Mnuchin added that requests from Congress “must serve a legitimate legislative purpose” and that the request from Democrats does not.
A number of legal experts have said it would be unprecedented for Mnuchin to refuse to turn over the tax returns, as the power for lawmakers to seek the returns is written explicitly in a 1924 law.
But Mnuchin, Trump’s former campaign finance chairman, has fought to protect the returns from public disclosure and said it would create a dangerous precedent if the returns are released. Mnuchin’s announcement on Monday appears to be his final decision in the matter, though he has hinted for weeks that he would not allow the release.
Neal said in a statement on Monday evening, “I will consult with counsel and determine the appropriate response.”
In his new letter, he said that “in reliance on the advice of the Department of Justice, I have determined that the Committee’s request lacks a legitimate legislative purpose, and . . . the Department is therefore not authorized to disclose the requested returns and return information.”
He said the Justice Department plans to make public its legal reasoning in finding that Mnuchin didn’t have to furnish the requests. Alexei Woltornist, a spokesman for the Department of Justice, referred a request for a copy of the department’s opinion to the Treasury Department.
House Democrats have insisted they are on strong legal footing in their request for the tax returns, and several lawmakers said they expect to file a lawsuit so that a federal judge will rule on the matter. This process could take months, though, and ultimately end up before the Supreme Court.
Neal first requested six years of Trump’s business and personal tax returns in March, and Mnuchin has twice refused to meet deadlines set by Democrats and said he needed more time to review the law. In his latest rejection, Mnuchin cited his consultations with the Justice Department, though he did not provide more information about their reasoning.
Democrats rejected Mnuchin’s argument and promised to continue pressing for the tax returns.
"We need immediate legal action. We cannot allow this bad president to set bad precedent," said Rep. Lloyd Doggett (D-Tex.). "If Trump once again faces only Republican silence and Democratic timidity, he will continue to erode our democracy by assuming more and more power."
Democrats have said obtaining the tax returns is necessary for them to perform their oversight duties, but Mnuchin has said repeatedly that their request for these records could be an invasion of Trump’s privacy and become a fishing expedition. In April, Mnuchin revealed that Treasury officials had conferred with White House lawyers about Trump’s tax returns before Democrats sent their formal request to the Internal Revenue Service. At the time, Mnuchin said he had not discussed the matter personally with the president.
“It looks like Mnuchin is ready for the fight — this is a plain rejection,” said Steve Rosenthal, an expert at the nonpartisan Tax Policy Center, who has briefed Congress on the matter. “He’s not delaying any further.”
With Treasury’s rejection, House Democrats may seek other avenues to obtain the president’s financial records. New York state’s legislature is considering legislation that would allow its tax department to turn Trump’s state returns over to certain Congress bodies, including the House Ways and Means Committee. Brad Hoylman, a state senator in New York who wrote the legislation, said Mnuchin’s denial will speed up consideration of his bill, which has already passed committee and could be approved by the state senate this month.
“Today’s news increases the sense of urgency that Albany must act now to provide the House Ways and Means Committee with the president’s state returns,” Hoylman said on Monday, adding he has been discussing the bill with Rep. Jerrold Nadler (D-N.Y.). “It could move very soon.”
The chairmen of the House Ways and Means Committee and the Senate Finance Committee have had the authority since 1924 to obtain the tax returns of any American, and the law stipulates that the treasury secretary “shall furnish” the information once it is requested. This law was put in place during the Harding administration because of financial improprieties that stemmed from the Teapot Dome scandal.
Trump is the first president since the Nixon administration to refuse to provide his tax returns. Democrats have accused Trump of shielding embarrassing information, but Republicans have said Trump is under no obligation to provide financial records and that voters decided the records were not important when they elected him to office.
“Big difference [between] legitimate congressional oversight & using the IRS as a political weapon,” Sen. Charles E. Grassley (R-Iowa), chair of the Senate Finance Committee, said on Twitter.