclose that information unless required for specific legal investigations or to review specific issues of administration by the IRS. Even in the law's whistleblower section, the release of taxpayer information to anyone else has to relate to "misconduct, maladministration, or taxpayer abuse" by the government, not the taxpayer himself.
Watkins makes it clear that one party winning a majority in either chamber of Congress does not authorize fishing expeditions through the private affairs of any American, whether president or pipefitter. Without an explicit and clear predicate for Congress to review Trump's tax returns, the courts may well side with Warren in this instance. Otherwise, both parties could misuse confidential tax information to declare open season on their political opponents, the allies of their political opponents, their critics, and so on.
When politicians voluntarily release their tax returns, this has value in transparency and character assessment. And I'm not saying voters can't assume the worst about political candidates who refuse to follow this tradition. Voters have the authority to make this criteria as important or unimportant as they see fit, and punish those who fail to meet those standards at the ballot box. We do not need to make the good compulsory, however, nor allow the same politicians the authority to access private information simply because they won an election, regardless of which branch of government they serve. For all of our sakes, we should leave it at that.