Comm. on Ways & Means v. U.S. Dep't of the Treasury

• Decision Date: 14 December 2021
• Docket Number: Case No. 1:19-cv-01974 (TNM)
• Citation: 575 F.Supp.3d 53
• Parties: COMMITTEE ON WAYS AND MEANS, U.S. HOUSE OF REPRESENTATIVES, Plaintiff, v. U.S. DEPARTMENT OF THE TREASURY, et al., Defendants, Donald J. Trump, et al., Defendant-Intervenors.
• Court: U.S. District Court — District of Columbia

575 F.Supp.3d 53

COMMITTEE ON WAYS AND MEANS, U.S. HOUSE OF REPRESENTATIVES, Plaintiff,

v. U.S. DEPARTMENT OF THE TREASURY, et al., Defendants,Donald J. Trump, et al., Defendant-Intervenors.

Case No. 1:19-cv-01974 (TNM)

United States District Court, District of Columbia.

Signed December 14, 2021

David Mark Lehn, Seth Paul Waxman, Andres C. Salinas, Kelly P. Dunbar, Wilmer Cutler Pickering Hale and Dorr LLP, Megan Barbero, Sarah Edith Clouse, Todd Barry Tatelman, Douglas N. Letter, Stacie Marion Fahsel, Brooks McKinly Hanner, United States House of Representatives Office of General Counsel, Washington, DC, Katie Kelsh, Pro Hac Vice, Wilmer Cutler Pickering Hale and Dorr LLP, Boston, MA, for Plaintiff.

Cristen Cori Handley, Elizabeth J. Shapiro, James Mahoney Burnham, James J. Gilligan, Andrew Marshall Bernie, Julia Alexandra Heiman, Serena Maya Schulz Orloff, Steven A. Myers, United States Department of Justice, Civil Division, Washington, DC, for Defendants United States Department of the Treasury, Internal Revenue Service.

Cristen Cori Handley, James Mahoney Burnham, James J. Gilligan, Andrew Marshall Bernie, Julia Alexandra Heiman, Serena Maya Schulz Orloff, Steven A. Myers, United States Department of Justice, Civil Division, Washington, DC, for Defendant Charles P. Rettig.

James J. Gilligan, U.S. Department of Justice, Civil Division, Washington, DC, for Defendant Janet Yellen.

Patrick Neilson Strawbridge, Consovoy McCarthy PLLC, Boston, MA, William S. Consovoy, Cameron Thomas Norris, Consovoy McCarthy PLLC, Arlington, VA, for Defendant-Intervenors Donald J. Trump, Donald J. Trump Revocable Trust, DJT Holdings LLC, DJT Holdings Managing Member, LLC, DTTM Operations LLC, DTTM Operations Managing Member Corp., LFB Acquisition LLC, LFB Acquisition Member Corp., Lamington Farm Club, LLC.

MEMORANDUM OPINION

TREVOR N. McFADDEN, U.S.D.J.

Former President Donald J. Trump sues to keep the Treasury from giving his tax returns to the House Committee on Ways and Means, which can publish them. He marshals an array of evidence suggesting the Committee's purported interest in the Presidential Audit Program, an IRS policy that requires audits of the sitting President, is a subterfuge for improper motives—like exposing his returns. He also raises legal arguments against the statute on which the Committee relies.

But even if the former President is right on the facts, he is wrong on the law. A long line of Supreme Court cases requires great deference to facially valid congressional inquiries. Even the special solicitude accorded former Presidents does not alter the outcome. The Court will therefore dismiss this case.

I.

A.

Congress first levied an income tax in 1862, at the height of the Civil War. See Act of July 1, 1862, § 6, 12 Stat. 432, 434. Under that law, the public could access and inspect any tax return. See id. §§ 14-16, 18-19. Many criticized such liberal access, causing Congress to let the law lapse a decade later. See Office of Tax Policy, Dep't of Treasury, Report to the Congress on Scope and Use of Taxpayer Confidentiality and Disclosure Provisions 16 (2000) ("Tax Policy Report").¹ Congress returned to an income-tax model several years later but needed a constitutional amendment to enact it. See U.S. Const. amend. XVI. The first post-Amendment tax law denied public inspection of tax returns, providing instead that returns submitted to the IRS would be "open to inspection only upon the order of the President, under rules and regulations to be prescribed by the Secretary of the Treasury." Tariff Act of 1913, Pub. L. No. 63-16, § II.G(d), 38 Stat. 114, 177.

In the Revenue Act of 1926, Congress first allowed its committees to access tax returns. See Pub. L. No. 69-20, § 257(b)(1), 44 Stat. 9, 51. The relevant provision directed that the Secretary of the Treasury "shall furnish" the House Ways and Means Committee and the Senate Finance Committee with "any data of any character contained in or shown by any return." Id. The committees then could submit that information to the full Senate or House. Id. § 257(b)(3).

These provisions remained largely unchanged until the mid-1970s, when the Nixon Administration returned taxpayer privacy to the fore. In 1973, President Nixon issued two executive orders authorizing the Department of Agriculture to inspect "for statistical purposes" the tax returns of all farmers. See Exec. Order 11697, 38 Fed. Reg. 1723 (Jan. 17, 1973) ; Exec. Order 11709, 38 Fed. Reg. 8131, 38 Fed. Reg. 8131 (Mar. 27, 1973). Congress objected, and the President revoked the orders. See Exec. Order 11733, 39 Fed. Reg. 10,881 (Mar. 22, 1974).

More concerning to Congress, however, was that members of the Nixon White House obtained IRS records, including tax returns, for many of Nixon's political opponents. See Tax Policy Report at 21. The Senate Watergate Committee also learned that the White House had often requested the tax returns and audit information of certain taxpayers. See id. And the House Judiciary Committee heard evidence that President Nixon himself had improperly accessed IRS tax records. See id. These revelations worried the House committee enough that it proposed an article of impeachment alleging that Nixon had violated the constitutional rights of taxpayers. See Report on the Impeachment of Richard M. Nixon , H.R. Rep. No. 93-1305, at 3 (1974).

Congress addressed these concerns in the Tax Reform Act of 1976. See Pub. L. No. 94-455, 90 Stat. 1520. That Act established a comprehensive statutory scheme, codified at 26 U.S.C. § 6103, for disclosing tax records. In general, tax returns and return information "shall be confidential" unless they fall into one of thirteen narrow exceptions. 26 U.S.C. § 6103(a), (c) - (o). Indeed, unauthorized disclosure of tax returns is a felony. See 26 U.S.C. § 7213.

Of relevance here, § 6103(f) allows congressional committees—in language like the original 1926 provision—to request tax returns from the Treasury. Specifically, "[u]pon written request from the chairman" of the Ways and Means Committee or the Senate Finance Committee, the Treasury "shall furnish such committee with any return or return information specified in such request." 26 U.S.C. § 6103(f)(1). For any information associated with a particular taxpayer, the Committee must sit in closed executive session to receive it. See id.

Congressional requests under § 6103(f) rarely reach the public eye. Committees usually request returns for statistical data purposes. See Congressional Committee's Request for the President's Tax Returns Under 26 U.S.C. § 6103(f), 2019 WL 2563046 at *4 (O.L.C. Jun. 13, 2019). The statute allows three committees, however, to "submit[ ]" the received information to the full House or Senate, placing it in the congressional record. See 26 U.S.C. § 6103(f)(4)(A). But committees hardly ever do so. In fact, a committee has published tax information only once under the current iteration of § 6103(f) —in 2014 after an investigation into the IRS's discriminatory treatment of conservative organizations. See generally George Yin, Preventing Congressional Violations of Taxpayer Privacy , 69 Tax Lawyer 103, 108–113 (2015). No party has identified a previous request under § 6103(f) for the tax information of a former or sitting President. We are in uncharted territory.

With this historical and statutory background in mind, the Court turns to the congressional request here.

B.

As Donald Trump campaigned for the 2016 Republican presidential nomination, he refused to publicly release his tax returns. See Amended Answer and Counterclaims/Crossclaims (ACCC) ¶ 6, ECF No. 129. That refusal led many—including his eventual opponent, Hilary Clinton, and then-Vice President Joe Biden—to demand that he release his returns. See id. ¶¶ 13–15. He did not oblige. Trump won the nomination and the election without ever releasing his tax returns. Republicans also won a majority in both the House and the Senate. See id. ¶ 20.

Representative Richard Neal was the Committee's Ranking Member at the time. See id. Within months of President Trump's inauguration, he and other Democratic lawmakers suggested that the Committee should invoke § 6103(f) to request President Trump's tax returns. Ninety-two House Democrats, including Neal, sponsored a resolution to require the Treasury to provide Trump's returns to the House. See H. Res. 186, 115th Congress; ACCC ¶ 25. The Committee's Republican majority rejected it. See ACCC ¶ 27. Despite this setback, congressional Democrats tried to obtain President Trump's tax returns "through letters, resolutions, draft legislation, proposed amendments, and more" throughout the 115^th Congress. Id. ¶ 30. They were unsuccessful.

Voters in the 2018 elections gave Democrats control of the House and thus of the Committee. See id. ¶ 74. Ranking Member Neal became chairman and announced that the Committee "would pursue the public release of President Trump's tax returns." Id. ¶¶ 74, 83.

In April 2019, Chairman Neal officially requested the tax returns through a two-page letter to the IRS. See id. ¶ 123; see also Counterdefendant's Motion to Dismiss, Ex. A (2019 Request), ECF No. 133-1. That letter said the Committee was considering "the extent to which the IRS audits and enforces the Federal tax laws against a President." 2019 Request at 1.² Chairman Neal noted that IRS policy—called the Presidential Audit Program (Program)—required a mandatory examination of the President's tax returns. See id. The Chairman then wrote that the Committee needed "to determine the scope of any such examination" and whether it reviewed all "underlying business activities required to be reported." Id.

To that end, Chairman Neal requested under § 6103(f) the tax returns from 2013–2018 for President Trump and for eight business organizations controlled by him. See id. at 1–2. Chairman Neal also requested any administrative files for those returns, as well as a statement by the IRS on whether it had audited each taxpayer and, if so,...