Biden cautious in making Trump tax returns decision

The Biden administration must decide how to handle House Democrats’ request for former President Trump’s tax returns.

A decision on whether to comply with the House Ways and Means Committee’s request could come as soon as Wednesday, when a status report is due in the committee’s lawsuit. It is possible that the administration could also say it still needs more time on the decision.

President Biden called on Trump to release his tax returns during the 2020 presidential race, and many legal experts think the law is on House Democrats’ side. But the administration is still working to fill key positions and thus far has been cautious in weighing in on the topic.

“I suspect they’re in no particular hurry to settle this question,” said Joseph Thorndike, a tax historian with Tax Analysts.

Thorndike said he thinks the substance of House Democrats’ request makes sense. However, he also said that the Biden administration will not want to look like “they’re too politicized in this.”

Andy Grewal, a University of Iowa law professor, said he’s not sure the Biden administration will want to take an action that acknowledges that Congress can receive documents from the administration on demand.

“I think it’s a delicate situation for Biden because acknowledging Congress’s authority here weakens the power of the presidency,” he said. Grewal suggested that the White House could try to reach a compromise with Congress.

House Ways and Means Committee Chairman Richard Neal (D-Mass.) requested six years of Trump’s personal and business tax returns, as well as information about any related audits, from the IRS in 2019.

Neal cited a provision in the federal tax code that states that the Treasury secretary “shall furnish” tax returns requested by the chairs of Congress’s tax committees. If the Ways and Means Committee receives the documents, it would examine them in a closed session. The committee could then vote to submit a report to the full House that could make parts or all of Trump’s tax returns public.

Neal has said that the Ways and Means Committee wants the returns because it is conducting oversight and considering legislation related to how the IRS enforces tax laws against a president.

The Trump administration, led by then-Treasury Secretary Steven Mnuchin, rejected Neal’s request, arguing that it lacked a legitimate legislative purpose. The Ways and Means Committee subsequently filed a lawsuit against the Treasury and the IRS, which has yet to be resolved. Trump is participating in the case in his personal capacity.

With Biden in the White House now, there is the potential for the U.S. government to change its position in the case. In a court filing last month, Justice Department lawyers said that the administration needed more time to determine its position, because the transition at Justice and Treasury was still ongoing.

Trump’s personal lawyers say they want an opportunity to have their claims litigated before any documents are turned over to Congress. Judge Trevor McFadden, a judge in federal district court in Washington, D.C., appointed by Trump, ordered the Biden administration to give Trump’s personal lawyers 72 hours’ notice before providing any of the former president’s tax returns to the Ways and Means Committee. That order lasts until Wednesday, when the parties in the case have to submit a status report to McFadden.

Tax and legal experts following the case said it’s likely that the administration will say in Wednesday’s court filing that it has still not made a decision about how it wants to address House Democrats’ request. They noted that Biden still does not have many key members of his team at Treasury and the Justice Department confirmed, including attorney general nominee Merrick Garland.

“No one in an acting position is going to want to take on this type of decision,” said Philip Hackney, a University of Pittsburgh law professor and former IRS attorney.

The Department of Justice, through a spokesperson, declined to comment on what it plans to say in the status report.

When Treasury Secretary Janet Yellen was asked last week about whether she thinks the department is required to comply with requests for presidential tax returns, she replied that she “will seek legal advice on this and follow the law.”

Many experts think that the law is clear that the Treasury Department has to comply with Neal’s request.

Hackney said he “can’t think of any other move” but for the Treasury to eventually decide to provide House Democrats with Trump’s tax returns.

Rep. Bill Pascrell (D-N.J.), a senior Ways and Means Committee member who has been a leading advocate for the panel obtaining the documents, said he thinks the administration will provide Congress with Trump’s tax returns after Garland is confirmed.

“Serving in the U.S. Capitol for 36 years, I know President Biden too respects the preeminent oversight authority of the Article I branch,” Pascrell said in a statement to The Hill. “Once Attorney General Garland is confirmed by the Senate and ensconced at Main Justice, I am confident he will work expeditiously with Secretary Yellen’s team to fulfill the Ways and Means  Committee’s legal request.”

But Biden has sought to avoid talking about Trump, and matters relating to the former president are politically sensitive.

Wednesday’s court filing in the Ways and Means Committee’s lawsuit will come after the Supreme Court last week in a separate case declined to shield Trump’s tax returns from the office of Manhattan District Attorney Cy Vance (D). The district attorney’s office subsequently obtained the documents from Trump’s accounting firm, Mazars USA. It’s unclear if and when any of the documents the prosecutors received will become public because of grand jury secrecy rules.

White House press secretary Jen Psaki last week declined to comment on the ruling in the Vance case but noted that Biden has made his tax returns public.

“The president did make clear on the campaign trail that the American people expect and deserve transparency from their president,” she said. 

Biden has released many years of his tax returns and urged Trump to do the same during his campaign. Those calls escalated in the final weeks before the 2020 election after The New York Times reported, based on tax information it had obtained, that Trump paid little to no taxes in many recent years.

“What are you hiding? Why are you unwilling?” Biden asked Trump during a presidential debate in October.

Trump was the first president in decades to not make any of his tax returns public. He has cited an IRS audit, though the IRS has said that nothing prevents people from disclosing their own tax information.

In addition to their efforts to obtain Trump’s tax returns, congressional Democrats also are pursuing legislation to require presidents to release their tax returns.

The House is expected this week to pass a wide-ranging voting rights and ethics bill, H.R. 1, that would require presidents, vice presidents and major-party nominees for those offices to disclose their 10 most recent years of tax returns to the Federal Election Commission, which would make them publicly available.

“By requiring presidential and vice-presidential candidates to release 10 years’ worth of tax returns — as most have done with one singular, stark exception — it will provide voters with information critical to ensuring that those seeking our highest offices are free from conflicts of interest,” House Majority Leader Steny Hoyer (D-Md.) said in a floor speech Tuesday.

The bill is not expected to pass in the Senate, where it would need to get support from some Republicans to advance.

Thorndike said the provision in H.R. 1 is a good way to address the presidential tax return disclosure issue.

“If you want presidents and presidential candidates to release their tax returns, we should make it a law,” he said.