Tag: United States Department of the Treasury

Sarah Silbiger/The New York Times WASHINGTON — President Trump’s personal lawyer on Monday urged the Treasury Department not to hand over Mr. Trump’s tax returns to House Democrats, warning that releasing the documents to lawmakers he accused of having a “radical view of unchecked congressional power” would turn the Internal Revenue Service into a political weapon. Mr. Neal on Saturday gave the Internal Revenue Service until April 23 to provide him with the tax returns after Steven Mnuchin, the Treasury secretary, said last week that he could not meet an earlier deadline because he needed to study the lawfulness of the request. Mr. Neal used an obscure provision of the tax code to request the returns, which he said his committee needs in order to evaluate the policy of automatic audits of presidential tax returns. Mr. Neal argued in his letter on Saturday that the administration has no authority to question how the committee would handle the information or the validity of its legislative purpose. Mr. Trump’s lawyer, William S. Consovoy, said on Monday that the legal rationale behind Mr. Neal’s dismissal of the Treasury Department’s concerns was wrong. But Mr. Consovoy, echoing an argument that Trump administration officials have made privately, said that in this case the intent of the law is more important than the letter of the law. “Congress’s motives do matter under the Constitution,” Mr. Consovoy wrote, arguing that the request for Mr. Trump’s tax information does not serve any legislative purpose. “This isn’t an issue just about the president’s tax returns and congressional oversight,” Mr. Mnuchin said on the Fox Business Network on Monday. “This is an issue about protecting Americans.” He added: “I want to make sure that the I.R.S. was weaponized.”

Sarah Silbiger/The New York Times A Democratic House chairman on Saturday castigated the Treasury Department for failing to meet his deadline to furnish President Trump’s tax returns, arguing that the administration’s apparent concerns over his use of powers outlined in the Internal Revenue Service’s tax code “lack merit.” The chairman, Representative Richard E. Neal, Democrat of Massachusetts, set a new deadline for compliance, April 23, and warned that if the Trump administration did not reply by then, its “failure will be interpreted as a denial of my request.” The tone of Mr. Neal’s letter suggested Democrats are prepared to take their request — made through a little-known provision in the federal tax code — to court if necessary, initiating what could be a protracted legal fight over Congress’s oversight powers. Moreover, judicial precedent commands that none of the concerns raised can legitimately be used to deny the committee’s request.” The Treasury secretary, Steven Mnuchin, said on Saturday that he had read Mr. Neal’s letter but made no commitments about complying with the request by the new deadline, which he described as “arbitrary.” “I feel a responsibility that we get this right and that the I.R.S. While he said that he would follow the law, he made clear that he had serious concerns about protecting the privacy of the tax returns of all taxpayers, including Mr. Trump. Mr. Trump himself has made abundantly clear he does not intend to relent on his yearslong objections to turning over his tax returns, and his personal lawyer has urged the Treasury Department to fight Mr. Neal’s request. “The committee’s request raises serious issues concerning the constitutional investigative authority, the legitimacy of the asserted legislative purpose and the constitutional rights of American citizens,” Mr. Mnuchin wrote. But no law prevents a taxpayer from releasing returns while under audit, and the I.R.S. Mr. Neal says it is a committee investigation of that mandatory presidential audit policy that necessitates seeing Mr. Trump’s returns. Legal scholars who have studied the provision and Mr. Neal’s request believe that if the Treasury Department does object, it will argue that the Ways and Means chairman has overstepped Congress’s oversight authority by making a request that lacks a legitimate legislative purpose and is meant only to achieve a political end. At the news briefing on Saturday, Mr. Mnuchin defended his decision to oversee the request, noting that the Treasury Department supervises the tax collection agency. “There is no valid basis to question the legitimacy of the committee’s legislative purpose here,” Mr. Neal wrote, citing a 1957 Supreme Court case, Watkins v. United States, as saying Congress’s investigative powers were “broad” and “encompasses inquiries concerning the administration of existing laws as well as proposed or possibly needed statutes.” But legal scholars say that the administration could seek to cite the same 1957 ruling against the committee, because it also holds that while the powers of Congress to investigate are “broad,” they are also “not unlimited.”

Steven Mnuchin, the Treasury secretary, said in a letter to Representative Richard E. Neal, the Democratic chairman of the House Ways and Means Committee, that the Treasury Department’s lawyers needed more time to assess the lawfulness of the request and expressed concern that it would be a violation of taxpayer privacy. “The legal implications of this request could affect protections for all Americans against politically motivated disclosures of tax information, regardless of which party is in power.” Mr. Neal responded to Mr. Mnuchin’s decision with a terse statement that indicated he believed the request was a matter for the Internal Revenue Service, not the Treasury secretary: “I will consult with counsel and determine the appropriate response to the commissioner in the coming days.” Mr. Neal is expected to send a follow-up letter demanding the tax returns and outlining potential next steps, which could include a subpoena or a lawsuit. audit since the 2016 presidential campaign, made clear he would continue to cite that as a reason not to release his tax records, even though no law prevents a taxpayer from releasing returns while under audit. “I have no obligation to do that while under audit and no lawyer would tell you to release your tax returns while you’re under audit.” Mr. Trump’s Treasury Department was facing a midnight deadline to respond to a letter sent last week by Mr. Neal, who issued a formal request for six years of Mr. Trump’s personal and business tax records. Mr. Mnuchin signaled his intention on Tuesday, when he told members of Congress that the president had no legal obligation to make his tax returns public. “Whether it is this party or a different party over time, I take the obligation very seriously to make sure that we follow the law correctly.” But the provision in tax law that Democrats are using appears to give the Trump administration little leeway to resist their request; it says merely that the Treasury secretary “shall” furnish the requested information. It was used several times by House Republicans when they were investigating whether the I.R.S. “Again, believing that he is above the law, Trump is engaged in obstruction.” Republicans praised Mr. Mnuchin’s caution and lashed out at Democrats for what they said was an abuse of power. “Americans didn’t elect their members of Congress to go to Washington to try to dig up harmful information on their political opponents,” said Senator Charles E. Grassley of Iowa, the chairman of the Senate Finance Committee. The tax returns of presidents are automatically audited.

I am not briefed on the full extent of those conversations.” Mr. Mnuchin’s statement sent Democratic congressional aides scrambling to assess whether conversations between the White House and the Treasury Department about Mr. Trump’s taxes represented political interference and violated the law. “The general public when they elected President Trump made the decision to elect him without his tax returns being released,” Mr. Mnuchin said, adding that the president complied with requirements to release a financial disclosure form. While Mr. Mnuchin has been fairly cautious in discussing the request, Mr. Trump and his top advisers have made it increasingly clear that they will not allow the president’s tax returns to be released without a fight. Pressed by Representative Maxine Waters of California, who chairs the House Financial Services Committee, about Mr. Trump’s penchant for firing cabinet members, Mr. Mnuchin said on Tuesday that job security would not be a factor in how he manages the fight for Mr. Trump’s taxes. Last week, Representative Richard E. Neal, the Massachusetts Democrat who leads the House Ways and Means Committee, requested that the I.R.S. “It will never end, but that’s the way life goes!” Mick Mulvaney, the president’s acting chief of staff, said over the weekend that Democrats would “never” obtain the president’s taxes and called their efforts “a political hit job.” Last Friday, Mr. Trump’s personal lawyer asserted Mr. Trump’s right as a citizen to keep his tax returns private and told the Treasury Department not to hand the returns over to House Democrats. If the agency objects to the request or does not answer, Mr. Neal could press his case and warn the agency that House Democrats will view not handing over the documents as a violation of the law. He said he expected Mr. Neal to turn to the courts to try to force compliance with the law. “Mnuchin obviously has a very close relationship with the president, he is very loyal to the president,” Mr. Suozzi said in an interview. audits and enforces the federal tax laws against a president.” Mr. Gibbs noted that the provision Democrats were using to seek Mr. Trump’s returns was drafted when the tax code was being rewritten to improve protection of taxpayer privacy.

The average refund in the second week of the filing season was $1,949, down 8.7 percent from $2,135 a year earlier, according to IRS data released Thursday. The decline may be largely due to how some employees and employers had adjusted the amounts withheld from paychecks to account for changes under the new tax law. Most taxpayers received a tax cut under the law but some may have had too little withheld, resulting in a smaller-than-expected refund, or even money owed to the government. For some lower-income households, it is the biggest cash infusion of the year. SEE ALSO: Free tax prep? Government officials say that doesn't reflect rising or falling tax liability. Social media posts have flared as early filers adjust. "That big refund they've gotten used to - that's a goner now that (President) Trump's tax changes are the law of the land, and many might owe the government money," Wyden said in the Senate last week. President Donald Trump vowed that families would receive an average $4,000 tax cut. Most taxpayers did receive a tax cut.

The average refund in the second week of the filing season ended Feb. 8 was $1,949, down 8.7 percent from $2,135 a year earlier, according to IRS data released Thursday. The decline may be largely due to how some employees and employers had adjusted the amounts withheld from paychecks to account for changes under the new tax law. Most taxpayers received a tax cut under the law but some may have had too little withheld, resulting in a smaller-than-expected refund, or even money owed to the government. For some lower-income households, it is the biggest cash infusion of the year. The Treasury Department believes around 80 percent of taxpayers will see a decrease in their tax bill this year, while about 15 percent will owe roughly the same amount. Public discontent is providing Democrats with fodder for criticism of a tax overhaul they say is beneficial mostly for big corporations and the rich. “Never mind that the current refund numbers are based on only a few days of data or that refund statistics can vary widely from one week to the next,” Grassley said Wednesday on the Senate floor. The Finance Committee’s top Democrat, Sen. Ron Wyden of Oregon, suggested the Trump administration may have schemed to inflate paychecks with the new withholding tables for the tax law, exposing taxpayers to negative surprises as a result. “It sure looks like the Trump administration decided to put politics first, lowball the estimates of how much tax should be withheld from everybody’s paychecks, and lure people into the false sense of security that they’d gotten a big tax cut, courtesy of Donald Trump.” President Donald Trump vowed that families would receive an average $4,000 tax cut. Most taxpayers did receive a tax cut.

Good Tuesday morning. Here are some of the stories making news in Washington and politics today. _____________________ • President Trump, after a call with King Salman of Saudi Arabia, speculated that “rogue killers” might be behind the disappearance of the Saudi journalist Jamal Khashoggi and said he would send Secretary of State Mike Pompeo to meet with the king. Read the story. • Senator Elizabeth Warren of Massachusetts released DNA results showing that she has some Native American ancestry, hitting back at Mr. Trump’s mocking of her claims about her heritage and signaling her intent to run for president in 2020. • Mr. Trump visited Florida on Monday to tour the damage from Hurricane Michael. • The pharmaceutical industry announced that television ads for drugs would direct viewers to websites where they could find information on prescription prices. • The Trump campaign more than doubled its spending over the past three months as the president worked to rev up the Republican base ahead of the midterms. Now, Republicans have taken up her cause. Find out how much money is behind the most competitive House races.

Image WASHINGTON — The Trump administration is considering bypassing Congress to grant a $100 billion tax cut mainly to the wealthy, a legally tenuous maneuver that would cut capital gains taxation and fulfill a long-held ambition of many investors and conservatives. “We are studying that internally, and we are also studying the economic costs and the impact on growth.” Currently, capital gains taxes are determined by subtracting the original price of an asset from the price at which it was sold and taxing the difference, usually at 20 percent. It could also reinforce a liberal critique of Republican tax policy at a time when Republicans are struggling to sell middle-class voters on the benefits of the tax cuts that President Trump signed into law late last year. “Furthermore, Mr. Mnuchin thinks he can do it on his own, but everyone knows this must be done by legislation.” Capital gains taxes are overwhelmingly paid by high earners, and they were untouched in the $1.5 trillion tax law that Mr. Trump signed last year. “It would just be a very generous addition to the tax cuts they’ve already handed to the very wealthy,” said Alexandra Thornton, senior director of tax policy at the liberal Center for American Progress, “and it would play into the hands of their tax advisers, who would be well positioned to take advantage of the loopholes that were opened by it.” The decades-long push to change the taxation of investment income has spurred a legal debate over the original meaning of the word “cost” in the Revenue Act of 1918, and over the authority of the Treasury Department to interpret the word in regulations. Pushing Mr. Trump to make the change, Grover Norquist, the president of Americans for Tax Reform, has cited a 2002 Supreme Court decision in a case between Verizon Communications and the Federal Communications Commission that said regulators have leeway in defining “cost” to make the case that the Treasury Department can act alone. “This would be in terms of its economic impact over the next several years, and long term, similar in size as the last tax cut,” Mr. Norquist said, suggesting that making the change would raise revenue for the government by creating new economic efficiencies and faster growth. “It is unlikely, however, that a significant, or any, effect on economic growth would occur from a stand-alone indexing proposal,” the report said. Michael Graetz, a tax law professor at Columbia University who worked in the Treasury Department’s tax policy office when the department determined that taxing capital gains could not be changed by regulation, said he still thought that the decision to change the law should fall to Congress. “Treasury does not have the unilateral authority to take our tax code and expose it to widespread gamesmanship,” said Senator Ron Wyden of Oregon, the top Democrat on the Finance Committee.

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The Treasury Department announced on Wednesday that it is planning to withdraw estate-tax rules proposed by the Obama administration that were widely opposed by GOP lawmakers and business groups. The department in a report called the rules' approach "unworkable." President Trump ordered the report in April, instructing the Treasury Department to examine tax regulations issued on or after Jan. 1, 2016. In July, Treasury identified eight rules that it found to have an undue burden on taxpayers or add excessive complexity to tax laws. Treasury said in a statement that the department is also working on identifying other rules to potentially revise or repeal. The rules were aimed at preventing wealthy people from avoiding taxes, but Republicans and business groups warned that they would make it harder for people to hand down their companies to their children. Treasury also said that the rules' compliance burdens would have been excessive and that the rules would have been difficult to apply. Treasury also said officials will consider revoking in part or substantially revising other rules, including those aimed at curbing corporate inversions that drew opposition from Republicans and the business community.