The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
A recent article in the New York Times proclaimed the arrival of the "Imperial Supreme Court." These conservative jurists continue to rule against the executive branch, we learn. As with all empirical work, counting cases is very subjective. This rule is especially apt in separation of powers cases. Who won Trump v. Mazars (2020), for example? Was it the President, the Congress, or was it the Supreme Court? That decision did not stop the House committees from obtaining President Trump's tax returns. Nor did the Supreme Court allow the House committees to obtain President Trump's tax returns immediately. The decision, as with much of Chief Justice Roberts's handiwork, was muddled. The Court put forward a balancing test to determine whether the committees had a valid legislative purpose to obtain the tax returns. And that dispute would not be resolved quickly.
Fast-forward to 2022. Former-President Trump asked the Supreme Court to block the release of the returns. Trump argued that the request from the Ways & Means Committee was pretextual. The goal, Trump argued, was "exposing President Trump's tax information to the public for the sake of exposure." In response, the Ways & Means Committee told the Supreme Court that its request "is well-tailored to illuminating how the IRS conducted any audits of Mr. Trump while he was President and whether reforms are needed to enhance the IRS's ability to audit Presidents in the future." Indeed, the Committee rejected any argument that the release was pretextual. Rather, this request, like prior requests, was part of a plan to evaluate the IRS's audit of presidential tax returns. On November 22, the Supreme Court declined to block the release, with no recorded dissents.
With the tax returns in its possession, what would the Ways & Means Committee do? On December 2, Daniel Hemel explained that the Committee has the power to release the reports, but it should hesitate to do so on a rushed basis. He explained:
On the other hand, the Ways and Means Committee has maintained throughout the litigation over Trump's tax returns—which culminated with last week's Supreme Court decision—that it is seeking the documents as part of its plan to review the IRS's presidential audit program. (The presidential audit program is the procedure—mentioned in an IRS manual but not codified in any statute or regulation—by which the IRS examines individual tax returns filed by the president and vice president each year.) Any review of the presidential audit program that starts now and ends when the GOP takes control of the House in January would be slapdash and superficial. If Democrats on the House Ways and Means Committee rushed to release Trump's returns in the lame-duck session—without conducting the comprehensive review of the presidential audit program that they promised—it would look like their stated motive for seeking the documents was indeed, as Trump has alleged, pretextual.
Did the Ways & Means Committee follow Hemel's sage advice? No. On a party-line vote, the Committee voted to release six years of Trump's tax returns, including the 2020 return filed after his term concluded. The Committee discovered that Trump's returns were not audited during his first two years in office. That discovery is quite newsworthy. But why was it necessary to release six years of return to prove that point?
Hemel criticizes this decision:
The Times' report suggests that the breakdown of the IRS's presidential audit program started—and ended—with Trump. But only the committee can explain its reason for publishing six years of Trump's returns. And Tuesday's report is strangely silent on that critical question.
A high-level summary would have sufficed to show that—notwithstanding Trump's campaign trail claim that his returns were "very beautiful"—his filings contained items that should have merited further IRS scrutiny, such as a very large net operating loss carry forward that wiped away years of taxable income. We don't need to know, for example, precisely how much interest income Trump received from his adult children on intra-family loans in order to conclude that the IRS's failure to audit Trump for his first two years in office was potentially consequential.
Moreover, it's not clear why the committee decided to include Trump's tax year 2020 returns in the data dump—except for the scintillating fact that Trump paid $0 of federal income tax for that year (which was probably not unusual for owners of hotel properties at the height of the Covid-19 pandemic).
In short, the IRS appears to have fallen down on the job. But Democrats on the Ways and Means Committee—who promised to carry out a thorough review of the IRS's presidential audit program, yet instead made a hair-trigger decision to release Trump's tax returns—fell down on the job as well. And as a consequence, a pox on both Trump and the IRS has become a pox on the House too.
I think Hemel is correct that this situation reflects poorly on both the Trump Administration and the House. But in the long run, there is another concern: the Supreme Court. Chief Justice Roberts, in particular, may feel played. The Ways & Means Committee insisted that the returns were necessary for a legislative purpose. Then the Committee releases all of the returns, without any explanation for why that disclosure served that legislative purpose. Trump's arguments about pretext look a lot stronger. Wouldn't it have been enough for the Committee to simply request information about how often the returns of Trump, and other Presidents were audited? Why were the specifics of the returns needed?
In the long run, the House will feel the burn. Going forward, the Court may be less likely to give deference to a House Committee seeking to perform oversight of the executive branch. The Ways & Means Committee may have won the battle, but the prognosis for the war looks bleak.