Draft IRS memo says Treasury must turn over Trump's taxes unless he invokes executive privilege

A draft IRS legal memo obtained by The Washington Post says the Treasury Department must turn over tax returns to Congress unless the president asserts executive privilege over them.

That confidential memo contradicts the Trump administration's rationale for so far refusing to provide Congress with President Donald Trump's tax information, defying repeated requests by the House Ways and Means Committee.

Treasury Secretary Steven Mnuchin has said the returns are not required because there is no legislative purpose being pursued by Congress. But the memo says such disclosure is "mandatory, requiring the Secretary to disclose returns, and return information, requested by the tax-writing Chairs," the Post reported. 

RELATED: Take a look at tax breaks that are no longer available to U.S. taxpayers: 

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5 tax breaks no longer available
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5 tax breaks no longer available

1. Personal exemptions

For 2017, eligible taxpayers could claim an exemption for themselves and a spouse as well as exemptions for dependents. Each such exemption reduced taxable income by $4,050.

For 2018, however, there are no personal exemptions. Tax reform suspended them, basically meaning it made them temporarily unavailable.

Specifically, personal exemptions and many other tax breaks that were suspended by the Tax Cuts and Jobs Act will be unavailable for tax years 2018 through 2025.

2. Moving expenses

You cannot deduct moving expenses from your 2018 taxable income, either. Tax reform suspended this deduction for everyone except active-duty members of the U.S. armed forces who are ordered to relocate.

“During the suspension, no deduction is allowed for use of an automobile as part of a move,” states IRS Publication 5307, which outlines how tax reform impacts individuals and families in tax year 2018.

Tax reform also suspended the exclusion for qualified moving expense reimbursements for everyone but active-duty military members. So, if your employer reimbursed you for moving expenses in 2018, that reimbursement will be considered taxable income.

3. Casualty and theft losses

Tax reform modified the deduction for net casualty and theft losses, making it available only to taxpayers who suffered such losses that were attributed to a federally declared disaster.

Other requirements for this deduction remain in place, however.

“The loss must still exceed $100 per casualty and the net total loss must exceed 10 percent of your [adjusted gross income],” states Publication 5307.

4. Job-related expenses

Previously, folks who itemized their tax deductions could write off what the IRS refers to as miscellaneous deductions to the extent that they exceeded 2 percent of such taxpayers’ taxable income. But miscellaneous deductions are among those that have been suspended.

Miscellaneous deductions include unreimbursed employee expenses, such as:

  • Uniforms
  • Union dues
  • Business-related meals
  • Business-related entertainment
  • Business-related travel

So, if you paid for such expenses out of your own pocket in 2018 and were not reimbursed for them by your employer, you cannot write them off on your next tax return.

5. Tax preparation fees

This is another miscellaneous deduction and thus has been suspended. It includes:

  • The cost of tax preparation software programs
  • The cost of tax publications
  • Fees for filing tax returns electronically

So, if you paid any of these expenses in 2018, you can’t write them off on your next tax return.

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Federal law gives congressional tax committees the right to obtain and review the otherwise confidential federal tax information of any taxpayer. The IRS memo says the law “does not allow the Secretary to exercise discretion in disclosing the information provided the statutory conditions are met,” rejecting Mnuchin's rationale.

Mnuchin's "obligation to disclose return and return information would not be affected by the failure of a tax-writing committee . . . to state a reason for the request,” the memo states, adding that the “only basis the agency’s refusal to comply with a committee’s subpoena would be the invocation of the doctrine of executive privilege."

The IRS told the Post that the memo, which is unsigned and doesn't refer to Trump, was a draft document written by an internal lawyer and does not represent the agency's official position.

The report comes after the Treasury Department said last week that it would not comply with congressional subpoenas to provide six years of Trump’s tax returns to the House Ways and Means Committee — making it increasingly likely Democrats will have to take the battle to court.

Mnuchin said Wednesday in testimony at a House Financial Services Committee hearing that he has "had no conversations with the president or anyone in the White House about delivering the president's tax returns to Congress."

Trump has refused to make his tax returns public, becoming the first president in four decades to do so. Trump has cited ongoing audits as preventing him from releasing them, although such review would not preclude him from releasing the information.

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