US Markets
Tuesday, August 9th, 2022 12:27 pm EDT
Former President Donald Trump‘s federal income tax returns and those of Trump business entities must be turned over to the House Ways and Means Committee, a federal appeals court panel said in a ruling Tuesday.
The 3-0 decision is the latest legal blow to Trump, who has repeatedly lost efforts in federal and state courts to shield his closely guarded tax returns and business-related documents from various investigations. Trump has argued that all of those probes are politically motivated.
The ruling by the U.S. Court of Appeals for the District of Columbia Circuit was announced a day after FBI agents searched Trump’s residence at his Mar-a-Lago Club in Palm Beach, Florida, as part of an investigation into the removal of sensitive documents from the White House when he left office in 2021.
The appeals panel said the House committee, which has sought Trump’s tax records for years as part of an inquiry into how the Internal Revenue Services audits presidential income tax returns, had the right under the law to obtain them from the U.S. Treasury Department.
The decision upholds a ruling issued in December dismissing Trump’s claims by Judge Trevor McFadden in federal court in Washington.
Tuesday’s ruling applies to Trump’s returns for the tax years 2015 through 2020. But the appeals court said that its decision mandating the disclosure of the returns is on hold until seven days after the disposition of any potential petition by Trump seeking to overturn the ruling.
Trump is likely to ask the full lineup of judges on the D.C. Circuit Court of Appeals to re-hear the case or to directly petition the U.S. Supreme Court to hear an appeal of the ruling.
The appeals panel noted that while tax returns are generally confidential under federal law, one exception is when the chairman of the Ways and Means Committee requests such returns in writing from the secretary of the Treasury Department.
“The Chairman has identified a legitimate legislative purpose that it requires information to accomplish,” Judge David Sentelle wrote in the panel’s opinion. “At this stage, it is not our place to delve deeper than this.”
“The mere fact that individual members of Congress may have political motivations as well as legislative ones is of no moment,” wrote Sentelle, who was appointed to his seat by President Ronald Reagan.
“Indeed, it is likely rare that an individual member of Congress would work for a legislative purpose without considering the political implications.”
As a candidate for the White House, and then as president, Trump broke decades of practice in refusing to publicly release his tax returns.
Ways and Means Committee Chairman Rep. Richard Neal, D-Mass., in a statement reacting to Tuesday’s ruling said, “With great patience, we followed the judicial process, and yet again, our position has been affirmed by the Courts. “
“‘I’m pleased that this long-anticipated opinion makes clear the law is on our side. When we receive the returns, we will begin our oversight of the IRS’s mandatory presidential audit program,” Neal said.
Trump’s spokeswoman and William Consovoy, an attorney for Trump, did not immediately respond to requests for comment.
Neal in April 2019 first asked the Treasury Department for Trump’s federal income tax returns and those of the Donald J. Trump Revocable Trust and seven limited liability companies, one of which does business as Trump National Golf Club in Bedminster, New Jersey. Trump was president at the time of the request.
In a letter to Treasury, Neal wrote that his committee was “considering legislative proposals and conducting oversight related to our Federal tax laws, including, but not limited to, the extent to which the IRS audits and enforces the Federal tax laws against a President.”
The IRS is mandated by law to audit the annual tax returns of sitting presidents.
A month after Neal’s letter, the Treasury Department, at the time led by Trump appointee Steven Mnuchin, said it would not comply with Neal’s request, arguing that the committee did not have a legitimate legislative purpose.
The Ways and Means Committee then sued the IRS, Treasury, and Mnuchin, seeking to force them to turn over the tax returns.
As the case was pending, President Joe Biden defeated Trump in his bid for re-election. Neal in June 2021 renewed his request to Treasury for the tax returns, with additional detail about why the committee wanted them. Neal said that in addition to reviewing how tax laws are applies to a sitting president, the committee also was interested in reviewing possible conflicts of interest by a president.
In July 2021, Treasury’s Office of Counsel, which originally had supported the denial of the records’ release, issued an opinion saying Neal’s second request was valid, and that the department had no choice but to comply with it.
After Treasury said it would follow the opinion, Trump filed counterclaims against the department and the House committee, seeking to block the release of the returns.
Trump’s lawyers argued that the committee’s request lacked a legitimate purpose and violated the constitutional separation of powers between the executive and legislative branches of government.
In the ruling Tuesday, the appeals panel said that McFadden, the federal judge who heard those arguments, properly granted a motion to dismiss Trump’s lawsuit after finding that Neal’s 2021 request “was supported by the valid legislative purpose of the Committee’s study of the Presidential Audit Program.” The judge also found that the request did not violate the separation of powers, nor was it “facially unconstitutional.”
And McFadden properly ruled that Neal’s request was not a form of retaliation against Trump, the panel concluded.
“The 2021 Request seeks information that may inform the United States House of Representatives Committee on Ways and Means as to the efficacy of the Presidential Audit Program, and therefore, was made in furtherance of a subject upon which legislation could be had,” Sentelle wrote in the opinion.
“Further, the Request did not violate separation of powers principles under any of the potentially applicable tests primarily because the burden on the Executive Branch and the Trump Parties is relatively minor. Finally,§ 6103(f)(1) is not facially unconstitutional because there are many circumstances under which it can be validly applied, and Treasury’s decision to comply with the Request did not violate the Trump Parties’ First Amendment rights. We affirm.”
One of the three judges on the pane, Karen LeCraft Henderson, concurred with much of the opinion, but separately wrote, “I conclude that the burdens borne by the Executive Branch are more severe
and warrant much closer scrutiny than my colleagues have given them.”
And, Henderson wrote, “The Congress’s potential and incentive to threaten a sitting President with a post-Presidency … request [for tax returns] in order to influence the President while in office should not be dismissed so quickly.”
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