Despite the great deal of chatter (marches even) about the need for President Trump to release his tax returns, there has been relatively little discussion of Congress’s statutory authority to obtain these materials. Two exceptions are these comments by Professors Andy Grewal and George Yin. Grewal and Yin agree that Congress has the authority to request and obtain Trump’s tax returns for a legitimate legislative purpose, and they also agree that the executive branch could disregard a congressional request for these returns on certain grounds (e.g., Congress does not in fact have a legitimate legislative need for the information or, in Grewal’s words, “the request is supported only by personal animus and not a proper legislative purpose”).
Though the matter is not free from doubt, I take a somewhat different view of the law here. I argue below that the Secretary of the Treasury (to whom Congress directs requests for tax return information) and the executive branch in general do not have the legal right to refuse congressional requests for tax return information based on an assessment of the legislative need or motive that underlies such requests. I also suggest that Congress can minimize the likelihood that the executive branch will assert a right to refuse its request by adopting a careful and disciplined approach to making the request in the first place.
Congress’s Statutory Authority
The text of the relevant statute is as follows:
(f) Disclosure to Committees of Congress
(1) Committee on Ways and Means, Committee on Finance, and Joint Committee on Taxation
Upon written request from the chairman of the Committee on Ways and Means of the House of Representatives, the chairman of the Committee on Finance of the Senate, or the chairman of the Joint Committee on Taxation, the Secretary shall furnish such committee with any return or return information specified in such request, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.
(2) Chief of Staff of Joint Committee on Taxation
Upon written request by the Chief of Staff of the Joint Committee on Taxation, the Secretary shall furnish him with any return or return information specified in such request. Such Chief of Staff may submit such return or return information to any committee described in paragraph (1), except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.
(3) Other committees
Pursuant to an action by, and upon written request by the chairman of, a committee of the Senate or the House of Representatives (other than a committee specified in paragraph (1)) specially authorized to inspect any return or return information by a resolution of the Senate or the House of Representatives or, in the case of a joint committee (other than the joint committee specified in paragraph (1)) by concurrent resolution, the Secretary shall furnish such committee, or a duly authorized and designated subcommittee thereof, sitting in closed executive session, with any return or return information which such resolution authorizes the committee or subcommittee to inspect. Any resolution described in this paragraph shall specify the purpose for which the return or return information is to be furnished and that such information cannot reasonably be obtained from any other source.
(4) Agents of committees and submission of information to Senate or House of Representatives
(A) Committees described in paragraph(1)
Any committee described in paragraph (1) or the Chief of Staff of the Joint Committee on Taxation shall have the authority, acting directly, or by or through such examiners or agents as the chairman of such committee or such chief of staff may designate or appoint, to inspect returns and return information at such time and in such manner as may be determined by such chairman or chief of staff. Any return or return information obtained by or on behalf of such committee pursuant to the provisions of this subsection may be submitted by the committee to the Senate or the House of Representatives, or to both. The Joint Committee on Taxation may also submit such return or return information to any other committee described in paragraph (1), except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.
(B) Other committees
Any committee or subcommittee described in paragraph (3) shall have the right, acting directly, or by or through no more than four examiners or agents, designated or appointed in writing in equal numbers by the chairman and ranking minority member of such committee or subcommittee, to inspect returns and return information at such time and in such manner as may be determined by such chairman and ranking minority member. Any return or return information obtained by or on behalf of such committee or subcommittee pursuant to the provisions of this subsection may be submitted by the committee to the Senate or the House of Representatives, or to both, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer, shall be furnished to the Senate or the House of Representatives only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.
(5) Disclosure by whistleblower
Any person who otherwise has or had access to any return or return information under this section may disclose such return or return information to a committee referred to in paragraph (1) or any individual authorized to receive or inspect information under paragraph (4)(A) if such person believes such return or return information may relate to possible misconduct, maladministration, or taxpayer abuse.
26 U.S.C. §6103(f).
This subsection establishes (1) which congressional committees/officials are authorized to access tax return information; (2) how such information is to be accessed; and (3) the conditions under which such information may be further disseminated. (The last paragraph, 6103(f)(5), which deals with disclosures to Congress by IRS whistleblowers, is not pertinent to our discussion here, but my Haverford classmate Bryan Camp has co-authored this article on its potential application to Trump’s tax returns).
A threshold question is whether Congress’s right to obtain tax return information under 6103(f) is unqualified. One way of looking at this statute is as an auxiliary to Congress’s inherent constitutional power to compel the production of information needed for legislative or other proper purposes. In that case Congress’s power to obtain tax return information would be subject to the same general limitations that apply when it seeks other types of information from the executive branch. Thus, Professor Grewal argues that “although Section 6013(f) is phrased in absolute terms- it allows tax committees and the JCT Chief of Staff to obtain tax return information, without qualification- any congressional action, including requests for information, must come within the scope of legislative powers granted by Article I of the Constitution.”
This appears to be consistent with the view expressed by the Congressional Research Service, which sees 6103(f) as actually limiting, rather than expanding, Congress’s authority to obtain tax return information. CRS explains:
In certain circumstances, Congress has chosen to enact laws that limit its own ability to access specific types of information. Arguably, the quintessential example of such self-limiting action is 26 U.S.C. Section 6103(f), under which only the House Committee on Ways and Means, Senate Committee on Finance, and the Joint Committee on Taxation are permitted to access an individual’s tax returns. Should any other committee require such information, it must first obtain a House or Senate resolution specifying the purpose for which the information is to be furnished and that the requested information cannot be reasonably obtained from any other source. The information is to be provided only when the requesting committee is sitting in closed executive session.
I submit, however, there is an alternative perspective that may better comport with how Congress has historically viewed 6103(f). Because tax returns were created by private parties pursuant to a legal mandate, it seems that Congress never viewed this information as “belonging” to the executive branch. Instead, Congress by law both established the requirement to prepare tax returns and defined the category of persons who had the right to access or inspect those returns.
Initially, tax returns were open to inspection by the public at large. See George K. Yin, Protecting Taxpayers from Congressional Lawbreaking, 69 Tax Lawyer 103, 154 (2015). By the late 19th century, Congress limited access to tax returns, but over the next several decades it either considered or enacted a variety of schemes for determining who could access corporate and/or individual tax information. These ranged from absolute nondisclosure to full public access. Id. at 119-26, 154-59. Other arrangements included access only by presidential order, full access by all congressional committees, and the current arrangement of limited congressional access through the Secretary of the Treasury. This variety of mechanisms suggests that Congress did not begin with a presumption of exclusive executive control or access. For example, in 1910 Senator La Folette proposed an amendment that would have allowed either house of Congress to authorize inspection of tax returns. Although this amendment, which passed the Senate but not the House, never made it into law, it appears that this and other measures were debated based on pragmatic considerations and the need to protect taxpayer privacy, not constitutional concerns about congressional access to executive branch information. See id. at 158-59.
Since the right of all parties authorized to access tax returns therefore stands on an equal footing, arguably no special showing of need is required for congressional access. The law can thus be thought of as establishing a database to which certain parties, including the congressional tax committees, are given access. This reading of 6203(f) is consistent with its language, which imposes no limitation on the discretion of the identified congressional members and staff to request tax return information.
In his 2015 law review article, Professor Yin, formerly the chief of staff of the Joint Committee on Taxation, did not endorse this perspective on 6103(f). Although Yin’s analysis focused on a different aspect of the law, namely the circumstances under which a tax committee could publicly report tax return information pursuant to 6103(f)(4)(A), he assumed that the statute implicitly limits congressional requests for such information to those which “further a valid legislative purpose.” See Yin, supra, 69 Tax Lawyer at 128-29 (“Since Congress’s disclosure of confidential information to the public is more violative of privacy rights than its mere seizure of the same information, a reasonable interpretation of the restriction intended by Congress in 1924 (absent evidence to the contrary) was to require at a minimum the existence of some legitimate committee purpose for a disclosure.”).
If one reverse engineers Yin’s analysis, some flaws appear. Yin seeks to demonstrate that 6103(f)(4)(A) implicitly limits the tax committees to reporting “relevant or useful” tax information to the House or Senate. The “relevant or useful” standard was in fact expressly part of the statute until 1976, when it was eliminated as part of the Tax Reform Act of 1976. Yin contends in essence that the elimination of this language was not intended to have any effect so that the statute should be read as if those words were still in there.
Let’s assume, for the sake of argument, that he is correct. Does it therefore follow, as Yin seems to believe, that a tax committee which reports information that is not “relevant or useful” has violated the law and, in fact, actually committed a crime (because violation of the tax privacy laws is a misdemeanor or felony)? How exactly would it be determined whether the information was relevant or useful? Would a prosecutor have to prove that members of the committee knew that the information disclosed was not relevant or useful to secure convictions?
Of course, these questions are purely hypothetical because, as Yin acknowledges, the Speech or Debate Clause would clearly bar any attempt to enforce a legal limitation on the tax committee’s authority to disclose information to the full legislative chamber. See Yin, supra, 69 Tax Lawyer at 137-42. Ordinarily statutes are construed so as to avoid serious constitutional issues, yet Yin strains to place a construction on 6103(f) that by his admission would violate the Speech or Debate Clause.
Apart from this constitutional issue, it seems unlikely that Congress intended to regulate the operation of its tax committees by law (much less by a criminal law). Congress sometimes enacts laws that purport to govern its proceedings, but these are generally understood to be what Professor Bruhl calls “statutized rules,” i.e., exercises of the authority of each house to “determine the Rules of its Proceedings” under Article I, §5, cl. 2. Congress is not wont to invite the executive and judicial branches to second guess the activities of its committees, particularly with regard to formal actions authorized by committee vote.
Consider how Congress treats classified information, which is even more sensitive than tax return information. Each house has adopted detailed rules and procedures for handling and releasing classified information. For example, the intelligence committees may not disclose publicly any information in their possession unless it is determined, by committee vote, that “the public interest would be served by such disclosure.” See, e.g., House Rule X(11)(g)(1). The existence of this standard does not imply that the other branches can second guess the committee’s determination, even if they believe it was made negligently or in bad faith.
Similarly, while Professor Yin is undoubtedly correct that the elimination of the words “relevant or useful” in 6103(f) was not intended to mean that the tax committees could act arbitrarily or for improper purposes in disclosing tax return information, I doubt these words were ever intended to establish a legal (or legally enforceable) limitation on the tax committees. I don’t know why Congress eliminated the “relevant or useful” language, but it certainly would not have done so if it thought this language marked the line between lawful and criminal disclosures.
The absence of a legal limitation, however, does not imply the tax committees may properly do whatever they please. It is clear Congress expected and intended that the tax committees would act carefully and responsibly in handling tax return information. Thus, Professor Yin is surely correct that the committees should not report tax return information unless it is, at a minimum, “relevant or useful.” Professor Grewal is likewise correct that they should not collect or disclose such information for improper purposes, such as harassing political opponents. Where we differ is in the assumption that these norms must be read into 6103(f) as implied legal limitations.
If I am correct, the chairman of the Ways and Means Committee has the same power to access tax return information as he would to query a database belonging to the committee. If he uses this power recklessly or improperly, he is (at least theoretically) accountable to the House. He could be replaced as chairman by the House leadership, be reprimanded by the Ethics Committee or even face punishment by the full House.
Apart from these (unlikely) potential consequences, the chairman of a tax committee has incentives to be careful in exercising authority under 6103(f). The powers given to the tax committees under this section reflect the prestige of these committees and the presumption that they will exercise care in requesting or disclosing tax return information. See Yin, supra, 69 Tax Lawyer at 136 (noting that 1976 hearings revealed the tax committees “had rarely sought tax return information of particular taxpayers and had handled it without incident”). The chairman and members of the committee will naturally wish to avoid actions that could jeopardize the committee’s reputation and the special powers entrusted to it.
Yin’s article illustrates this point nicely. He seeks to show that the House Ways and Means Committee violated 6103(f)(4)(A) when it gratuitously (in Yin’s view) included some taxpayer information in a publicly disclosed referral letter to the Department of Justice regarding the Lois Lerner matter. Although Yin acknowledges that the tax information revealed (which basically amounted to identifying about 50 tax exempt organizations) “probably resulted in a negligible loss of privacy,” 69 Tax Lawyer at 106, he nonetheless harshly criticizes the committee’s actions. He calls the committee’s disclosure “reprehensible,” speculates that it was motivated by “partisan political advantage” (though by Yin’s own account the disclosure was completely irrelevant to any political objective the committee may have had) and accuses it of a criminal violation of the tax secrecy laws. Id. at 113-18. He then proposes that the law be amended to prevent the tax committees from directly accessing tax return information, requiring them instead to rely on the JCT chief of staff as an intermediary.
Keeping Congress on the straight and narrow is a good thing, though personally I think Yin’s reaction is a bit over the top for what seems like an inadvertent and trivial violation (if it was a violation at all). But the very fact that a former JCT chief of staff would publicly attack the Ways and Means Committee over a minor matter suggests why the tax committees will not be adventurous with their 6103(f) authority.
Most importantly, the tax committees must consider the reaction of the executive branch. In my hypothesis the Secretary of the Treasury has no discretion to refuse a request for information under 6103(f). But I have the sneaking suspicion that executive branch lawyers may prefer the views of Professors Grewal and Yin, and they therefore may assert the right to deny a request the executive branch deems not to be for a proper legislative purpose (or otherwise flawed). To avoid giving any excuse for asserting such a claim, the tax committees must be careful to stay on the strongest procedural and substantive grounds when making a 6103(f) request, particularly on matters that are high profile and/or politically sensitive.
Application to Trump’s Tax Returns
Turning now to a very high profile and politically sensitive matter, there are several ways by which Congress could seek to obtain access to President Trump’s tax returns. Many people believe that Trump should have released his tax returns during the campaign, as presidential candidates traditionally have done. The chairman of one of the tax committees could request the returns for the purpose of redressing this failure and making the returns available to the general public.
There is a strong argument that such a request would be improper. Congress considered but did not enact proposals that would have allowed Congress or its committees to make tax return information publicly available. As enacted, 6103(f) envisions a two-step process in which tax return information is requested by a committee, presumably for the carrying out of Congress’s legislative or other constitutional responsibilities, and the committee subsequently makes a decision to report some or all of this information to the full body, presumably because it considers the information “relevant or useful” to the chamber’s deliberations. While the effect of this latter step is to make tax return information public (unless it is reported to the chamber while it is sitting in executive session), I agree with Professors Grewal and Yin that a request made for the sole purpose of making tax return information public would be improper (if not necessarily illegal). Cf. Watkins v. United States, 354 U.S. 178, 200 (1957) (“no congressional power to expose for the sake of exposure”).
The tax committees would be in a much stronger position if they were to request Trump’s tax returns for use in a matter properly before those committees. At the present time, however, I am not aware of any matter before those committees to which Trump’s tax returns would be relevant.
It has been suggested that the tax committees need to see Trump’s tax returns to determine whether and how he would benefit from any tax legislation his administration proposes. This strikes me as rather weak and seemingly pretextual. By this reasoning every member of the tax committees (and indeed every member of Congress) should also disclose their tax returns.
There are stronger reasons for the non-tax committees that are conducting oversight of the Trump administration to seek access to the president’s tax returns. In particular, those committees that are looking into connections with Russia (HPSCI, SSCI) or potential Foreign Emolument Clause/financial conflict of interest issues (House Oversight Committee) arguably have a need for access to Trump’s tax returns.
Exactly what these tax returns would reveal regarding the subject of these inquiries and whether the same information could be obtained from alternative sources is a matter of debate. It would be up to the investigating committees in the first instance to decide whether the information these tax returns are likely to contain (see here for a useful summary) make them worthwhile to pursue. But there seems to be little doubt that they contain information of at least potential relevance to these investigations.
The problem, of course, is that 6103(f) does not authorize these non-tax committees to access tax return information directly without a special resolution. It could be argued that the procedurally proper way for these committees to access tax return information is to obtain a resolution authorizing access under 6103(f)(3). Under that provision, the resolution must “specify the purpose for which the return or return information is to be furnished and that such information cannot be reasonably be obtained from any other source.” Upon passage of such a resolution by the House or Senate (or, in the case of a joint committee, a concurrent resolution passed by both), the Secretary of the Treasury is required to furnish the committee in question with the requested tax return information, though the information must be received in executive session. (Under 6103(f)(1), the tax committees are only required to receive tax return information in executive session when it would identify a particular taxpayer, but for present purposes this requirement would be equally applicable to the tax committees.).
On the other hand, nothing in 6103(f) prohibits the tax committees from obtaining tax return information for purposes of determining whether it is relevant to an investigation currently being conducted by another committee. If it is decided that the information is relevant, the tax committee would then be in a position to determine its next step, which could include (1) starting its own inquiry; (2) recommending that the investigating committee seek a resolution under 6103(f)(3); and/or (3) disclosing the information to the full body or, possibly, directly to the investigating committee only.
This strikes me as a perfectly reasonable interpretation of the authority provided in 6103(f), and one well-suited to the exigencies of the current situation. Whether it is the best interpretation is ultimately, in my opinion, an internal question that the House and Senate must each decide for itself, with the advice of the parliamentarians and such others as they may see fit to consult.
If my suggestion were adopted, the process would begin by the investigating committee making a written request to the chairman of the tax committee asking that he obtain some or all of Trump’s tax return information. The request should explain the potential relevance of the information sought to the committee’s investigation and why it cannot be obtained elsewhere. The request would thereby comply with the spirit if not the letter of 6103(f)(3).
The chairman of the tax committee could then request the tax information directly from the Secretary of the Treasury or, alternatively, he could ask the JCT chief of staff to make that request pursuant to 6103(f)(2). The latter might be preferable in that nonpartisan career officials (i.e., the JCT chief of staff and his subordinates) could then review the tax return information and make the initial determination as to whether any of it was relevant to the investigating committee’s inquiry. If the chief of staff determined that some or all of the material was not relevant, there would be no need for this information to go any further. Any material determined to be relevant would be forwarded to the tax committee to make the final decision on what to do with it. This arrangement would provide the maximum protection of the president’s privacy interests while still enabling Congress to obtain any tax return information relevant to ongoing inquiries.
Professor Grewal rightly cautions against dragging the JCT chief of staff or other JCT career staff into a political fight, but in this scenario they would be acting pursuant to specific instructions and subject to oversight of the tax committee chair and other members of Congress. The procedure above would work in a similar fashion as the legislative proposal made by Professor Yin in his 2015 law review article, under which the JCT chief of staff would act as an intermediary for all congressional requests for tax return information. See Yin, supra, 69 Tax Lawyer at 145-49. (In my view, however, such a legislative change to 6103(f) is neither necessary nor realistic).
Congress has many more difficult and important issues to face than how to get a hold of Trump’s tax returns. In the spirit of crawling before you can walk, though, I suggest Congress consider the proposal outlined above. If it can get this done, who knows what else it might accomplish?