Guest poster Stu Bassin continues the discussion about possible ways that President Trump’s tax returns may see the light of day. In this post Stu suggests an approach that does not rely on the Congressional right within Section 6103(f) but instead looks to the possibility of serving a subpoena on advisors. Les
Minutes after the networks announced that the Democrats had retaken the House of Representatives, the commentators began discussing whether the Democrats in control of the House could obtain and release President Trump’s tax returns. Recognizing that the discussion focused upon one of my favorite obscure tangents of the tax law, I pulled out my tattered copy of the Internal Revenue Code and looked for an answer.
I have previously explained on Procedurally Taxing that the Section 6103 prohibition against disclosure of tax returns and return information provides only limited protection for the President’s tax returns. Section 6103 (b) establishes that the only protected returns and return information are those filed with the Service. Identical copies of the same documents which are not filed with the Service are not protected. Further, the statute establishes many detailed exceptions to the prohibition against disclosure.
Most of the commentary has focused upon the Section 6103(f) exception to the prohibition against disclosure which authorizes Congress to obtain returns and return information. Under the statute, the Service must provide the Chairman of the House Ways and Means Committee any returns and return information specifically requested in writing, presumably including the President’s returns and any related audit files. The statute provides that any information in those documents identifying the taxpayer (i.e., the President) can be provided to the committee only when it is sitting in closed executive session. Interestingly, the statute does not contain any prohibition against further disclosure of the documents to the remainder of the Congress or disclosure of the information by the Congress to the general public. And, as Professor Yin has reported,Congress has occasionally read the statute as allowing it to disclose returns and return information to the public. Less formally, the documents might “leak.”
Given the sensitivity of this information, one can imagine a scenario where the President (or his appointees at Treasury and the Service) refused to produce the requested documents, contending that Section 6103 protected the documents from disclosure. I see no merit in such an argument because the statute is clear on its face. Even if they objected, the Committee and the House would likely seek to enforce its request and find the administration in contempt. The dispute would likely find its way into the courts, years of political debate would ensue, and the courts would be asked to sort out the statutory construction issues (along with any related separation of powers issues).
I believe, however, that the House has another alternative which could fast-track resolution of the disclosure. It could serve document subpoenas upon the accounting firm which prepared the returns and the law or accounting firms representing the President in his audit disputes with the Service. The firms (and the President) could not assert Section 6103 to resist the subpoena because copies of the returns and audit documents in their possession are not protected by the statute. Likewise, any attorney-client privilege claim would be deemed waived because identical copies of the returns and audit documents had already been disclosed to the Service—an entity outside any privileged relationship. Further, an effort to quash the subpoena as politically motivated would almost surely fail because decades of summons enforcement case law establishes an almost insurmountable legal burden for taxpayers asserting such claims. The House could persuasively defend its inquiry as a proper investigation of potential conflicts of interest of an executive branch employee (i.e., the President).
Finally, even if the President attempted to intervene in the court to assert a separation of powers argument, this blogger’s inclination is that the President’s argument would fail. The documents subject to the subpoena have nothing to do with the President’s conduct of his official functions. Even if the documents dealt with Presidential conduct, the Supreme Court decision in United States v. Nixon 418 U.S. 663 (1974) would appear decisive. The Constitution simply does not protect documents unrelated to the conduct of official business and which are possessed by people outside the government, even if they refer to the conduct of the President.