Judge urges House to negotiate with Trump in tax return fight

[November 07, 2019]    By Jan Wolfe

(Reuters) - A U.S. judge on Wednesday told lawyers for the House of Representatives that it should try to reach a compromise with the Trump administration over access to the president's tax returns, saying the two branches of government are required to at least attempt to make a deal.

President Donald Trump speaks to the media on the South Lawn of the White House in Washington, U.S., before his departure to New York, November 2, 2019. REUTERS/Yuri Gripas/File Photo

"I think there should be a way for the parties to figure this out," said U.S. District Judge Trevor McFadden during an oral argument, adding "it seems to me that there could be some common ground."

The court hearing came in a lawsuit a House committee filed in July in hopes of forcing the Internal Revenue Service to comply with a subpoena requesting President Donald Trump's tax returns.

The House Ways and Means Committee, which oversees tax laws, has said it needs Trump's tax returns to determine if the IRS is properly auditing presidential tax returns in general.

In a widely expected move, U.S. Treasury Secretary Steven Mnuchin rejected the demand for the documents, saying the committee lacked a sufficient legislative purpose for seeking them.

Justice Department lawyers, arguing on behalf of the Trump administration, raised several arguments at Wednesday's court hearing for why the case should be dismissed.

One of their arguments was that McFadden cannot hear the case until the House and the White House have earnestly tried to negotiate a compromise.

U.S. courts have held that the U.S. Constitution imposes an implicit requirement on Congress and the White House to attempt to resolve disputes over access to information before asking judges to rule.

"Here, that just hasn't happened," said Steven Meyers, a Justice Department lawyer, suggesting there might be other information the House could seek besides Trump's tax returns to assist it in examining how the IRS audits presidents.

Megan Barbero, a lawyer for the House, argued that further negotiation would be pointless. The House committee believes it needs to see Trump's tax returns, and the Treasury Department has made clear it will not produce them, Barbero said.

"It is quite clear the parties are at an impasse," Barbero said.

McFadden, a Trump appointee, stopped short of dismissing the case or formally demanding the parties begin a negotiation. But he said he took seriously the negotiation requirement, adding "it would behoove the parties to begin thinking about what that process would look like."

The lawsuit is just one of several court fights over access to Trump's tax returns.

This week an appeals court in New York ruled that Trump’s longtime accounting firm must hand over eight years of his tax returns to New York prosecutors. Trump's lawyers have vowed to take that case to the U.S. Supreme Court.

(Reporting by Jan Wolfe)

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