In a letter sent on Monday to the Democratic chairman of the House Ways and Means Committee, Mnuchin wrote, "I have determined that the committee's request lacks a legitimate legislative objective, and pursuant to section 6103, the department is therefore not authorized to disclose the requested returns and return information".
Federal law limits the kind of federal tax information that states are permitted to disclose, which could translate into criminal penalties if NY state's Department of Taxation and Finance does not adhere to statute should Neal request Trump's returns.
Mnuchin said in his letter that he relied on "the advice of the Department of Justice" in making this determination.
Is guaranteed to set a legal battle over Trump's tax returns. "We need immediate legal action". But Treasury missed the deadlines, a strategy Democrats have argued was an effort to delay the process.
He added that "the department may not lawfully fulfill the committee's request".
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Upon written request from the chairman of the Committee on Ways and Means of the House of Representatives, the chairman of the Committee on Finance of the Senate, or the chairman of the Joint Committee on Taxation, the Secretary shall furnish such committee with any return or return information specified in such request, except that any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished to such committee only when sitting in closed executive session unless such taxpayer otherwise consents in writing to such disclosure.
Neal has now indicated that he will continue to demand to tax details of Trump. The president's personal lawyer sent letters to the Treasury Department urging it not to release his financial information. He is the first president since Watergate to decline to make his tax returns public, often claiming that he would release them if he was not under audit.
The Massachusetts Democrat has previously indicated that defying his request would be interpreted as noncompliance and lead to an escalation of a standoff between the Trump administration and House Democrats.
"We are under audit, despite what people said, and working that out", Trump told reporters at the White House.
Neal wrote to Internal Revenue Service Commissioner Charles P. Rettig, saying "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".
Democrats are up against a barrage of denied requests from the administration, forcing leadership into tough decisions about what oversight priorities are worth pursuing in court. Senate Democrats grilled the attorney general about his summary of the report and his remarks about what the investigation revealed. "We're not going anywhere", he said.