Why the IRS is legally required to give Congress Trump’s tax returns – but probably won’t

Is the IRS required to hand over the president’s tax returns if Congress asks?

According to Treasury Secretary Steven Mnuchin, the answer is a resounding no – at least when it comes to the request submitted by Democratic Congressman Richard Neal on April 3. Mnuchin said it “lacks a legitimate purpose.”

Although many Americans have been interested in reviewing the tax returns of President Donald Trump since the 2016 campaign, this was the first time newly empowered House Democrats had formally sought those records. The president has claimed he can’t release them because they are being audited.

As a tax professor and former attorney at the Internal Revenue Service, I think the law is clear that the IRS must turn over Trump’s returns to the House Ways and Means Committee, which Neal chairs.

But there’s the law, and there’s political reality – and I believe it’s unlikely he will ever actually obtain the returns.

Congress and the IRS

The current battle over Trump’s tax returns began with the letter Neal wrote to the commissioner of the IRS requesting the president’s filings for the years 2013 to 2018.

Neal argued that his committee needed the returns to assess whether the IRS was properly auditing presidential returns according to agency policy.

While tax law requires the IRS to keep the returns of individual Americans private, there are exceptions. Most are common sense, such as when people are under investigation for tax fraud, a state has a right to access returns.

The Senate Finance and the House Ways and Means Committees also have the right to request “any return or return information.” The only caveat is that if the request involves a specific identifiable individual, the committee must view the return privately.

In the past, Congress has sought individual returns. Most recently, in 2014, Republicans accessed the returns of more than a dozen tax-exempt organizations as part of an investigation of whether the IRS was discriminating against conservative groups. They even released the returns publicly, which many criticized as a violation of their privacy.

Mnuchin believes Neal doesn’t have a ‘legitimate purpose’ for demanding Trump’s tax records. Reuters/James Lawler Duggan

Are there any limits?

Although Trump’s lawyers and some scholars argue that Congress needs a legislative purpose to request these returns, as others have noted, the law actually requires no such thing.

And in any case, the purpose cited by Neal constitutes a legitimate legislative interest since information-gathering of this sort is necessary to writing laws.

Nonetheless, there are some limits to Congress’ power to request tax returns. For starters, it must fit within the committee’s jurisdiction, which is likely why Neal chose to express the committee’s legislative interest so narrowly.