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The Big Reveal Flying Under The Radar In The Lawsuit For Trump’s Tax Returns

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August 27, 2019 3:46 p.m.

There is a potentially groundbreaking piece of news from last week regarding President Trump’s tax returns that has been flying under the radar.

It has to do with the House Ways and Means Committee’s ongoing fight to force the Trump Administration to comply with a request for the President’s tax returns.

The fight is one of many surrounding Congress’s efforts to oversee the President and potentially hold him and others accountable; either by shedding light on unseen information or through other processes like impeachment (the nub of the McGahn lawsuit, which I wrote about here).

Ways and Means Chair Richard Neal (D-MA) sued in July to obtain Trump’s returns, asking a federal judge to force the executive branch to obey a provision in the tax code that mandates that the Treasury Secretary “furnish” the returns of any filer to the chairman of the House Ways and Means Committee upon request.

Knowing that the Trump administration would likely defy the request, Neal took a slow approach from the beginning, which focused on establishing a basis for his demand that would hold up in court. The language of the request itself was tailored to that basis. House attorneys rooted it in Congress’s need to oversee the Internal Revenue Service’s mandatory audit of the president – that is, to ensure that the IRS is impartially auditing President Trump’s tax returns.

There’s a history behind this.

One big reason why all presidential candidates since Gerald Ford and up to Trump have disclosed their returns is because of an incident involving Richard Nixon. In that episode, the Joint Committee on Taxation requested Nixon’s returns to verify, just as Neal has done under the same statute, that the IRS was not giving its boss any undue benefit.

The Committee’s investigation found that the IRS had, in fact, given Nixon a pass on his taxes in a scandal that wound up forcing him to pay more than $476,000 in back taxes and accumulated interest to the IRS.

So Neal has proceeded — albeit slowly — on a basis grounded in both law and history.

In the lawsuit to force Trump’s taxes to be released to his Committee, Neal is now pushing to speed up the case.

Last week, in a filing to that end, Neal disclosed that an unnamed federal employee had approached the committee in July alleging “inappropriate efforts to influence” the IRS’s mandatory audit of the president’s returns.

On Monday, in a separate filing where Neal was emphasizing the urgency of the tax return request, he returned to the same issue. The Massachusetts Democrat wrote that the tipster had set forth “credible allegations of ‘evidence of possible misconduct'” in the audit — an issue that “has been a core concern driving the Committee’s investigation.”

This is a big deal.

What this indicates is that the long-stated, driving motive of the committee’s inquiry may have been validated — that the committee has credible information about something improper in the IRS’s review of Trump’s tax returns.

And, beyond that, this would be a repeat of the scenario that started the tradition of presidential candidates releasing their tax returns in the first place. The Nixon IRS was found to be giving its boss undue favor in its audit, causing a drive for transparency in the elections that followed (but not accompanying legislation, as we all know too well).

Last week’s filing and Monday’s provide scant details on the nature of the tipoff.

Neal referred to it as a “whistleblower complaint” in the Monday court document, but we don’t know if the allegation of impropriety extends to the tax returns requested by Ways and Means (six years for Trump and eight for his businesses), or if it goes to the broader array of returns that Trump has claimed are under perpetual, eternal, audit.

Expect more in this space. We’ll be watching as it develops.

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