Trump tax fight faces new urgency after impeachment acquittal

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President Donald Trump has put impeachment behind him, but he’s got another battle ahead with Democrats that’s been brewing for almost a year: access to his tax returns.

The fight now is playing out in the courts, including a Supreme Court argument set for March 31. House Democrats contend they need to pry free Trump’s tax records as part of their oversight duties to determine whether he’s broken any tax laws, has financial ties to foreign governments or is being properly audited by the Internal Revenue Service.

There’s no guarantee they can get the documents they seek before November’s election — much less whether the tax filings and other financial records might show anything politically damaging to the president.

“It’s important for us to press where necessary for as hard as possible to get everything ASAP,” said Representative Raja Krishnamoorthi, an Illinois Democrat who is a member of both the House Oversight and Intelligence committees. “I think at this point I would not be surprised if we started for expedited relief on a lot of these matters. It’s clear Trump’s team is going to try to litigate everything to death.”

The tax records chase is one of the main threads for Democrats as they consider whether to pursue additional investigations of Trump after the GOP-controlled Senate acquitted him on two articles of impeachment stemming from his attempt to get Ukraine to seek damaging information on a political rival. That will be unfolding in the middle of an election campaign in which both parties will be fighting for control of the White House and Congress.

“Congress’s investigatory responsibility does not end with this trial,” said Senator Dick Durbin, an Illinois Democrat, while conceding that the Senate Democrats have few options compared to their House colleagues.

Trump is citing his acquittal by the Senate as vindication as he fully engages in his re-election campaign. But in a free-wheeling celebratory speech at the White House Thursday, Trump suggested he was expecting Democrats to keep coming after him.

“If they find that I happen to walk across the street and maybe go against a light or something, ‘let’s impeach him,’” he said.

There are at least five different court cases regarding Trump’s tax and financial records. The Supreme Court is expected to decide by the end of June on the three cases it will hear in March.

The high court will hear arguments about whether Trump can keep the House Oversight and Reform Committee from getting records from his accountants Mazars USA LLP, and whether he can prevent the House Financial Services and House Intelligence committees from obtaining his financial records from Deutsche Bank AG and Capital One Financial Corp.

It’s not clear in the two House cases whether Trump’s personal tax returns would have to be turned over. The subpoena to Mazars doesn’t explicitly ask for the returns, while Deutsche Bank has said it doesn’t have them.

In the third Supreme Court case, Manhattan District Attorney Cyrus Vance Jr. has explicitly asked for Trump’s tax returns among other financial records. The demand is part of a criminal investigation into whether the Trump Organization falsified its business records to cover up hush-money payments to porn star Stormy Daniels and onetime Playboy playmate Karen McDougal before the 2016 election.

Trump lawyer Jay Sekulow said that the president’s legal team is responding in court.

“We are litigating those issues at the Supreme Court,” Sekulow said in a text message.

Two other cases — a lawsuit brought by the House Ways and Means Committee to compel the Treasury Department to release Trump’s federal tax returns and a lawsuit Trump filed against Ways and Means to prevent that panel from getting his New York state tax returns — are still working their way through the lower courts.

Democrats have one lever yet to pull — asking New York for Trump’s state tax documents.

So far, House Ways and Means Chairman Richard Neal has been hesitant to push for the New York state documents. He has said he’s focused on getting the federal returns that he first requested last April. And making that request could undermine his case on why he needs the IRS returns.

A spokeswoman for Neal didn’t respond to a question about whether the chairman plans to pursue the documents from New York.

And asking for the state tax returns could bring its own legal headaches. A judge said in November that Neal must notify the court and the president if he plans to ask for the documents and New York must wait two weeks before turning them over, to give Trump time to try to block the transfer.

“They can keep running down that hole and trying to re-impeach the president,” Representative Kevin Brady, the top Republican on the Ways and Means Committee, said. “They’re going to take a huge punishment at the polls.”

Trump is counting on the Supreme Court’s conservative majority to insulate him from a criminal investigation stemming from payments to the two women, who claimed they had sex with him before he took office. Trump is also trying to ensure that three committees in the Democratic-controlled House don’t get financial documents they could then release to the public.

Treasury Department

Democrats, conscious of the risk that could come with losing at the Supreme Court, are hoping to speed up another case seeking Trump’s tax returns from the Treasury Department, which a federal judge recently paused to wait for related cases to be decided.

“This case has been stalled long enough,” lawyers for the House said in a January filing asking the judge to resume consideration. “The requested relief is necessary for the committee to move forward with its pressing legislative and oversight inquiry, and to carry out its constitutional functions in the limited time remaining in this Congress.”

However, optimism is low among Democrats that they’ll obtain the documents before the November election. Senator Richard Blumenthal, a Connecticut Democrat, said he’s relying on a “free press” to investigate the president.

“I am concerned,” said Representative Lloyd Doggett, a Texas Democrat. “The chances that we ever see those returns in this Congress are not great.”

— With assistance from Jordan Fabian

Bloomberg News
Tax returns Donald Trump Richard Neal Lawsuits Court cases