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Treasury must turn over Trump’s taxes to Congress, the Justice Dept. says.
Nicholas Fandos and
WASHINGTON — The Treasury Department must turn over six years of former President Donald J. Trump’s tax returns to House investigators, the Justice Department said in a legal opinion issued on Friday that most likely paves the way for their eventual release to Congress and potentially to the public.
Hours later, the Treasury told a federal judge that it planned to move ahead.
The 39-page opinion from the Justice Department’s Office of Legal Counsel dealt a sharp legal blow to a yearslong campaign by Mr. Trump to keep his tax information secret, reversing a Trump administration position that had shielded the documents from Congress.
Rejecting that view, the Biden administration opinion said that a request for the tax information first lodged in 2019 by the House Ways and Means Committee was legitimate and that the Treasury Department had no valid grounds to refuse it.
“The chairman of the House Ways and Means Committee has invoked sufficient reasons for requesting the former president’s tax information,” the opinion said. “Treasury must furnish the information to the committee.”
Democrats on Capitol Hill, who said they aim to examine the I.R.S.’s presidential audit program and Mr. Trump’s conflicts of interest, hailed the decision as a victory for congressional oversight powers and for national security. The House had sued to enforce the request after the Trump Treasury Department objected, and litigation continues.
“The American people deserve to know the facts of his troubling conflicts of interest and undermining of our security and democracy as president,” Speaker Nancy Pelosi said in a valedictory statement.
Yet even as the decision lowered a key barrier for Congress, it was unlikely to be the final word in the dispute. A highly litigious and determined protector of his financial records, Mr. Trump could seek an injunction in the coming days to try to stop the transfer, setting off a new round of legal wrangling that could take weeks or longer to resolve.
The Treasury Department notified a Federal District Court judge in Washington overseeing the dispute late Friday that it had reached an agreement with the House to hand over the documents, and both sides requested that the court give Mr. Trump until Tuesday to decide.
Even if handed over to Congress, Mr. Trump’s tax information may not become public immediately or at all. Rules governing the sharing of sensitive tax information with the Ways and Means Committee require the panel to vote on whether to share any of the information with the entire House or the public.
Democrats in charge of the committee did not disclose their investigative plans. They have previously indicated that they intend to study the effectiveness of the I.R.S. audit program, including in reviewing possible conflicts of interest for Mr. Trump.
“As I have maintained for years, the committee’s case is very strong and the law is on our side,” Representative Richard E. Neal, Democrat of Massachusetts and the chairman of the Ways and Means Committee, said in a brief statement. “I am glad that the Department of Justice agrees and that we can move forward.”
Mr. Trump’s personal lawyer Ronald P. Fischetti did not immediately return phone calls and emails seeking comment on Friday. Reached by phone, Phyllis A. Malgieri, Mr. Fischetti’s legal partner, said, “Knowing him for 32 years, the Italian in him, I’m sure he would have something to say” about the decision. Mr. Trump’s spokeswoman did not immediately return a request for comment.
Mr. Trump’s son Eric Trump and his allies in Congress recoiled at the prospect of his political adversaries gaining access to six years of his personal and business tax data, as well as related I.R.S. files. They accused Mr. Neal and House Democrats of lying about their real intentions, which they claimed were to embarrass and cudgel Mr. Trump.
“Just more harassment … the weaponization of politics and evilness of the far left is hard to comprehend,” Eric Trump, who helps run the family business, wrote on Twitter.
Republicans on Capitol Hill also quickly derided the Justice Department’s opinion as “politically motivated.” They warned that it could usher in a new era of political warfare in which politicians rifled through the tax information of their opponents.
“If politicians in Congress can demand, and ultimately make public, the president’s private tax returns, what stops them from doing the same to others they view as a political enemy?” said Representative Kevin Brady of Texas, the top Republican on the Ways and Means Committee.
The saga over Mr. Trump’s tax returns began more than six years ago, when the reality TV star who made his name in real estate became the first major presidential candidate in decades to refuse to voluntarily release his tax returns. Mr. Trump has long cited federal audits as justification, but his determination to keep them secret has fueled speculation about the health of his finances, whether he inflated his net worth and about possible financial entanglements that could have affected his decision-making as president.
Last year, The New York Times obtained and analyzed decades’ worth of tax information for Mr. Trump and his companies that showed he went years without paying federal income taxes and reported hundreds of millions of dollars in business losses. But the information sought by the House would most likely provide a more comprehensive window into his complex financial dealings.
Mr. Trump was already forced to turn over similar documents to the Manhattan district attorney’s office after the Supreme Court ruled last year that the powers of the presidency did not shelter him from turning them over. That investigation is ongoing, but it resulted in charges that the Trump Organization had helped its executives avoid taxes with fringe benefits hidden from authorities.
The case involving Congress has been more complicated. Mr. Neal originally requested the president’s tax information in 2019 under a little-used section of the federal tax code that allows Congress’s tax-writing committees to obtain any information they want for legislative purposes before later seeking the same information via subpoena.
Mr. Trump’s Treasury secretary at the time, Steven Mnuchin, rejected Mr. Neal’s attempts to gain the records after soliciting an opinion from the Justice Department’s Office of Legal Counsel, which provides legal advice for the executive branch. It ruled at the time that Democrats lacked a “legitimate legislative purpose,” were politically motivated and ought not get the information. Mr. Trump also sued in his personal capacity to block their release.
The House filed its own lawsuit to enforce its subpoena, and that dispute remained unsettled when President Biden took office. Mr. Neal updated his request last month, asking for tax records from 2015 to 2020. He said that they could reveal “hidden business entanglements raising tax law and other issues, including conflicts of interest,” or “foreign financial influences on former President Trump that could inform relevant congressional legislation.”
The decision on Friday by the Justice Department has the potential to short-circuit that legal fight. Writing for the Office of Legal Counsel, Dawn Johnsen, an acting assistant attorney general appointed by Mr. Biden, said her predecessors under Mr. Trump had overstepped their bounds by attempting to second-guess the House’s stated reasons for requesting the tax information.
Rather, she concluded that the department needed to show deference to Congress as a coequal branch of government. “Even if some individual members of Congress hope to see information from the former president’s tax returns disclosed on the public record merely ‘for the sake of exposure,’” she wrote, “that would not invalidate the legitimate objectives that the committee’s receipt of the information in question could serve.”
Still, legal experts said they would be surprised if Mr. Trump did not file an injunction to try to stop the release.
Mr. Trump may be aided by another Supreme Court decision last year related to Trump financial records sought by Congress, said Andy Grewal, a University of Iowa law professor. The justices sent the case back to lower courts, but not before putting in place tough new standards for Congress to meet when pursuing financial information about a president.
“The Biden D.O.J. says the relevance of that case must be limited because Trump has left office,” Mr. Grewal said. “I expect that Trump’s attorneys will dispute that position.”
Alan Rappeport and Katie Benner contributed reporting.
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