IRS commissioner stands between Congress and Trump’s tax returns

DONNA BORAK, CNN by DONNA BORAK, CNN

A showdown between the White House and House Democrats over the release of President Donald Trump’s personal tax returns comes down to one man: Charles Rettig, head of the Internal Revenue Service.

Rettig, 62, a veteran California tax attorney, spent more than 35 years representing taxpayers in disputes with federal and state tax agencies until he was sworn in as IRS commissioner last October.

That makes him the only person in Washington with the authority to turn over the President’s personal tax returns under an obscure tax law — though Rettig has argued in hearings that the decision to comply with Democratic requests nonetheless rests with his boss, Treasury Secretary Steven Mnuchin.

Trump has refused to release his returns, first as a candidate and now as president, breaking precedent going back to Watergate. And he has held fast to that argument even after House Ways and Means Committee Chairman Richard Neal of Massachusetts formally asked Rettig to release six years of Trump’s personal tax returns.

The latest deadline is Monday, after Mnuchin asked for more time to consult with Department of Justice lawyers.

Treasury and IRS spokespeople did not immediately respond to a request for comment.

Rettig was not a traditional choice by Trump to run an underfunded bureaucracy with nearly 80,000 employees.

Previous commissioners from the past two decades were picked for their deep business management experience. Rettig’s predecessor, John Koskinen, who left the job in November 2017, spent two decades as an executive of management consulting firm Palmieri Co. His predecessor, Douglas Shulman, a George W. Bush appointee, came to the agency after serving as vice chairman of the Finra, the finance industry self-regulator.

Instead, Rettig, a Beverly Hills lawyer, who earned his economics degree from UCLA and went to Pepperdine University for law school, spent more three decades of his career representing wealthy taxpayers and businesses in complex disputes with the government.

Democrats blasted him during his June confirmation hearing for failing to disclose that he had a stake in two rental units in Hawaii at a Trump-branded hotel. Those ties were resurfaced last week by the Citizens for Responsibility and Ethics in Washington, known as CREW, after disclosure documents showed Rettig earned as much as $1 million in rental income from his Trump-related branded properties while under political pressure to release the President’s tax returns.

Rettig previously noted the existence of those properties on his disclosure form but did not specify that they were located at a Trump-branded hotel. Instead, he described them at the time as a “Honolulu, Hawai’i residential rental property,” according to a memo from committee staff obtained by CNN.

At the same June hearing, Democratic senators also pressed Rettig on whether he would resist political pressure from the White House given the prospect Democrats were likely to demand the President’s tax returns if either chamber seized control after the 2018 midterm elections.

Rettig pledged he would remain independent from the Trump White House during his five-year term, which expires in November 2022, and would serve in an “impartial, unbiased” manner. He renewed his pledge not to cave to political pressure to senators before the same committee last month.

Today, Rettig’s role following Neal’s request for Trump’s tax returns has been blurred by Mnuchin’s intervention in the process, arguing that as Rettig’s boss, the responsibility falls to him to oversee the decision. Mnuchin has also separately asked the Justice Department to review the matter.

Democrats argue that the authority lies solely with Rettig. They claim that Treasury long ago delegated the responsibility to comply with congressional demands by the heads of the respective tax-writing committee to the IRS commissioner. They also argue that any change would require notification to Congress, which hasn’t happened.

“It’s your job and your job alone to respond to Chairman Neal’s request,” Oregon Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, told Rettig at a hearing in April.

Rettig replied, “We are a bureau of the Treasury. We are supervised by Treasury.”

So far, Mnuchin has interceded twice in responding to Democratic congressional demands to release Trump’s tax returns despite directing their request to Rettig.

In his response, Mnuchin has argued the “unprecedented” request raises “serious constitutional issues” that could have dire consequences for taxpayers’ privacy, and has made the case for his oversight of the matter.

“This is a decision that has enormous precedence in potentially weaponizing the IRS,” Mnuchin told reporters in April on the sidelines of the International Monetary Fund annual meeting in Washington.