Democrats battle to obtain Trump tax returns as president claims huge business losses were intentional

Democrats vote to hold attorney general William Barr in contempt of Congress and subpoena president's eldest son

Democrats are preparing for a legal battle to obtain Donald Trump’s tax returns – an issue that has taken on outsized importance – while the president has claimed huge businesses losses he suffered during the 1980s were an intentional write off.

Members of the House of Representatives are to meet to consider their next step, after Mr Trump’s treasury secretary refused to release the returns they had requested.

Reports suggested Democrats will decide to head directly to court and claim treasury secretary Steven Mnuchin was in breach of an Internal Revenue Service (IRS) law, without bothering to first issue a subpoena.

Doing so would further escalate the standoff between Democrats on Capitol Hill and the White House, which has so far resisted a succession of demands to either hand over documents, or make available officials to testify.

Congressman Richard Neal, the Democratic chair of the House of Representative’s Committee on Ways and Means, will meet with colleagues on Thursday to discuss the way forward after obfuscation from the Trump administration.

“I believe Mr Neal does not need a subpoena to go to court,” congressman Steny Hoyer, the second most senior Democrat in the House, told Politico. “There is a big picture here. The picture of perhaps the greatest cover up of any president in American history — just a blanket “we’re not giving you information”.”

Speaker Nancy Pelosi, Mr Hoyer’s boss, agreed, telling the Washington Post: “There are several options. One of them is to go directly to court.”

Among the documents Democrats have been seeking, is a full, unredacted copy of special counsel Robert Mueller’s report into Russia’s alleged interference in the 2016 election, and possible collusion with the Trump campaign.

After the department of justice refused to provide a copy, House Democrats on Wednesday took the rare step of voting to hold attorney general William Barr in contempt of Congress. “We are now in a constitutional crisis,” said Jerry Nadler, Democratic chair of the House judiciary committee, after it voted 24-16 on party lines. The resolution on Mr Barr now goes to the full House.

A partly-redacted version of Mr Mueller’s 448-page report was released last month. In it, the former FBI director said he did not find evidence of collusion between Mr Trump’s campaign and Russia, but he did not exonerate the president on the question of possible obstruction of justice.

Indeed, the report highlighted around a dozen incidents that could have been interpreted as attempts by Mr Trump to interfere with the investigation or terminate it.

Since then, with Mr Trump having falsely claimed the report cleared him of both collusion and obstruction, the White House has gone into lockdown mode, denying requests for documents, and for testimony from officials such as former White House counsel Don McGahn. On Wednesday evening it was revealed Mr Trump's eldest son, Donald Trump Jr, had been subpoenaed by the Senate intelligence committee, which wants to quiz him about a meeting he had with a group of Russians in June 2016.

The same has been true, only for a longer period, in regard to Mr Trump’s tax returns, which he claimed he cannot make public – the first president since 1976 not to do so – as they are being audited by the IRS. Experts say even if they were being audited, no law prevents them from being released.

This week, the New York Times published some details of what it said were Mr Trump’s finances, showing he lost more than $1bn from 1985 to 1994. The newspaper said its reporting was based on printouts it acquired of the president’s official IRS tax transcripts, including figures from his federal tax form.

Mr Trump reported business losses of $46.1m in 1985, and a total of $1.17bn in losses for the 10-year period, it said.

On Wednesday, New York state’s senate approved a bill that would allow three congressional committees to get access to Mr Trump’s state tax returns, giving Democrats a potential way of overcoming the administration’s refusal to disclose the president’s federal returns.

Mr Trump tweeted that he secured massive tax write offs during the 1980s and 1990s, along with other property speculators, and claimed it was a “sport”.

“Real estate developers in the 1980’s & 1990’s, more than 30 years ago, were entitled to massive write offs and depreciation which would, if one was actively building, show losses and tax losses in almost all cases,” Mr Trump tweeted.

“Sometimes considered ‘tax shelter’, you would get it by building, or even buying. You always wanted to show losses for tax purposes....almost all real estate developers did – and often re-negotiate with banks, it was sport.”

Nonetheless, he claimed the report in the newspaper was a “highly inaccurate fake news hit job” based on old information.