Court Denies Motion to Expedite Lawsuit to Compel Production of President's Tax Returns

(Parker Tax Publishing September 2019)

A district court denied a motion filed by the Committee on Ways and Means of the U.S. House of Representatives to expedite consideration of its suit against the Department of the Treasury and the IRS to compel production of the federal income tax returns and related IRS administrative files of President Trump and eight Trump Organization entities. The court rejected the Committee's argument that the typical staged approach to litigation would unjustifiably delay resolution of the case and concluded that, given the novel and complex questions about the privileges and authority of all three branches of the federal government at issue, adhering to the traditional litigation sequence would allow the court to assure itself of its authority to resolve such an inter-branch conflict before proceeding to the merits. Committee on Ways and Means, U.S. House of Representatives v. U.S. Dept. of the Treasury, 2019 PTC 328 (D. D.C. 2019).

Background

On July 8, 2019, the Committee on Ways and Means of the House of Representatives (the Committee) sued the Treasury, the IRS, and their agency heads (collectively, the Administration) in the D.C. district court to compel the production of the federal income tax returns and related IRS administrative files of President Trump and eight Trump Organization entities. President Trump intervened.

The Committee moved for summary judgment and asked the court to expedite consideration of the case. The Committee asserted that time is of the essence to obtain President Trump's tax information and that the typical staged approach to litigation would unjustifiably delay resolution of this case. The Committee therefore asked the court to proceed immediately to summary judgment and consolidate briefing on the jurisdictional questions with the merits of the Committee's claims. According to the Committee, doing so would allow the court to resolve the matter in time for the current Congress to legislate on related matters before the House disbands in 16 months. The Administration and President Trump opposed the Committee's motion and proposed that the court hold the Committee's motion for summary judgment in abeyance while it considered threshold jurisdictional questions that they intended to raise in a motion to dismiss.

Analysis

The district court denied the Committee's motion to expedite, denied without prejudice the motion for summary judgment as premature, and denied the motion to hold the motion for summary judgment in abeyance as moot.

The court noted that the Committee's request came seven weeks after it filed its complaint. In the court's view, it was not clear why only now the Committee asked for expedited consideration of the matter. The court found that Congress, of which the Committee is a part, has left it to the courts to determine the order in which civil actions are heard and determined, with only a narrow set of cases that must skip to the front of the line (for example, actions for injunctive relief). The court found that Congress has authorized no similar fast-track for cases instituted by itself or its components.

The court noted that it is authorized to expedite the consideration of any action for good cause, but in the court's view, the weighty constitutional issues and political ramifications of this case militated in favor of caution and deliberation. The court explained that this case presented novel and complex questions about the privileges and authority of all three branches of the federal government and noted that the Administration and President Trump intended to raise threshold issues about the court's authority to resolve such an inter-branch conflict in a forthcoming motion to dismiss. In the court's view, the need to assure itself of its jurisdiction to hear the case before proceeding to the merits was inflexible and without exception and, without prejudging the jurisdictional issues, the court said those issues seemed unlikely to be so trivial as to justify a rush to the merits.

The court also observed that the Administration and President Trump raised versions of some of their proposed arguments in other pending cases in the D.C. Circuit and the Second Circuit, suggesting that a rush to judgment in this case would be unwise. According to the court, by first addressing the preliminary questions, the court and the parties may benefit from the guidance from the D.C. Circuit about issues-in-common with the matters on appeal.

The court found that other factors weighed against the Committee's motion to expedite. First, the time for the Administration to respond to the complaint had not yet passed. According to the court, a motion for summary judgment is generally premature until the nonmovant has had time to file a response. In addition, President Trump suggested that he intended to seek discovery, and the court said that summary judgment would be premature unless all parties have had a full opportunity to conduct discovery. Finally, it was not clear to the court whether all proper parties had joined the case. There was a pending motion to intervene on which the court had yet to rule.

The court concluded that it may be appropriate to expedite this matter at some point, but not now. In the court's view, the Committee had not justified its request to bypass the motion to dismiss stage and skip ahead to summary judgment. The court observed that by the time summary judgment was appropriate, this could look very different - there may be new caselaw, new facts, and new parties. According to the court, these factors also counseled for denying the Committee's motion now to allow it to refile based on the latest legal and factual landscape later, rather than holding the current motion in abeyance.

Disclaimer: This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer. The information contained herein is general in nature and based on authorities that are subject to change. Parker Tax Publishing guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. Parker Tax Publishing assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein.

Parker Tax Pro Library - An Affordable Professional Tax Research Solution. www.parkertaxpublishing.com

We hope you find our professional tax research articles comprehensive and informative. Parker Tax Pro Library gives you unlimited online access all of our past Biweekly Tax Bulletins, 22 volumes of expert analysis, 250 Client Letters, Bob Jennings Practice Aids, time saving election statements and our comprehensive, fully updated primary source library.

Try Our Easy, Powerful Search Engine

A Professional Tax Research Solution that gives you instant access to 22 volumes of expert analysis and 185,000 authoritative source documents. But having access won’t help if you can’t quickly and easily find the materials that answer your questions. That’s where Parker’s search engine – and it’s uncanny knack for finding the right documents – comes into play

Things that take half a dozen steps in other products take two steps in ours. Search results come up instantly and browsing them is a cinch. So is linking from Parker’s analysis to practice aids and cited primary source documents. Parker’s powerful, user-friendly search engine ensures that you quickly find what you need every time you visit Our Tax Research Library.

Dear Tax Professional,

My name is James Levey, and a few years back I founded a company named Kleinrock Publishing. I started Kleinrock out of frustration with the prohibitively high prices and difficult search engines of BNA, CCH, and RIA tax research products ... kind of reminiscent of the situation practitioners face today.

Now that Kleinrock has disappeared into CCH, prices are soaring again and ease-of-use has fallen by the wayside. The needs of smaller firms and sole practitioners are simply not being met.

To address the problem, I’ve partnered with a group of highly talented tax writers to create Parker Tax Publishing ... a company dedicated to the idea that comprehensive, authoritative tax information service can be both easy-to-use and highly affordable.

Our product, the Parker Tax Pro Library, is breathtaking in its scope. Check out the contents listing to the left to get a sense of all the valuable material you'll have access to when you subscribe.

Or better yet, take a minute to sign yourself up for a free trial, so you can experience first-hand just how easy it is to get results with the Pro Library!

Sincerely,

James Levey

Parker Tax Pro Library - An Affordable Professional Tax Research Solution. www.parkertaxpublishing.com