WaPo Reports: Draft IRS Memo Says Tax Records Must be Released to Congressional Committees

Steven D. Schwinn, John Marshall Law School

The Washington Post today reported on a confidential draft memo apparently prepared by the IRS that concludes that the IRS must turn over tax returns to certain congressional committees except if the President asserts executive privilege.

The memo doesn't mention the current spat over President Trump's tax returns between House Ways and Means Committee Chair Richard Neal (who requested the returns) and Treasury Secretary Steven Mnuchin (who refused to release them). But the memo makes clear: Apparently even the IRS thinks that it must turn over President Trump's taxes.

President Trump has not asserted executive privilege over the returns--and he probably couldn't (it doesn't seem to apply). Instead, Mnuchin (rather boldly) wrote to Neal that Neal's request was invalid, and that the IRS wouldn't comply with it, because it lacks a "legitimate legislative purpose."

The confidential draft memo reads:

The IRS discloses returns and return information when authorized or required by section 6103. Congress in its oversight and investigative role could seek to compel by subpoena a refusal to disclose returns or return information requested. The only basis for the agency's refusal to comply with a committee's subpoena would be the invocation of the doctrine of executive privilege.

Further on, the memo notes (correctly) that the statute requiring disclosure upon request "is mandatory, requiring the Secretary to disclose returns and return information requested by the tax writing Chairs." "On its face, the statute does not allow the Secretary to exercise discretion to disclosing the information provided the statutory conditions are met."

The memo also notes that the statute doesn't require the relevant committee chairs to state a reason for their request. "Unlike section 6103(f)(3), subsections (f)(1) and (f)(2) do not require the Ways and Means and Finance Chair of JCT Chief of Staff to include a reason or purpose for the request."

The memo almost certainly doesn't change things between Mnuchin and Neal, however. That's because the memo is only a draft, not (necessarily) the agency's final legal reasoning. It's also because Mnuchin claimed a different reason for not complying with Neal's request: the Committee lacks a "legitimate legislative purpose." So even if the memo reflects actual, current IRS thinking on the agency's obligation to turn over the returns, Congress might still be limited by its oversight and investigative authority--to things that have a "legitimate legislative purpose."

But as we've noted, that a bold and inventive claim with respect to President Trump's tax returns. The Court has given Congress wide berth in exercising its oversight authority. Unless things change at the Court, Neal's request for President Trump's tax returns falls well within it.