House Democrats prepare effort to request Trump tax returns

WASHINGTON — The top tax-writing committee in the House is readying a request for years of President Donald Trump's personal tax returns that is expected to land at the Internal Revenue Service as early as the next few weeks, NBC News has learned. And Democrats are prepared to "take all necessary steps," including litigation, in order to obtain them.

Ways and Means Committee Chairman Richard Neal, D-Mass., has asked the committee's attorneys to prepare the request, according to two aides involved in the process. Neal has also contacted the chairs of several other House investigative committees, including Oversight and Government Reform, Financial Services, Intelligence and Judiciary, asking them to provide detailed arguments for why they need the president's tax returns to conduct their probes.

"Every day the American people and Congress learn more about President Trump's improprieties, from conflicts of interest to influence peddling, potential tax evasion and violations of the Constitution — all roads leading back to President Trump's finances," said Ashley Etienne, spokeswoman for House Speaker Nancy Pelosi.

"These improprieties, and the lack of transparency around them, give the House legitimate legislative, oversight and legal reasons to review the President's tax returns. We will take all necessary steps, including litigation, if necessary, to obtain them." Etienne confirmed that the committees are working together to "ensure the House is able to present the strongest possible case."

Ways and Means is the only congressional committee with the authority to directly make the request for Trump's returns. Treasury Secretary Steven Mnuchin, whose department has authority over the IRS, will decide whether or not to grant the request.

Neal had earlier said he might wait for the conclusion of special counsel Robert Mueller's investigation of the Trump campaign's potential ties to Russia before making the request. The case to draw in multiple committee stakeholders was bolstered after Michael Cohen's testimony before the House Oversight Committee earlier this week, the aides said.

 

There are several key pieces of information Cohen, Trump's former personal "fixer" and attorney, provided in his testimony that strengthen the case for Congress to obtain the returns, according to the aides, who spoke on the condition of anonymity because they were not authorized to speak publicly.

Among other things, Cohen testified that Trump, as head of the sprawling Trump Organization before his election in 2016, had at times deflated the value of his properties to lower his tax bill and called the government "stupid" for giving him a $10 million tax refund in 2008. Under questioning from Rep. Alexandria Ocasio-Cortez, D-N.Y., Cohen also said Trump had provided inflated assets to an insurance company.

In a break with modern tradition, Trump has steadfastly refused to disclose his returns, suggesting they are under audit. Every U.S. president dating back to Richard Nixon has voluntarily disclosed his tax returns to the public.

The U.S. tax code authorizes the Ways and Means Committee to obtain any U.S. taxpayers' returns. Yet committee lawyers are expected to craft a request as precise as possible, aides said, in order to short circuit an all-but-certain legal challenge by the president that could draw the process out.

Specifically, the committee is likely to focus on Trump's personal returns versus his business filings, given the complex nature of the Trump Organization. According to his latest financial disclosure, the Trump Organization includes more than 500 different limited liability companies (LLCs) and shell companies that might take years to obtain and analyze.

Trump uses LLCs to house and manage his assets, as many wealthy individuals and businesses do, particularly in real estate. Under this arrangement, business income can also "pass through" the LLC to the owner's individual tax returns.

The committee believes 10 years of his personal returns "can give a good sense of whether there is any evidence of tax fraud and numerous items of interest," an aide said.

Importantly, the aide said the committee also believes it also has the authority to obtain any correspondence between Trump and the IRS, including whether he's been audited and the results of the audit, that might provide additional information. Cohen, for his part, testified that he didn't actually think Trump's tax returns were under audit during the 2016 election, contrary to what Trump has long claimed.

Democrats will also use Trump's tax returns to explore whether he sought to write off as a business expense the hush money payments Cohen said he made on behalf of the president to porn star Stormy Daniels.

At a hearing Neal called last month laying the groundwork to request the president's taxes, tax expert Steven Rosenthal said Trump had exhibited "aggressive tax planning" prior to his 2016 election and "could have eliminated his taxes for a couple of decades" by claiming millions in business-related losses.

"There is a lot to find," said Rosenthal, a senior fellow at the nonpartisan Tax Policy Center who scrutinized portions of Trump's 1995 and 2005 returns last year in partnership with the New York Times.

The Times reported in October that the president received at least $413 million in today's dollars from his father's real estate empire, much of it by skirting U.S. tax laws.

22 PHOTOS
Donald Trump and Melania Trump at the Oscars through the years
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Donald Trump and Melania Trump at the Oscars through the years
BEVERLY HILLS, CA - FEBRUARY 29: Donald Trump and Melania Knauss attend the 2004 Vanity Fair Oscar Party at Mortons on February 29, 2004 in Beverly Hills, California. (Photo by Billy Farrell/Patrick McMullan via Getty Images)
BEVERLY HILLS, CA - FEBRUARY 29: (L-R) Teresa Barrick, Steven Tyler, Melania Knauss and Donald Trump attend the 2004 Vanity Fair Oscar Party (Exclusive Inside Coverage) at Mortons on February 29, 2004 in Beverly Hills, California. (Photo by Jamie McCarthy/Patrick McMullan via Getty Images)
Donald Trump during 2004 Vanity Fair Oscar Party - Arrivals at Mortons in Beverly Hills, California, United States. (Photo by Tony Barson Archive/WireImage)
Sharon Osbourne, Donald Trump and Melania Knauss during 12th Annual Elton John AIDS Foundation Oscar Party Co-hosted by In Style - Inside at Pearl in West Hollywood, California, United States. (Photo by KMazur/WireImage)
Donald Trump and Melania Knauss during Elton John AIDS Foundation's 12th Annual Oscar party co-hosted by In Style - Arrivals at Pearl in West Hollywood, California, United States. (Photo by J. Merritt/FilmMagic)
386900 83: Donald Trump and his girlfriend, model Melania Knauss arrive for the 73rd Annual Academy Awards March 25, 2001 at the Shrine Auditorium in Los Angeles. (Photo by Chris Weeks/Getty Images)
386900 171: Donald Trump and his girlfriend, model Melania Knauss arrive for the 73rd Annual Academy Awards March 25, 2001 at the Shrine Auditorium in Los Angeles. (Photo by Chris Weeks/Getty Images)
Donald Trump during The 73rd Annual Academy Awards - Arrivals at Shrine Auditorium in Los Angeles, California, United States. (Photo by SGranitz/WireImage)
Donald Trump & Samuel L. Jackson during The 73rd Annual Academy Awards - Arrivals at Shrine Auditorium in Los Angeles, California, United States. (Photo by SGranitz/WireImage)
(Original Caption) Donald Trump with a friend. (Photo by Frank Trapper/Corbis via Getty Images)
LOS ANGELES, CA - FEBRUARY 27: (L-R) Donald Trump, Melania Knauss Trump, Gwen Stefani and Gavin Rossdale attend Vanity Fair Oscar Party at Morton's Restaurant on February 27, 2005 in Los Angeles, California. (Photo by Patrick McMullan/Patrick McMullan via Getty Images)
LOS ANGELES, CA - FEBRUARY 27: Donald Trump and Melania Knauss Trump attend Vanity Fair Oscar Party at Morton's Restaurant on February 27, 2005 in Los Angeles, California. (Photo by Billy Farrell/Patrick McMullan via Getty Images)
Real estate mogul and Reality TV star and executive producer ('The Apprentice') Donald J. Trump (R) and new wife model Melania Knauss Trump arrive at the Vanity Fair Academy Awards® party at Mortons restaurant. (Photo by Chris Farina/Corbis via Getty Images)
Donald Trump and Melania Trump during 2005 Vanity Fair Oscar Party - Arrivals at Mortons in Los Angeles, California, United States. (Photo by George Pimentel/WireImage)
Melania Trump and Donald Trump during 13th Annual Elton John AIDS Foundation Oscar Party Co-hosted by Chopard - Arrivals at Pacific Design Center in Los Angeles, California, United States. (Photo by Jean-Paul Aussenard/WireImage)
Melania Trump and Donald Trump during 13th Annual Elton John AIDS Foundation Oscar Party Co-hosted by Chopard - Inside at Pacific Design Center in West Hollywood, California, United States. (Photo by KMazur/WireImage)
Tim Allen, Jane Hajduk, Melania Trump, and Donald Trump (Photo by KMazur/WireImage)
WEST HOLLYWOOD, CA - FEBRUARY 27: Donald Trump and Melania Trump arrive at the Vanity Fair Oscar Party 2011, February 27, 2011 at the Sunset Tower Hotel in West Hollywood, California. (Photo by Gregg DeGuire/FilmMagic)
WEST HOLLYWOOD, CA - FEBRUARY 27: Donald Trump and Melania Trump arrive at the Vanity Fair Oscar Party 2011, February 27, 2011 at the Sunset Tower Hotel in West Hollywood, California. (Photo by Gregg DeGuire/FilmMagic)
Portrait of married couple Donald and Melania Trump as they pose together on the red carpet at the Kodak Theater during the 83rd Academy Awards, Hollywood, California, February 27, 2011. (Photo by Bob Riha, Jr./Getty Images)
Donald Trump and wife Melania at the 83rd Academy Awards, held at the Kodak Theater in Hollywood. (Photo by Frank Trapper/Corbis via Getty Images)
(L-R) Actress Helena Bonham Carter, Donald Trump and wife Melania Trump arrive at the 83rd Annual Academy Awards held at the Kodak Theatre on February 27, 2011 in Los Angeles, California. (Photo by Jeff Kravitz/FilmMagic)
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