DC District Court Underscores The Breadth Of Congressional Investigative Authority In New Opinion

• Published date: 29 December 2021
• Subject Matter: Accounting and Audit, Litigation, Mediation & Arbitration, Tax, Audit, Trials & Appeals & Compensation, Tax Authorities
• Law Firm: WilmerHale
• Author: Ms Alyssa DaCunha, Joel Green, Sean Hayes and Anna R. Noone

Last week, in a decision that has a number of important implications for businesses that may find themselves facing a congressional investigation, the US District Court for the District of Columbia dismissed former President Trump's suit seeking to block the Treasury Department from turning over his tax returns to the House Committee on Ways and Means. While the court's opinion focuses in large part on the interplay between congressional oversight and executive privilege, the court reaffirms the broad scope of congressional oversight authority in a way that will likely impact private sector entities as well.

Case Background

In April 2019, House Ways and Means Chairman Richard Neal (D-MA) requested, pursuant to ' 6103(f) of the Internal Revenue Code, tax returns and any associated IRS audit information for then-President Trump and several of his businesses from 2013-2018. Section 6103(f) requires the Treasury Department to provide to the Chairs of the House Ways and Means and the Senate Finance Committees tax return or tax information upon request. The Committees may then place the returns into the congressional record, effectively publishing them, although this is rare.

In making his request, Chairman Neal stated that his purpose was to investigate the extent to which the IRS audits and enforces the federal tax laws under the Presidential Audit Program. Treasury denied the request, alleging that Chairman Neal's stated purpose was pretextual and his true purpose was to publicly disclose the returns, which is not a legitimate legislative purpose. The Committee sued the IRS and Treasury to obtain the returns, and President Trump and his businesses intervened. While the suit was pending, President Biden was inaugurated and Chairman Neal submitted another request, this time for 2015-2020. Treasury and the IRS, having changed leadership under the new Administration, announced their intention to comply with the new request. Now-former President Trump then brought counterclaims and crossclaims against both the Committee and the agencies to prevent disclosure of his and his businesses' returns and associated audit files. In last week's decision, the court rejected those claims and dismissed the case.

The Court's Decision

In its decision, the court notes that 'any action by Congress must be 'related to a valid legislative purpose,'' and indicates that, in practice, this grants Congress very broad jurisdiction. Comm. on Ways and Means, US House of Representatives v....