[House Report 116-186]
[From the U.S. Government Publishing Office]


                                                Union Calendar No. 144
116th Congress     }                                    {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session       }                                    {      116-186
_______________________________________________________________________

                                     

 

SUBMISSION TO THE U.S. HOUSE OF REPRESENTATIVES OF MATERIALS RELATED TO 
THE EXAMINATION OF PRESIDENT NIXON'S TAX RETURNS BY THE JOINT COMMITTEE 
                      ON INTERNAL REVENUE TAXATION

                               __________

                              R E P O R T

                                 of the

                      COMMITTEE ON WAYS AND MEANS

                        HOUSE OF REPRESENTATIVES

                             together with

                            DISSENTING VIEWS







[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]









                August 16, 2019.--Ordered to be printed


                                  ______


                        U.S. GOVERNMENT PUBLISHING OFFICE 

89-006                         WASHINGTON : 2019 






















                          LETTER OF SUBMITTAL

                              ----------                              

                          House of Representatives,
                               Committee on Ways and Means,
                                   Washington, DC, August 13, 2019.
Hon. Nancy Pelosi,
Speaker, U.S. House of Representatives,
Washington, DC.
    Dear Madam Speaker: On July 25, 2019, by a vote of 25 to 
10, I was directed by the Committee on Ways and Means to submit 
herewith the Committee's report of materials related to the 
examination of President Nixon's tax returns to the U.S. House 
of Representatives. Dissenting views are included.
            Sincerely,
                                           Richard E. Neal,
                                                          Chairman.


















                                                Union Calendar No. 144
116th Congress     }                                    {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session       }                                    {      116-186

======================================================================

 
SUBMISSION TO THE U.S. HOUSE OF REPRESENTATIVES OF MATERIALS RELATED TO 
THE EXAMINATION OF PRESIDENT NIXON'S TAX RETURNS BY THE JOINT COMMITTEE 
                      ON INTERNAL REVENUE TAXATION

                                _______
                                

August 16, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Neal, from the Committee on Ways and Means, submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

    The Committee on Ways and Means, to whom were provided 
materials related to the examination of President Nixon's tax 
returns by the Joint Committee on Internal Revenue Taxation 
(now the Joint Committee on Taxation), having considered the 
same, submits the following report of such materials to the 
U.S. House of Representatives.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The Committee on Ways and Means (``Committee'') recently 
met in closed executive session to consider materials protected 
by 26 U.S.C. Sec. 6103 related to Senate Report 93-768, 
``Examination of President Nixon's Tax Returns for 1969 through 
1972,'' prepared for the Joint Committee on Internal Revenue 
Taxation (now the Joint Committee on Taxation (``JCT'')) by its 
staff. By a vote of 25 to 10, the Committee voted to submit 
those materials to the U.S. House of Representatives.

                 B. Background on the Committee's Work

    The Committee has oversight and legislative authority over 
our Federal tax laws. With this authority comes a 
responsibility to ensure that the Internal Revenue Service 
(``IRS'') is enforcing the laws in a fair and impartial manner.
    Consistent with its authority, the Committee is considering 
legislative proposals and conducting oversight related to our 
Federal tax laws, including, but not limited to, the extent to 
which the IRS audits and enforces the Federal tax laws against 
a President. Under the Internal Revenue Manual, individual 
income tax returns of a President are subject to mandatory 
examination, but this practice is IRS policy and not codified 
in the Federal tax laws. It is necessary for the Committee to 
determine the scope of any such examination and whether it 
includes a review of open tax years or underlying business 
activities required to be reported on the individual income tax 
return.
    Accordingly, on April 3, 2019, Chairman Neal requested 
relevant individual income tax returns and return information 
of the President and certain entities from the IRS. This 
request was made pursuant to the Chairman's authority under 
section 6103(f)(1) of the Internal Revenue Code and required 
that documents be provided by April 10, 2019. On May 6, 2019, 
the Secretary of the Treasury, who stated that he was 
supervising the handling of this matter by the IRS, denied the 
Committee's lawful request in reliance on advice from the U.S. 
Department of Justice.
    On May 10, 2019, Chairman Neal issued subpoenas to the 
Secretary of the Treasury and the IRS Commissioner for the tax 
returns and return information that had been requested on April 
3. The subpoena required that documents be provided by May 17, 
2019. The Secretary and Commissioner refused to provide the 
subpoenaed documents, relying on the same advice from the U.S. 
Department of Justice. On July 2, 2019, the Committee filed a 
lawsuit in the United States District Court for the District of 
Columbia to enforce the subpoenas and the document request made 
under section 6103.
    On multiple occasions, the Secretary did offer to provide 
the Committee a briefing on the Presidential audit process in 
lieu of producing the requested tax returns and return 
information. On June 10, 2019, eight officials from the IRS and 
U.S. Department of the Treasury (``Treasury'') briefed eight 
bipartisan Committee staff on the Presidential audit procedures 
outlined in the Internal Revenue Manual. In anticipation of the 
briefing, Committee staff prepared hundreds of questions for 
IRS and Treasury, including many questions about how the 
mandatory audit process has been applied to Presidents, both 
current and former. To facilitate a meaningful meeting, 
pursuant to the Chairman's authority under section 6103(f)(4), 
the Chairman designated all Majority and Minority staff present 
at the briefing as his agents for purposes of receiving 
confidential taxpayer information.
    Despite the Chairman's designation, which had been 
transmitted to the IRS and Treasury in advance, officials 
declined to answer all specific questions about actual audits. 
This included declining to answer basic questions about whether 
Presidential returns have ever been filed electronically, how 
long Presidential audits generally take, whether there ever 
have been any assessments of tax made to Presidential returns, 
or whether any President-taxpayers have ever gone to IRS 
Appeals from a mandatory audit. In fact, of the eight Treasury 
and IRS officials sent to the briefing, none had ever been 
involved in a mandatory Presidential audit, evidencing 
Treasury's lack of intent to provide a meaningful briefing.
    In the absence of historical information from Treasury and 
the IRS, the Committee has looked to other sources for 
information about past Presidential audits, as well as about 
Congress' prior use of section 6103 to obtain tax returns and 
return information. To the Committee's knowledge, there is only 
one President for whom information about the audit of returns 
is publicly available-President Richard Nixon. In the early 
1970s, JCT conducted a comprehensive examination of President 
Nixon's returns and released a report of its findings. Also, 
according to an IRS memorandum provided to Committee staff 
during the June 10 briefing, the IRS implemented procedures for 
the handling of Presidential returns because of issues that 
arose regarding President Nixon. Therefore, in furtherance of 
the Committee's ongoing work concerning the Presidential audit 
process, the Chairman asked the Chief of Staff of JCT to review 
JCT files of its investigation of President Nixon's returns to 
determine if, at that time, JCT staff sought and received, 
under its legal authority, confidential taxpayer information 
directly from the IRS.

               II. EXPLANATION OF THE SUBMITTED MATERIALS


                A. Background on the Submitted Materials

    In 1973, issues related to President Nixon's tax compliance 
became a matter of public concern. President Nixon generally 
denied any impropriety and released a letter from the IRS 
noting that his returns were accepted as filed and 
complimenting him for the care taken in preparing his returns. 
However, as the controversy continued, President Nixon 
voluntarily made public his income tax returns for the years he 
served as President--1969, 1970, 1971, and 1972--and requested 
that JCT (then called the Joint Committee on Internal Revenue 
Taxation) review the returns with respect to two issues.
    JCT decided to conduct a comprehensive examination of 
President Nixon's income tax returns for the years 1969 through 
1972, not limited to only the two issues identified by the 
President. In its investigative report from 1974, JCT staff 
noted that ``so many questions have been raised about the tax 
returns of the President for these years that the committee 
believed the general public can only be satisfied by a thorough 
examination of the President's taxes.'' The report stated that, 
though public discussion had focused largely on two issues, 
``broader examination was necessary in part because various 
items on a tax return are often so interrelated that 
distortions result if a comprehensive review is not made.'' 
Accordingly, JCT staff ``conducted approximately 30 interviews 
with persons involved in different aspects of the President's 
tax matters,'' ``made contact with numerous other possible 
sources of information,'' ``sent staff members to California to 
consider various tax issues,'' ``sent staff personnel to New 
York to carry out the examination,'' ``received numerous 
investigations made by [IRS] personnel,'' and ``employed 
experts to help it appraise the value of San Clemente 
property.''
    It had been assumed by many, including Members of the 
Committee, that JCT did not obtain confidential taxpayer 
information from the IRS and solely relied on taxpayer 
information voluntarily released by President Nixon. In fact, 
two Committee reports from the 115th Congress (H. Rept. 115-73 
and H. Rept. 115-309), related to resolutions of inquiry 
directing Treasury to provide certain returns of the President 
to the House of Representatives, stated the following: ``Some 
Members have suggested there is a precedent for this--that tax-
writing committees used the authority granted under Section 
6103(f) to access and review President Nixon's tax returns in 
1973. However, such assertions are not supported by the facts. 
The facts are these: President Nixon voluntarily released his 
own tax returns[.]''
    The 1974 JCT report contains numerous statements indicating 
that JCT actually may have used its statutory authority to 
request and receive from the IRS tax returns and return 
information of President Nixon in connection with the audit. 
For example, the report states: ``The staff has examined the 
President's tax returns and/or accountant's work papers for the 
years 1964 through 1968 and has confirmed or is satisfied that 
maintenance expenses were taken as business deductions for each 
of these years.'' These years predate the returns publicly 
released by President Nixon and also his term as President. 
Other statements in the report also indicate that JCT staff 
reviewed return information for tax years and taxpayers beyond 
that included in the material publicly released by President 
Nixon.
    Further, in a statement delivered on the House floor 
regarding the report, the Honorable Wilbur Mills, then-Vice 
Chairman of JCT and Chairman of the Committee on Ways and 
Means, stated:

          ``Mr. Speaker, I am transmitting to the House today, 
        and Senator Long is transmitting to the Senate, for the 
        Joint Committee on Internal Revenue Taxation the 
        following staff report, which represents an analysis of 
        the President's tax returns for the years 1969-1972.
          There is a provision of law in the Internal Revenue 
        Code which says that the committee cannot release 
        information obtained with respect to a taxpayer's 
        return until a report has been filed with the Congress. 
        We are proceeding to abide by that provision of law, by 
        now filing the report with the House, so it can 
        subsequently be released to the public.
          [W]e are here and concerned about a provision of the 
        Internal Revenue Code. Anyone who should release any of 
        this information prior to its submission to the House 
        would be guilty of having committed a crime.''

These statements strongly indicate that the JCT report 
contained confidential taxpayer information obtained directly 
from the IRS.

               B. Description of the Submitted Materials

    As discussed above, the Chairman recently asked the Chief 
of Staff of JCT to review JCT files of its investigation of 
President Nixon's returns. Specifically, the Chairman's letter 
to the JCT Chief of Staff stated: ``I request that you review 
available records and files of the Joint Committee related to 
the investigation and report whether you can state that the 
Joint Committee staff sought and received, under its legal 
authority, confidential information directly from the Internal 
Revenue Service.''
    In researching the Chairman's request, JCT staff confirmed 
that, in 1973 and 1974, the then-JCT Chief of Staff made 
various requests to the IRS for confidential taxpayer 
information of President Nixon and others. The current JCT 
Chief of Staff concluded that, based on his review of 
materials, ``the Joint Committee staff sought and received, 
under its legal authority, confidential information directly 
from the Internal Revenue Service that was used in the analysis 
presented in the report.'' While it is true that President 
Nixon voluntarily disclosed his returns for tax years 1969 
through 1972, JCT additionally sought from the IRS: (1) 
President Nixon's returns for prior tax years (1963 through 
1968), (2) authenticated copies of the returns voluntarily 
disclosed (1969 through 1972), and (3) returns for additional 
taxpayers. Where records were available, the IRS complied with 
JCT's requests without delay or objection, and as evidenced by 
the materials submitted, JCT received from the IRS copies of 
the President's returns for tax years 1966 through 1972.
    The following materials were reviewed by the Committee in 
closed executive session on July 25, 2019:
    I. Letter dated July 23, 2019 from Chairman Richard E. Neal 
to JCT's Chief of Staff, Mr. Thomas A. Barthold, requesting 
that JCT review available records and files and report whether 
JCT staff sought and received, under its legal authority, 
confidential information directly from the IRS related to its 
investigation of President Nixon's returns.
    II. Letter dated July 23, 2019 from JCT's Chief of Staff, 
Mr. Thomas A. Barthold, to Chairman Richard E. Neal, concluding 
that JCT staff sought and received, under its legal authority, 
confidential information directly from the IRS and enclosing 
two sets of documents to substantiate such conclusion. The 
enclosed documents include:
          A. Selected pages from the JCT staff report on 
        President Nixon that highlighted pertinent statements 
        indicating that the staff reviewed return information 
        for tax years and taxpayers beyond that included in the 
        publicly released report.
          B. JCT Correspondence
                  1. Letter dated December 13, 1973 from JCT's 
                Chief of Staff, Dr. Laurence N. Woodworth, to 
                the IRS Commissioner, the Honorable Donald C. 
                Alexander, requesting authenticated copies of 
                President Nixon's returns for tax years 1968 
                through 1972.
                  2. Letter dated December 13, 1973 from the 
                IRS Commissioner, the Honorable Donald C. 
                Alexander, to JCT's Chief of Staff, Dr. 
                Laurence N. Woodworth, accompanying the 
                transmittal of copies of President Nixon's 
                returns for tax years 1968 through 1972 
                (without attachments provided by the 
                Commissioner).
                  3. Letter dated January 31, 1974 from JCT's 
                Chief of Staff, Dr. Laurence N. Woodworth, to 
                the IRS Commissioner, the Honorable Donald C. 
                Alexander, requesting copies of President 
                Nixon's returns for tax years 1963 through 1967 
                and copies of returns of certain other 
                taxpayers.
                  4. Letter dated February 11, 1974 from the 
                IRS Commissioner, the Honorable Donald C. 
                Alexander, to JCT's Chief of Staff, Dr. 
                Laurence N. Woodworth, accompanying the 
                transmittal of copies of President Nixon's 
                returns for tax years 1966 and 1967 and 
                explaining that copies of President Nixon's 
                returns for years earlier than 1966 had been 
                destroyed in accordance with the IRS's regular 
                procedures (without enclosures provided by the 
                Commissioner).
                  5. Letter dated March 30, 1974 from JCT's 
                Chief of Staff, Dr. Laurence N. Woodworth, to 
                Senator Carl T. Curtis, a JCT Member, providing 
                confidential material that was taken from a 
                taxpayer's return and noting that unauthorized 
                disclosure would be subject to penalties of law 
                (without attachments provided by Dr. 
                Woodworth).
The Committee did not receive any tax returns from JCT as part 
of this effort. By a vote of 25 to 10, the Committee voted on 
July 25, 2019 to submit these materials to the U.S. House of 
Representatives.

                      III. VOTES OF THE COMMITTEE

    The following statement is made concerning the votes of the 
Committee on Ways and Means during the consideration of the 
materials reviewed in closed executive session on July 25, 
2019.
    A motion, pursuant to clause 2(g)(1) of House Rule 11, that 
the Committee proceed to executive session offered by Mr. Neal 
was agreed to by a roll call vote of 22 yeas and 17 nays. The 
vote was as follows:

----------------------------------------------------------------------------------------------------------------
          Representative             Yea      Nay     Present      Representative      Yea      Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Neal.........................       X   .......  .........  Mr. Brady..........  .......       X   .........
Mr. Lewis........................       X   .......  .........  Mr. Nunes..........  .......       X   .........
Mr. Doggett......................  .......       X   .........  Mr. Buchanan.......  .......       X   .........
Mr. Thompson.....................       X   .......  .........  Mr. Smith..........  .......       X   .........
Mr. Larson.......................       X   .......  .........  Mr. Marchant.......  .......       X   .........
Mr. Blumenauer...................       X   .......  .........  Mr. Reed...........  .......       X   .........
Mr. Kind.........................       X   .......  .........  Mr. Kelly..........  .......       X   .........
Mr. Pascrell.....................       X   .......  .........  Mr. Holding........  .......       X   .........
Mr. Davis........................       X   .......  .........  Mr. Smith..........  .......       X   .........
Ms. Sanchez......................       X   .......  .........  Mr. Rice...........  .......       X   .........
Mr. Higgins......................  .......  .......  .........  Mr. Schweikert.....  .......       X   .........
Ms. Sewell.......................  .......  .......  .........  Ms. Walorski.......  .......       X   .........
Ms. DelBene......................       X   .......  .........  Mr. LaHood (IL)....  .......       X   .........
Ms. Chu (CA).....................       X   .......  .........  Mr. Wenstrup.......  .......       X   .........
Ms. Moore........................       X   .......  .........  Mr. Arrington......  .......       X   .........
Mr. Kildee.......................       X   .......  .........  Mr. Ferguson.......  .......       X   .........
Mr. Boyle........................       X   .......  .........  Mr. Estes..........  .......       X   .........
Mr. Beyer........................       X
Mr. Evans........................       X
Mr. Schneider....................       X
Mr. Suozzi.......................       X
Mr. Panetta......................       X
Ms. Murphy.......................       X
Mr. Gomez........................       X
Mr. Horsford.....................       X
----------------------------------------------------------------------------------------------------------------

    A motion offered by Mr. Thompson to table Mr. Brady's 
motion to postpone to a date certain was agreed to by 23 yeas 
and 17 nays. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
          Representative             Yea      Nay     Present      Representative      Yea      Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Neal.........................       X   .......  .........  Mr. Brady..........       X   .......  .........
Mr. Lewis........................       X   .......  .........  Mr. Nunes..........       X   .......  .........
Mr. Doggett......................       X   .......  .........  Mr. Buchanan.......       X   .......  .........
Mr. Thompson.....................       X   .......  .........  Mr. Smith..........       X   .......  .........
Mr. Larson.......................       X   .......  .........  Mr. Marchant.......       X   .......  .........
Mr. Blumenauer...................       X   .......  .........  Mr. Reed...........       X   .......  .........
Mr. Kind.........................       X   .......  .........  Mr. Kelly..........       X   .......  .........
Mr. Pascrell.....................       X   .......  .........  Mr. Holding........       X   .......  .........
Mr. Davis........................       X   .......  .........  Mr. Smith..........       X   .......  .........
Ms. Sanchez......................       X   .......  .........  Mr. Rice...........       X   .......  .........
Mr. Higgins......................  .......  .......  .........  Mr. Schweikert.....       X   .......  .........
Ms. Sewell.......................  .......  .......  .........  Ms. Walorski.......       X   .......  .........
Ms. DelBene......................       X   .......  .........  Mr. LaHood (IL)....       X   .......  .........
Ms. Chu (CA).....................       X   .......  .........  Mr. Wenstrup.......       X   .......  .........
Ms. Moore........................       X   .......  .........  Mr. Arrington......       X   .......  .........
Mr. Kildee.......................       X   .......  .........  Mr. Ferguson.......       X   .......  .........
Mr. Boyle........................       X   .......  .........  Mr. Estes..........       X   .......  .........
Mr. Beyer........................       X   .......  .........
Mr. Evans........................       X   .......  .........
Mr. Schneider....................       X   .......  .........
Mr. Suozzi.......................       X   .......  .........
Mr. Panetta......................       X   .......  .........
Ms. Murphy.......................       X   .......  .........
Mr. Gomez........................       X   .......  .........
Mr. Horsford.....................       X   .......  .........
----------------------------------------------------------------------------------------------------------------

    A motion was made by Mr. Neal to move the previous 
question. The motion was agreed to by a roll call vote of 25 
yeas and 10 nays. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
          Representative             Yea      Nay     Present      Representative      Yea      Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Neal.........................       X   .......  .........  Mr. Brady..........       X   .......  .........
Mr. Lewis........................       X   .......  .........  Mr. Nunes..........       X   .......  .........
Mr. Doggett......................       X   .......  .........  Mr. Buchanan.......  .......  .......  .........
Mr. Thompson.....................       X   .......  .........  Mr. Smith..........  .......  .......  .........
Mr. Larson.......................       X   .......  .........  Mr. Marchant.......  .......  .......  .........
Mr. Blumenauer...................       X   .......  .........  Mr. Reed...........       X   .......  .........
Mr. Kind.........................       X   .......  .........  Mr. Kelly..........       X   .......  .........
Mr. Pascrell.....................       X   .......  .........  Mr. Holding........  .......  .......  .........
Mr. Davis........................       X   .......  .........  Mr. Smith..........  .......  .......  .........
Ms. Sanchez......................       X   .......  .........  Mr. Rice...........  .......  .......  .........
Mr. Higgins......................       X   .......  .........  Mr. Schweikert.....       X   .......  .........
Ms. Sewell.......................       X   .......  .........  Ms. Walorski.......       X   .......  .........
Ms. DelBene......................       X   .......  .........  Mr. LaHood (IL)....       X   .......  .........
Ms. Chu (CA).....................       X   .......  .........  Mr. Wenstrup.......  .......  .......  .........
Ms. Moore........................       X   .......  .........  Mr. Arrington......       X   .......  .........
Mr. Kildee.......................       X   .......  .........  Mr. Ferguson.......       X   .......  .........
Mr. Boyle........................       X   .......  .........  Mr. Estes..........       X   .......  .........
Mr. Beyer........................       X   .......  .........
Mr. Evans........................       X   .......  .........
Mr. Schneider....................       X   .......  .........
Mr. Suozzi.......................       X   .......  .........
Mr. Panetta......................       X   .......  .........
Ms. Murphy.......................       X   .......  .........
Mr. Gomez........................       X   .......  .........
Mr. Horsford.....................       X   .......  .........
----------------------------------------------------------------------------------------------------------------

    A motion by Ms. Sanchez that the Committee submit to the 
House of Representatives the letter from the Joint Committee on 
Taxation and attachments was agreed to by a roll call vote of 
25 yeas to 10 nays. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
          Representative             Yea      Nay     Present      Representative      Yea      Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Neal.........................       X   .......  .........  Mr. Brady..........  .......       X   .........
Mr. Lewis........................       X   .......  .........  Mr. Nunes..........  .......       X   .........
Mr. Doggett......................       X   .......  .........  Mr. Buchanan.......  .......  .......  .........
Mr. Thompson.....................       X   .......  .........  Mr. Smith (NE).....  .......  .......  .........
Mr. Larson.......................       X   .......  .........  Mr. Marchant.......  .......  .......  .........
Mr. Blumenauer...................       X   .......  .........  Mr. Reed...........  .......       X   .........
Mr. Kind.........................       X   .......  .........  Mr. Kelly..........  .......       X   .........
Mr. Pascrell.....................       X   .......  .........  Mr. Holding........  .......  .......  .........
Mr. Davis........................       X   .......  .........  Mr. Smith (MO).....  .......  .......  .........
Ms. Sanchez......................       X   .......  .........  Mr. Rice...........  .......  .......  .........
Mr. Higgins......................       X   .......  .........  Mr. Schweikert.....  .......       X   .........
Ms. Sewell.......................       X   .......  .........  Ms. Walorski.......  .......       X   .........
Ms. DelBene......................       X   .......  .........  Mr. LaHood.........  .......       X   .........
Ms. Chu..........................       X   .......  .........  Mr. Wenstrup.......  .......  .......  .........
Ms. Moore........................       X   .......  .........  Mr. Arrington......  .......       X   .........
Mr. Kildee.......................       X   .......  .........  Mr. Ferguson.......  .......       X   .........
Mr. Boyle........................       X   .......  .........  Mr. Estes..........  .......       X   .........
Mr. Beyer........................       X   .......  .........
Mr. Evans........................       X   .......  .........
Mr. Schneider....................       X   .......  .........
Mr. Suozzi.......................       X   .......  .........
Mr. Panetta......................       X   .......  .........
Ms. Murphy.......................       X   .......  .........
Mr. Gomez........................       X   .......  .........
Mr. Horsford.....................       X   .......  .........
----------------------------------------------------------------------------------------------------------------

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                                     

                            DISSENTING VIEWS

    Committee Republicans vehemently oppose the Committee's 
action of holding a secretive executive session meeting on July 
25, 2019, and voting to release documents that were previously 
protected as confidential under section 6103 of the Internal 
Revenue Code.\1\ Committee Republicans oppose both the 
secretive process leading up to the meeting and the substance 
of the meeting itself.
---------------------------------------------------------------------------
    \1\26 U.S.C. Sec. 6103 (2019).
---------------------------------------------------------------------------
    The Chairman announced the meeting on July 23, 2019, to be 
held on July 25, 2019, but only provided a cryptic description 
indicating that the purpose of the meeting would be to consider 
``Historical documents protected under Internal Revenue Code 
section 6103.'' No additional information was provided in 
advance. Committee Members on both sides of the aisle had no 
idea what historical documents they would be reviewing during 
the meeting. Committee Members were not given the opportunity 
to review the materials prior to the meeting, as has been 
Committee practice during previous executive session meetings.
    For example, during the last executive session by the 
Committee, held on April 9, 2014, then Chairman Dave Camp (R-
MI) gave members twenty-four hours prior to the meeting to 
review the materials they would be voting on which related to 
the Lois Lerner criminal referral. Additionally, both 
Republican and Democrat Members and staff participated in the 
more than 10-month long investigation which included more than 
60 transcribed interviews and review of 660,000 pages of 
documents. This transparency helped Members digest the 
information, which allowed time for thoughtful analysis prior 
to the executive session. Sadly, none of these steps were taken 
leading up to or during last week's executive session meeting 
where the Committee Democrats voted to make public documents 
related to an audit by the Joint Committee on Taxation (JTC) of 
President Nixon's tax returns (the Nixon Materials). As a 
result, the press published a variety of wild assertions and 
speculation about the true purpose and subject of the executive 
session.\2\
---------------------------------------------------------------------------
    \2\Brian Faler, Even Members Seem in the Dark about Hush-Hush Ways 
and Means Huddle, PoliticoPro (July 24, 2019, 5:28 PM) (citing Democrat 
Members of Congress describing the executive session as an opportunity 
to update Members on their legal fight for the President's tax 
returns); Kaustuv Basu and Colin Wilhelm, House Dems May Boost Trump 
Tax Return Argument in Closed Session, Bloomberg Tax (July 24, 2019, 
4:57 PM) (citing a House aide stating that the documents could help 
with legal arguments in support of the accessing the President's tax 
returns); Bernie Becker, Getting Historical, Politico Morning Tax (July 
25, 2019, 10:00 AM) (quoting the Chairman as describing the proceedings 
as ``good'' and newsworthy'').
---------------------------------------------------------------------------
    Once the Chairman began the executive session portion of 
the meeting, he announced that Members would receive only 
fifteen minutes to review the Nixon Materials. While the 
Chairman characterized the materials for review as only a few 
paragraphs, Members were actually presented with a packet of 
twenty pages of documents. After Committee Democrats voted down 
a motion to extend the review time from fifteen minutes to two 
hours, Committee Republicans secured an agreement from the 
Chairman to allow one hour for review. Although an improvement 
from fifteen minutes, this amount of time was insufficient for 
a thorough review and analysis of the materials.
    Not providing Members a chance to review the materials 
prior to the executive session meeting or providing sufficient 
time during the meeting itself presented significant problems 
and led to a chaotic meeting. At the outset, Members were asked 
to accept the agency of the Chairman and told that once they 
accepted Sec. 6103 information, they would be subject to 
substantial liability if they were to disclose any aspect of 
the protected materials. The willful, unauthorized disclosure 
of a tax return or tax return information is a felony, 
punishable under Internal Revenue Code section 7213 by up to 
five years imprisonment, a fine of not exceeding $5,000, or 
both, together with the costs of prosecution.\3\ Some Members 
were understandably uncomfortable accepting the Chairman's 
agency and the potential criminal liability risk without any 
indication as to the purpose of the meeting or the nature of 
the materials. As a result, some Members left without 
participating.
---------------------------------------------------------------------------
    \3\26 U.S.C. Sec. 7213(a) (2019).
---------------------------------------------------------------------------
    Another concern with the process was with the lack of 
participation by JCT, which typically provides Members 
nonpartisan technical advice and expertise on various tax 
issues. No members of JCT staff appeared at the meeting, nor 
were they available for questioning. JCT staff compiled and 
provided the materials to the Chairman and, therefore, were in 
the best position to speak to them. This was particularly 
surprising because JCT's presence is standard practice for 
Committee business meetings when tax information with which JCT 
is familiar is considered. JCT usually answers technical 
questions so that Members can better understand the materials 
prior to voting.
    Finally, the executive session meeting was scheduled on the 
last day prior to a six-week House recess and on an already 
incredibly busy day for the Committee. Squeezed in between a 
full committee hearing on Social Security, a Rural and 
Underserved Communities Health Task Force meeting, and House 
Floor votes, the executive session meeting was extremely 
rushed. Members were simply not given the enough time to 
thoughtfully consider the materials and come to a reasoned 
decision on how best to proceed. Indeed, after taking an hour 
to review the Nixon Materials, many Republican Members were 
still wrestling with the context and purpose of the documents. 
Given the rushed time frame, however, Democrat Members 
repeatedly interrupted Republican Member deliberations and the 
Chairman appeared ready to continue the proceeding without any 
Republican Members participating. Even after the proceeding 
concluded, most Members had no idea what information could and 
could not be shared. No guidance was provided.
    In all, the executive session meeting was a failure in 
planning and execution. Members were ultimately asked to vote 
to publicly release information without sufficient time to 
review, analyze, digest, and discuss whether public disclosure 
was appropriate and desirable. Several Republican Members 
declined to participate in this unfair and secretive process 
due in large part to a lack of transparency and advanced notice 
of the materials to be evaluated. The Members that did 
participate were left no choice but to vote no on public 
disclosure given the lack of time for review and their 
inability to ask questions of JCT staff. The chaotic nature of 
the meeting represented the worst of the House of the 
Representatives. As Committee Republicans noted, the process 
for carrying out the executive session was below the dignity of 
the Ways and Means Committee and should not be replicated or 
repeated.

  NO JOINT COMMITTEE ON TAXATION STAFF WERE AVAILABLE FOR QUESTIONING

    The executive session meeting and the Nixon Materials that 
have now been publicly released place JCT at the center of the 
matter. The materials show that JCT staff provided the 
documents to the Chairman and the documents relate to JCT work 
done in the 1970s. As discussed above, no members of JCT staff 
attended the executive session meeting. Given JCT's central 
role in relation to the documents at issue, and the number of 
questions Committee Republicans have for JCT, it was 
disappointing that JCT was not made available during the 
executive session meeting. Following the meeting, Ranking 
Member Kevin Brady (R-TX) sent a letter to JCT on July 26, 
2019, with an initial set of questions Committee Republicans 
would have asked if they had been given the opportunity; a copy 
of that letter is attached as Attachment A. JCT's response 
letter is attached as Attachment B.

         THE NIXON MATERIALS LIKELY SHOW CONSENT NOT COMPULSION

    In 1973, President Nixon voluntarily asked that JCT examine 
his tax returns. Committee Democrats argue that certain related 
documents establish some precedent for their politically 
motivated attempt to weaponize the tax code and publicize 
President Trump's tax returns. This is not so. The two matters 
are entirely distinguishable and attempts to connect them are 
misleading.
    President Nixon initiated the JCT examination of his tax 
returns voluntarily and without any legislative purpose. 
Instead, the purpose of President Nixon's action was to answer 
specific questions that had been raised in the press and ``to 
dispel public doubts.''\4\
---------------------------------------------------------------------------
    \4\Joint Comm. on Internal Revenue Taxation, Examination of 
President Nixon's Tax Returns for 1969 through 1972, JCS 9-74 (93rd 
Cong. 1974).
---------------------------------------------------------------------------
    To date, there is no evidence that the audit work by JCT 
required the use of its authority under Sec. 6103 or any other 
statute.\5\ President Nixon asked the committee to conduct an 
examination and the committee agreed to undertake that work. 
Although Mr. Barthold stated in his July 23 letter to Chairman 
Neal that JCT ``sought and received, under its legal authority, 
confidential information directly from the Internal Revenue 
Service,'' in his July 29 letter to Ranking Member Brady, Mr. 
Barthold indicated that he did not have access to all records 
necessary to confirm that consent to the disclosure of tax 
returns was not provided by President Nixon (or his 
attorneys).\6\ The July 29 letter further indicates that there 
is evidence that certain additional private tax information was 
provided voluntarily by President Nixon's accountant.\7\ This 
makes sense given that President Nixon stated that the JCT 
would have ``full access to all relevant documents pertaining 
to these matters and will have the full cooperation of my 
office.''\8\
---------------------------------------------------------------------------
    \5\26 U.S.C. Sec. 6103 (d)(1) (1974).
    \6\Letter from Thomas Barthold, Chief of Staff, Joint Comm. on 
Taxation, to the Hon. Kevin Brady, Ranking Member, Comm. on Ways and 
Means (July 29, 2019).
    \7\Id.; see also, Joint Comm. on Internal Revenue Taxation, 
Examination of President Nixon's Tax Returns for 1969 through 1972, JCS 
9-74 at 118 n. 13 (93rd Cong. 1974).
    \8\Joint Comm. on Internal Revenue Taxation, Examination of 
President Nixon's Tax Returns for 1969 through 1972, JCS 9-74 (93rd 
Cong. 1974).
---------------------------------------------------------------------------
    President Nixon's statement providing full access to all 
relevant documents makes clear that he expected that the JCT 
may need additional information to complete the examination, 
such as tax returns and tax return information prior to 1969 
and accountant work papers. The 1973 and 1974 letters between 
JCT and the Internal Revenue Service (IRS), which the Committee 
voted to publicly release during the executive session meeting 
on July 25, 2019, substantiate JCT carrying out this agreement. 
Given the voluntary nature of President Nixon's request to JCT, 
it is highly likely that President Nixon's representatives were 
involved in conversations with JCT to make accommodations to 
allow JCT to gather the information it needed. In addition, IRS 
procedures specify that reviewing related returns is part of 
its normal audit process and would be expected from JCT, as the 
transactions in question may have been related to line items 
from returns prior to 1969.\9\ Reviewing limited line items on 
returns prior to 1969 would have allowed JCT to check for 
consistency across the returns, which is a standard IRS 
auditing practice.
---------------------------------------------------------------------------
    \9\Internal Revenue Manual, 4.10.5.4, Related and Spin-Off Returns.
---------------------------------------------------------------------------
    As the above example indicates, the Chairman's current 
request for President Trump's tax returns differs markedly from 
the circumstances surrounding President Nixon's returns. 
President Nixon consented to releasing his returns, President 
Trump has not. JCT had approval from President Nixon to seek 
additional tax-related information, if necessary, as part of 
their review. The publicly released letters between JCT and IRS 
in 1973 and 1974 do not set a precedent for Chairman Neal's 
request for President Trump's tax returns. The two situations 
make for nothing but an apples and oranges comparison.
    Chairman Neal's request continues to a be an effort to 
weaponize the tax code and publicly release President Trump's 
tax returns for political purposes. President Trump has not 
consented to the release of his private tax return information 
and the Committee has no legitimate legislative purpose to 
justify its request under Sec. 6103.

       THE NIXON MATERIALS DO NOT ESTABLISH A Sec. 6103 PRECEDENT

    Committee Democrats' attempt to find a precedent for their 
illegitimate request for President Trump's tax returns fails 
for two additional reasons. First, neither JCT nor the IRS 
referenced Sec. 6103 in any of the Nixon materials publicly 
released on July 25, 2019. And second, Congress made 
significant changes to Sec. 6103 in 1976.
    The Nixon Materials, specifically the 1973 and 1974 letters 
provided by JCT, do not cite to any statutory authority at all 
in conjunction with the requests to the Internal Revenue 
Service. It is unclear what, if any, statutory authority JCT 
relied on when making the requests or on what authority IRS 
relied on in fulfilling them. Given that President Nixon 
requested the inquiry and stated that JCT would have all 
relevant materials, it appears much more likely that the JCT 
requests relied on the consent of the taxpayer as the basis for 
obtaining the requested information. Although Mr. Barthold 
acknowledged in his July 29 letter to Ranking Member Brady that 
JCT did not have any records indicating there was a consent 
document, he made clear that the best source for such a 
document would be IRS records.\10\ The unique context 
surrounding the Nixon Materials and President Nixon's voluntary 
submission to a JCT examination make that situation simply 
inapplicable to the Ways and Means Committee's modern-day 
request for President Trump's tax returns.
---------------------------------------------------------------------------
    \10\Letter from Thomas Barthold, Chief of Staff, Joint Comm. on 
Taxation, to the Hon. Kevin Brady, Ranking Member, Comm. on Ways and 
Means (July 29, 2019).
---------------------------------------------------------------------------
    The Democrats' search for a precedent fails to consider the 
fact that Congress amended 26 U.S.C. Sec. 6103 substantially 
via the Tax Reform Act of 1976.\11\ Prior to 1976 and during 
the time JCT was examining President Nixon's tax returns at his 
request, tax returns and tax return information were considered 
public records. The Tax Reform Act of 1976 fundamentally 
changed the treatment of tax returns and return information and 
established the structure of Sec. 6103 as it generally exists 
today. Significantly, the Act changed the default rule of 
Sec. 6103(a) to establish that tax returns and tax return 
information are presumed confidential subject only to specific 
statutory exceptions.\12\ These amendments to Sec. 6103 marked 
a significant change in the legal approach to the privacy of 
taxpayer information. For the first time in modern history, 
taxpayers had the security of knowing their tax returns and tax 
information would be kept confidential. Any statutory analysis 
taking place in 2019 and beyond must be informed by the 1976 
amendments that changed the nature of taxpayer privacy 
protections.
---------------------------------------------------------------------------
    \11\Tax Reform Act of 1976, Pub. L. No. 94-455, 90 Stat. 520 
(1976).
    \12\Compare 26 U.S.C. Sec. 6103(a) (``Returns made with respect to 
taxes imposed by chapters 1, 2, 3, and 6 upon which the tax has been 
determined by the Secretary or his delegate shall constitute public 
records.'') (1970), with 26 U.S.C. Sec. 6103(a) (``Returns and return 
information shall be confidential, and except as authorized by this 
title . . . .'') (1976).
---------------------------------------------------------------------------
    The legislative history surrounding the Tax Reform Act of 
1976 demonstrates the significance of the changes it made to 
the tax code. Protecting taxpayer privacy was central to the 
debate and Congress intended that the law would prevent misuse 
of taxpayer information for political purposes. While numerous 
members of Congress addressed these issues, Senator Bob Dole 
(R-KS) clearly articulated the importance of the issues 
Congress was debating at the time:

          I cannot stress enough the importance of preserving 
        the confidentiality of individual tax returns . . . . I 
        speak of a more basic, procedural unfairness in the tax 
        laws which presently permits supposedly confidential 
        individual income tax returns to come into the hands of 
        literally thousands of bureaucrats outside the Internal 
        Revenue Service, and which leaves open the possibility 
        that mischievous political operatives will again 
        attempt to gain access to such returns for partisan 
        political purposes. The tax privacy sections of H.R. 
        10612 will assure every American that his or her tax 
        return will remain confidential and immune from 
        political misuse.\13\
---------------------------------------------------------------------------
    \13\122 Cong. Rec. 24012-13 (1976) (statement of Senator Bob Dole).

    Protecting taxpayer information from partisan political 
misuse was central to the passage of the Tax Reform Act of 
1976. Congress intended to prevent what Chairman Neal and 
Committee Democrats are seeking through their request for 
President Trump's tax returns.

  THE PUBLICATION OF PRIVATE TAX RETURN INFORMATION DOES NOT CREATE A 
                     LEGITIMATE LEGISLATIVE PURPOSE

    Chairman Neal's effort to obtain President Trump's tax 
returns continues to be political in nature, lacking a 
legitimate legislative purpose. From the beginning, Committee 
Democrats have sought to weaponize the tax code in an effort to 
damage their political opponent, President Trump, through the 
publication of his tax returns. Chairman Neal and other 
Committee Democrats have made numerous statements demonstrating 
their true purpose in requesting the President's tax returns. 
The following is but a small, representative sample of those 
comments:
           During the 115th Congress, then Ranking 
        Member Neal stated that ``Committee Democrats remain 
        steadfast in [their] pursuit to have [President 
        Trump's] individual tax returns disclosed to the 
        public.''\14\
---------------------------------------------------------------------------
    \14\H.R. Rep. No. 115-309, at 8 (2017) (dissenting views); H.R. 
Rep. No. 115-73, at 8 (2017) (dissenting views).
---------------------------------------------------------------------------
           Chairman Neal stated earlier this year that 
        ``the public has reasonably come to expect that 
        presidential candidates and aspirants release those 
        documents.'' He also said that ``[w]e need to approach 
        this gingerly and make sure the rhetoric that is used 
        does not become a footnote to the court case.''\15\
---------------------------------------------------------------------------
    \15\Mark Sullivan, Powerful Ways and Means chairman Neal to pursue 
Trump's tax returns, Telegram & Gazette (Jan. 23, 2019, 5:41 PM) 
https://www.telegram.com/news/20190123/ powerful-ways-and-means-
chairman-neal-to-pursue-trumps-tax-returns. Chairman Neal also stated: 
``We are now in the midst of putting together the case.'' Id.
---------------------------------------------------------------------------
           Another Committee Democrat noted on 
        television that the Committee's Oversight Subcommittee 
        hearing was intended to ``lay the foundation for the 
        public purpose to acquire access to these 
        returns.''\16\
---------------------------------------------------------------------------
    \16\MSNBC, All In with Chris Hayes (transcript of television 
broadcast Feb. 7, 2019), http://www.msnbc.com/transcripts/all-in/2019-
02-07 (statement of Rep. Dan Kildee).
---------------------------------------------------------------------------
    In contrast, President Nixon voluntarily submitted 
information to JCT and asked for an examination of his tax 
returns for reasons completely unrelated to legislation. That 
voluntary approach did not require a legislative purpose 
analysis, whereas Chairman Neal's Sec. 6103 request for 
President Trump's tax returns must be based on a legitimate 
legislative purpose. Recent efforts by Democrats to create a 
legislative purpose is contrary to their prior public 
statements and serves as a mere pretext for obtaining and 
publicizing the President's tax returns for purely political 
reasons.
    In conclusion, the process for making the Nixon Materials 
public was unnecessarily rushed, chaotic, and shrouded in 
secrecy. The materials themselves have no bearing on a 
legislative purpose and because they were likely provided by 
consent, set no precedent for Chairman Neal's illegitimate 
request.

                                   Kevin Brady,
                                           Republican Leader, Committee 
                                               on Ways and Means.




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