New York Passes Law That Will Allow Congress To Get Trump’s State Tax Returns

New York has passed a law that would allow Congress to obtain copies of the President's New York State tax returns.

New York State has passed a law that would allow Congress to receive copies of taxpayer’s New York State tax returns, a move that is obviously aimed at making it easier for Congress to obtain financial information regarding the President and his business interests:

ALBANY — New York State lawmakers on Wednesday gave their final approval to a bill that would clear a path for Congress to obtain President Trump’s state tax returns, injecting another element into a tortuous battle over the president’s refusal to release his taxes.

The bill, which is expected to be signed by Gov. Andrew M. Cuomo, a third-term Democrat and regular critic of Mr. Trump’s policies and behavior, will authorize state tax officials to release the president’s state returns to any one of three congressional committees.

The returns — filed in New York, the president’s home state and business headquarters — would likely contain much of the same information as the contested federal returns, though it remained unclear whether those congressional committees would use such new power in their investigations.

The Legislature’s actions put the state in a bit of uncharted legal territory; Mr. Trump has said that he is ready to take the fight over his federal tax returns to the Supreme Court, and it seems likely that he would seek to contest New York’s maneuver.’

Republicans have called the effort in Albany a “bill of attainder” — an unconstitutional piece of legislation aimed at a single person or group — while also decrying the potential invasion of privacy, suggesting that federal officials would conduct improper “fishing expeditions.”

Still, for Democrats for whom the president’s steadfast refusal to release his returns has been a constant frustration, the legislative action was being cast as both a victory for states’ rights and the often unsung power of a state legislature.

“It’s a matter of New York’s prerogative,” said State Senator Brad Hoylman, a Democrat from Manhattan, who sponsored the bill in his chamber. “We have a unique responsibility and role in this constitutional standoff.”

Once signed into law by Mr. Cuomo, the legislation would require the commissioner of the New York Department of Taxation and Finance to release returns to the chairmen of the House Ways and Means Committee, the Senate Finance Committee and the Joint Committee on Taxation for any “specified and legitimate legislative purpose.” Such a request would be have to be made it writing, and only after a request for federal returns has been made to the Treasury Department.

In Washington, the House Ways and Means Committee has unsuccessfully sought six years of the president’s personal and business tax returns. The Treasury Department said last week that it would not honor a congressional subpoena to hand over the president’s returns, saying the request lacked a “legitimate legislative purpose,” though a leaked draft memorandum from the I.R.S. suggested that such logic was flawed.

On Wednesday, the Ways and Means Committee said it was focused on pursuing Mr. Trump’s federal tax information, regardless of New York’s action and the potential for getting the president’s state returns.

“Our request to the Internal Revenue Service was in furtherance of an investigation into the mandatory presidential audit program at the I.R.S.,” said Daniel Rubin, a spokesman for the committee, which is led by Representative Richard E. Neal, the Massachusetts Democrat. “State returns would not help us evaluate this program.”

At the same time, Steven M. Rosenthal, a tax lawyer and senior fellow at the Urban-Brookings Tax Policy Center, said he would not be surprised if the president fought the state law, though he believed it passed legal muster.

“Of course, the Legislature was motivated by Donald Trump’s current refusals,” Mr. Rosenthal said, but added that he thought the bill was written broadly enough to avoid the “bill of attainder” accusation.

That opinion was echoed by Brian Galle, a law professor at Georgetown University Law School, who said that “bills of attainder have been interpreted really narrowly by the courts,” and noted that legislation often describes targeted industries or municipalities in vague terms. (In New York, for instance, state bills aimed at New York City are typically described as those affecting “a city with a population of one million or more,” as New York is the only such city in the state.)

“The bill doesn’t say you can release Donald Trump’s, and only Donald Trump’s, tax returns,” Mr. Galle said.


All of this takes place in the context of a battle between the House Ways And Means Committee and the White House regarding the President’s Federal tax returns. It began in April when Congressman Richard Neal, the Chairman of the Committee, sent a request to Treasury Secretary Steve Mnuchin and I.R.S. Commissioner Charles Rettig requesting those returns. That request was made pursuant to 26 U.S.C. 6103 which, among other things, allows the Ways And Means Committee to request copies of the tax returns of any individual American. Despite that statute, Treasury Secretary Steve Mnuchin has refused to comply with both a written request and a subpoena for these documents. In refusing these requests, Mnuchin argued that the request, and subsequent subpoena, lack a “legitimate legislative purpose,” an argument that the Administration has made in a number of other situations where it is refusing to comply with seemingly legitimate document requests.  Just yesterday, though, we learned that an internal I.R.S. memo contradicts Mnuchin and argues that the agency has a legal duty to provide the returns to the committee as requested. Despite that, it appears likely that the committee will have to go to court to enforce its rights under the law.

As noted, this law would allow the Ways and Means Committee to request copies of the state tax returns of any New York State resident. While the law applies generally to any taxpayer, it is obviously most specifically aimed at President Trump. In that regard, it’s worth noting that the New York State returns would contain must of the same information that would be included in the Federal return. Unlike some states, though, New York apparently does not require taxpayers to send a copy of the Federal return when they file their state return. Despite this, the state returns filed by the President, while they would likely not be quite as insightful into his finances as the Federal return, would provide at least some clues to investigators that could lead to other information, as well as allowing accountants to reconstruct what the Federal returns probably look like given the information in the Federal return.

It’s probable, of course, that Trump will seek to challenge this law in court if the Ways And Means Committee chooses to take advantage of it. However, I tend to agree with the legal experts quoted above who argue that those challenges are unlikely to succeed. The most potent argument against the law would be that it amounts to a “Bill of Attainder,” which the Constitution bans both Congress, in Article I, Section 9, Clause 3 and the states, in Article I, Section 10, Clause 1, from passing.

Generally speaking, a Bill of Attainder is a bill or law that is aimed at inflicting punishment on a specific individual. For the most part, courts have interpreted these clauses narrowly and in the context of what was considered a Bill of Attainder at the time that the Constitution was drafted. Therefore, there is a strong argument that such a prohibition only applies to laws that contain some sort of criminal punishment, which isn’t the case here. Even if this law did fall within the general category of what could be considered a “Bill of Attainder,” though, it’s worth noting that the law allows the committee to request the return of anyone who files a return in New York State as long as they meet the standards set forth in the statute. It doesn’t just limit itself to people named “Trump.” Therefore, while Trump’s lawyers may argue that their client is the “real” target of the law, the fact that it is generally applicable means that it would be likely to survive a challenge as a “Bill Of Attainder.” Beyond this, it’s hard to see what other legal challenge Trump’s lawyers could make against the law, though I’m sure they’ll come up with something.

FILED UNDER: Donald Trump, Law and the Courts, Politicians, US Politics, , ,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. Teve says:

    it looks like we’re going to see his returns soon but I don’t think they’re really going to be bombshells. They’re going to show that his claim to be worth 10 billion dollars is a huge lie, his claim to be worth 1 billion dollars is a huge lie, and he’s being kept afloat by Russian mob money. And even with the mob cash he’ll turn out to be worth less than the money his daddy left him.

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  2. grumpy realist says:

    Trump’s continued fighting over this makes one really wonder what is in those returns….

    My suspicion is that it’s going to show Trump has no money left, and that all his “capital” is actually in real estate with huge debts on them.

    What he’s terrified of is a) he’s going to be shown to be a total loser, financially, and that b) his wife is going to discover she’s never going to get all the lovely moolah she’s been promised and will stomp out, making comments about how T. never could get it up anyway without assistance. C) he’s going to be laughed at by everyone.

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  3. @Teve:

    Actually I don’t think the public will see the returns any time soon

    26 USC 1603, which allows the Ways and Means Committee to get the returns, provides that they still must remain confidential unless the taxpayer authorizes their release to the general public Trump will never do that.

  4. OzarkHillbilly says:

    Heh.

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  5. MarkedMan says:

    My guess is that it’s really public disclosure that would be most problematic for Trump. Trump lies on every deal, inflating assets in many ways including pretending that he “owns” all the buildings with his name on it, etc. If he filed a form showing that his only income from some golf course or hotel is the fee for using his name, but had claimed ownership in order to secure a loan, well, that’s a crime.

  6. michael reynolds says:

    We won’t see the forms, but we’ll get the relevant information. And yes, they’ll probably show what we’ve long-since recognized: that Trump is an empty suit financially.

  7. Kathy says:

    @Doug Mataconis:

    I would bet up to $100 that, should a congressional committee get their hands on Dennison’s returns, at least a part of them will leak to the media.

    Consider. Daniel Ellsberg managed to remove several hefty volumes of Pentagon Papers from a secure office, and to make several copies of them at a time when copiers were scarce, expensive, and rather primitive. Today everyone can make high quality digital scans with their phones. You don’t even need to take the documents out of the office to copy and leak them.

    Hell, if it were me, I’d send copies to Wikileaks as well as Fox News, CNN, the Wall St. Journal, NY Times, Washington Post, Washington Examiner, and let each know whom else got them.

    I wonder whether he doesn’t file jointly with Trophy Wife, and her earnings are higher than his.

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  8. gVOR08 says:

    It seems fairly obvious at this point that Trump’s lawyers are just stalling. They don’t need any arguably valid legal grounds for a challenge. So far, it looks like the judges aren’t having it and are expediting dismissive, even derisive, decisions. It’ll be interesting to see how soon some of this stuff reaches SCOTUS and how they’ll react. Trump seems to think the fix is in there. I’m as cynical as anyone about Republicans, but I suspect even Gorsuch and Kavanaugh won’t touch this.

  9. CSK says:

    Trump is, as a real billionaire observed, “a clown living on credit.”

  10. Kit says:

    @Teve:

    They’re going to show that… he’s being kept afloat by Russian mob money.

    Is there a line for declaring Russian mob money on tax returns?! 🙂

    I’m no accountant, but won’t any shady dealings be hidden in the books of his companies, and not on official returns?

    I rather doubt we will see these returns, and Congress itself will be lucky to find a few hints of where the real investigation should lead. Deutsche Bank probably has the real dirt.

  11. Kathy says:

    @MarkedMan:

    I was thinking that, too, just now, but I thought he might be more concerned about lawsuits.

    It would be great if his tax returns prove he committed fraud. That’s not just a crime, it’s a big-ass felony. And very likely any defense would then be an admission of tax evasion and defrauding the US Treasury, which is also a big-ass felony.

    Still, I don’t think that’s it. I seriously have trouble believing even King Cheeto the First would be so stupid as to enter high-profile politics when that would expose him to various criminal charges.

    Maybe it’s not stupidity but hubris (I’ve been reading Greek mythology lately). In this case the notion that he can handle it, hide it, obfuscate it, or even issue himself a pardon as a last resort.

    But I still don’t think that’s it.

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  12. grumpy realist says:

    @Kathy: but remember Trump never planned to actually WIN the election. He was expecting to lose, rage about it, and ride that rage into a nice cosy media show position where he could continue to feed soundbites to his nitwit audience.

    Then he won, and he’s been going to pieces ever since.

    (Very much like the look on Boris Johnson’s face when he realised the U.K. had actually voted for Brexit. It’s a classic case of a bluffer with the sick realisation that now he has to actually come through with what he promised. Boris has now convinced himself that the EU will in fact rescue the U.K. from “anything going REALLY wrong” so is now gunning for No. 10. He might be surprised. )

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  13. MarkedMan says:

    @Kathy:

    I seriously have trouble believing even King Cheeto the First would be so stupid as to enter high-profile politics when that would expose him to various criminal charges

    This is exactly why three years ago I said that if it looked like he would get the nomination he would drop out. Never underestimate Trump’s appalling stupidity. People who say “Trump’s not stupid” simply mistake his animalistic cunning and ability to ignore humiliation that would devastate a real human being as a intelligence. It’s not.

  14. gVOR08 says:

    @Teve: As Doug notes, we won’t see his returns, a few congress people and staff will see them. But you’re right that if we see anything, it’s likely to be more clown act than smoking gun.

  15. michael reynolds says:

    ‘Stupid psychopath’ was my amateur diagnosis from day one, and I’ve had no reason at all to change that, except to note that he’s actually stupider than I imagined, though some of that now is the decline of age and panic.

    If you think of him as a shark, it’s all quite consistent. Can a shark smell blood from miles away? Yep. Can a shark feel empathy? Nope. Can a shark attack? Yep. Can a shark create? Nope, aside from spawning more sharks. Can a shark reason, read or analyze? Nah. How would a shark be at assembling a cabinet? Better or worse than Trump?

    Q: So, Mr. Jaws, are you working on that big infrastructure plan?
    A: That surfer look like sea lion. Me attack!

    Q: How about opioids, Mr. Jaws, because, you promised and–
    A: Dolphins! Dolphins try get my records! Attack!

    The big question is: what kind of an idiot elects a stupid predator? And how did 46% of voters manage to be that dumb?

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  16. Teve says:

    @gVOR08: I don’t think we’ll get photocopies of his 1040. But a whole lot of federal and state and banking information will get out in at least vague terms. And they’ll show if it weren’t for the Russians he’d be living in a scavenged tent on Skid Row, and even with them, he’s got a few million tops.

  17. Kathy says:

    @grumpy realist:
    @MarkedMan:

    It’s conventional wisdom by now that El Dennison did not intend to win either the nomination or the election. I’ve said it myself a number of times.

    But the evidence is ambiguous. His style of what attempts to pass for governing would fit someone who never intended to win and still doesn’t care for the job, but also a Dunning-Kruger poster boy who thinks he knows better than all experts in every field.

    Likewise his refusal to cede a millimeter rhetorically and at least not actively alienate over half the country, fits both a plan to keep a large audience for future endeavors, and a narcissist who knows he’s always right.

    Also, we have a testable prediction, which can serve to attempt to falsify the hypothesis. And the prediction, that Trump would drop out of the race if it looked like he’d win, has been tested. he did not drop out.

    This isn’t hard science, so it’s not conclusive.

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  18. Gustopher says:

    @Doug Mataconis:

    26 USC 1603, which allows the Ways and Means Committee to get the returns, provides that they still must remain confidential unless the taxpayer authorizes their release to the general public Trump will never do that

    Don’t the House Democrats also have a bunch of subpoenas out to various accountants, lawyers and banks so they will, in theory, have the returns in fourteen different ways.

    I’m not sure that this statute would be the controlling one in that case.

    And, if it is evidence of impeachable offenses, I assume that it would be made public, as part of that.

  19. Gustopher says:

    @Kathy:

    It would be great if his tax returns prove he committed fraud. That’s not just a crime, it’s a big-ass felony. And very likely any defense would then be an admission of tax evasion and defrauding the US Treasury, which is also a big-ass felony.

    Still, I don’t think that’s it. I seriously have trouble believing even King Cheeto the First would be so stupid as to enter high-profile politics when that would expose him to various criminal charges.

    I’m not sure the tax returns on their own even can show fraud. Unless I missed something on my tax forms, there is no spot to enter illegal and fraudulent gains and losses. And, even if there is, I doubt he filled that part in.

    The tax returns would simply point to other things, which then might prove fraud.

    And, yes, he is stupid enough to run for president while committing crimes. He doesn’t even see it as crimes.

  20. Tyrell says:

    @Kathy: I am somewhat betwixt, bewitched, and between about bringing this up, but as I have said before, members of Congress being able to seize someone’s personal records and information sets a concerning precedent and could open the door to abuses. Now some state politicians have mentioned getting the personal records of state officials. Someone who has an ax to grind with the local mayor, police chief, or parking meter reader gets their friend who is a member of the state house or Congress to get the records. Then they post all that on some social media and their personal life is open to all.
    This may seem far fetched and maybe my paranoia, but confidentiality and privacy are getting to be harder to come by. The internet is to blame for a lot of this. Good luck trying to get Google off your cell phone.
    What could some of these people want next? Health records, bank statements, school records, purchases? Are the NY state lawmakers going to release their state returns?
    Again I have mixed feelings about even bringing this up.
    See: “The dangerous precedent of Congress demanding Trump’s tax returns” (Edward Morrissey, “The Week”)
    “If Congress has the power to access any single individual’s taxes for purely partisan reasons – what’s to stop them from coming after yours?” Rep. Brady

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  21. Kathy says:

    @Gustopher:

    The tax returns would simply point to other things, which then might prove fraud.

    Well, yes, I misspoke.

    I’ve no idea what kind of information goes into his tax returns. I know in many places real estate income has tax rules different from other income. For example, in Mexico City the property tax of a rental property depends in part on how much it’s rented for.

    I’m thinking he might have stated a certain value of assets in a loan, say, or an investment prospectus or other type of document, and then a lower value for tax purposes. If so, he was defrauding someone, either the bank or investors, or the IRS.

  22. DrDaveT says:

    @Gustopher:

    And, if it is evidence of impeachable offenses, I assume that it would be made public, as part of that.

    Well… 26 USC 6103 is very explicit and restrictive about who can and cannot see individual tax return information, and under what circumstances. It’s clear that tax return information introduced as evidence in the course of a federal criminal (non-tax) investigation can be disclosed to anyone present in the course of the trial. But that’s a criminal trial — there’s not a peep in 6103 about impeachment proceedings, and the rules restricting what the tax-writing committees can do with the return information they demand from Treasury clearly restrict it to closed executive sessions.

    IANAL, but it looks possible to me that Congress is entitled to have the information, and to act on it in impeachment proceedings, but could not legally make it public.

  23. michael reynolds says:

    @Tyrell:
    I have a simple solution for you. Don’t vote for a mentally unhinged criminal piece of garbage. Yeah, it’s sad what happens when voters don’t do their fucking jobs. So, going forward, do your fucking job.

  24. The abyss says:

    @Tyrell:

    I am somewhat betwixt, bewitched, and between about bringing this up, but as I have said before, members of Congress being able to seize someone’s personal records and information sets a concerning precedent and could open the door to abuses.

    I’m genuinely confused about your feelings of being troubled. As you have noted yourself, you have brought up your concern several times during the past few days. And each time, you have misrepresented the problem (there isn’t one) and the danger to the population at large. Why are you troubled by lying about this issue all of a sudden? Are the geezers down at the diner calling you on your bs?