Supreme Court allows House Democrats to collect tax returns from Trump

WASHINGTON — The Supreme Court on Tuesday cleared the way for a House committee to obtain former President Donald J. Trump’s tax returns, denying its request to prevent her release after a year-long battle to keep her.

The court’s brief order, which was unsigned and noted no dissenting opinions, was another crucial defeat for Mr. Trump, delivered by a court that had moved to the right by appointing three judges. The decision means the Treasury Department will likely soon hand over six years of its tax returns to the House of Representatives, which has been seeking its financial records since 2019.

Massachusetts Rep. Richard E. Neal, who requested the files as Chair of the Ways and Means Committee, said in a statement that his panel “will now exercise the oversight that we have sought for the past three and a half years.”

But Mr Neal did not say whether the committee would release the statements. A Ways and Means Committee staffer, who spoke on condition of anonymity to discuss a sensitive matter, said no decision would be made until lawmakers received the files.

Lawyers for Mr Trump, who announced last week that he would run for president again, did not immediately respond to a request for comment.

Mr. Trump has used the slow pace of litigation to tick off the clock on various oversight and investigative efforts. His blocking and legal challenges managed to keep the House from receiving its tax returns for nearly four years, but that strategy appears to have fallen just short. The House of Representatives would almost certainly have dropped Mr Trump’s tax return motion in January if Republicans take control of the chamber.

His lawyers had asked the judges to extend the stay of a lower court that had prevented the Treasury Department from providing the filing to give them more time to file an appeal to the Supreme Court. Douglas N. Letter, the chief counsel for the House of Representatives, had urged the Supreme Court not to intervene and pointed to the coming of a new Congress. Any further delay “would leave little or no time for the committee and Congress as a whole to complete their legislative work,” he wrote in a briefing this month.

Despite years of maintaining a super-conservative majority on the court, it has repeatedly ruled against him in challenges he has brought before it.

In recent years, the court has denied its efforts to challenge aspects of the 2020 election; preventing prosecutors in New York from obtaining some of his financial records; and a so-called special master’s review of 100 sensitive government files seized at his home in August.

The Supreme Court’s decision landed as an Atlanta appeals court heard a broader challenge from the Justice Department to the special home exam. All three judges, including two of his appointments, seemed inclined to rule against him.

The dispute over whether the House of Representatives can receive Mr Trump’s tax returns dates back to his 2016 refusal to release them, breaking with modern precedents set by presidential candidates and sitting presidents.

In 2019, after Democrats took over the House of Representatives, they began attempting oversight efforts, including Mr Trump’s hidden financial deals. They secured testimony from Mr. Trump’s former attorney, Michael D. Cohen, that Mr. Trump had boasted about adding value to assets when it served him, such as when applying for credit, and undervalued them when it helped to lower his taxes.

State authorities have also investigated such allegations. The Trump Organization is on trial in New York, where prosecutors have accused it of tax fraud and other crimes. The New York State Attorney General has sued Mr Trump and three of his children, accusing them of lying to lenders and insurers by fraudulently overstating his wealth.

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The New York Times has also examined Mr Trump’s taxes, including obtaining tax return data in 2020 spanning more than two decades. He paid no federal income taxes in 11 of 18 years The Times examined and reduced his tax bill with questionable measures, including a $72.9 million tax refund that was the subject of an Internal Revenue Service audit as of 2020.

John Koskinen, a former IRS commissioner during the Obama and Trump administrations, said Tuesday that Mr Neal must decide what to do with the returns, including releasing a summary or the full set of documents. But he suggested that given what was already known about Mr. Trump’s finances, their release might offer some surprises.

“I’m not clear what you’re going to learn that you don’t already know by looking at these returns,” Mr Koskinen said in an interview.

In early 2019, Mr. Neal asked the Treasury Department to provide Mr. Trump’s tax returns under a law that gives the Ways and Means Committee the power to see all taxpayers’ documents. But the Trump administration refused to let the department turn over the records.

While Mr Neal said the committee is considering whether changes are needed to an IRS program that scrutinizes presidents, Trump supporters claim it is a smokescreen for a politically motivated fishing expedition and that Congress lacks a legitimate legislative purpose in seeking the records.

In July 2019, the House filed a lawsuit to enforce its request. Mr Trump’s legal team vowed to fight the effort “tooth and nails”.

The case was assigned to a Trump-appointed judge, Trevor N. McFadden, who would ultimately rule that the law sided with the House of Representatives, but nonetheless stalled to make a decision.

The case was pending before him in 2021 when the Biden administration took office and the current Congress was in session. Mr. Neal renewed his request, and the Justice Department issued a memorandum stating that the law, on the face of it, gave the committee a statutory right of restitution.

Last December, some two and a half years after the House of Representatives filed the lawsuit, Judge McFadden finally addressed the case, ruling that the committee did indeed have a statutory right to the records under “a long line of Supreme Court cases” that the Courts are demanding waivers of congressional requests that were valid on the face of it.

But Judge McFadden also stated that he thought it unwise for the committee to abuse its powers to publish Mr. Trump’s tax returns in the Congressional Record, as it is permitted under the same law that authorizes Mr. Neal to request them. The case took the country into “uncharted territory,” he warned.

“Anyone can see that the release of a political rival’s confidential tax information is the kind of move that will plague the inventor again,” the judge wrote. But he added: “It may not be right or wise to publish the results, but it is the chair’s right to do so.”

Still, Judge McFadden prevented the Treasury Department from releasing the records until the DC Circuit Court of Appeals reviewed his decision. In August, a three-person appeals court upheld Judge McFadden’s decision.

Mr Trump then asked the full Court of Appeals to reconsider the matter. After denying that request last month, Mr Trump requested that the Supreme Court intervene only for Chief Justice John G. Roberts Jr. to extend the suspension temporarily.

Rep. Bill Pascrell, Jr., a New Jersey Democrat who was involved in demanding Mr. Trump’s tax returns, praised the decision and said a legal “charade” that wasted taxpayers’ money is over.

“It has been 1,329 days since our committee requested Donald Trump’s tax returns – almost the length of the American Civil War,” he said in a statement. “And for 1,329 days, our statutory motion has been delayed, obscured and blocked by Donald Trump and his aides in the government and courts.”

Alan Rapport contributed reporting.