The US Court of Appeals for the Second Circuit upheld a decision by a lower court on Monday that an accounting firm employed by President Donald Trump must comply with a subpoena to release the president’s tax returns.
Manhattan District Attorney Cyrus Vance obtained a grand jury subpoena in August ordering Mazars USA, an accounting firm employed by Trump, to release eight years of Trump’s personal and business tax returns to the state prosecutor’s office. The office is currently investigating claims made by Trump’s ex-attorney Michael Cohen, who alleged that Trump ordered him to make hush money payments to cover up extramarital affairs and then reimbursed those payments with funds from Trump’s now defunct non-profit charity, the Trump Organization. The Trump Organization claimed that the payments to Cohen were merely retainer fees for legal work. Vance subpoenaed the Organization and Mazars to determine if the money paid to Cohen was properly reported or if the Organization had illegally falsified business records by listing the bribes as retainer fees. Trump attempted to block the subpoena, arguing that presidential executive privilege extended to copies of his tax returns held by third parties and that it was improper to subpoena a sitting president.
In early October a judge for the the US District Court for the Southern District of New York rejected Trump’s argument, saying that the president’s attempt to extend presidential executive privilege to cover his organization’s tax returns was an extraordinary “overreach of executive power.” The court ordered Mazars to turn over the tax returns to Vance. However, Trump’s legal team immediately appealed to the Second Circuit, which issued a temporary injunction staying the order until it could decide whether to permit the release of the tax returns.
In Monday’s ruling, the Second Circuit agreed with Trump’s legal team that the legal grounds for district court’s rejection of his appeal were incorrect, stating that the precedent of Younger v. Harris was misapplied by the lower court. However, the appeals court still agreed with the ultimate outcome of the trial court’s decision, holding that Trump was unlikely to succeed on the merits of his case and a preliminary injunction barring the release of the tax returns would be improper. Chief Judge Robert Allen Katzmann, writing the opinion for the unanimous three-judge panel, rejected Trump’s claims of presidential privilege over the tax returns. Katzmann emphasized that the information requested by Vance were not government documents and therefore was not subject to heightened protection afforded presidential communications. In addition, the subpoena was issued to a third party, not the president himself, and therefore did not impose any prosecutorial pressure on Trump directly. Katzmann was clear to emphasize the narrowness of the ruling, saying that “does not require us to consider whether the President is immune from indictment and prosecution while in office,” instead ruling strictly that the subpoena of Mazars was proper and should be enforced.
In a statement reported by NPR, Trump’s attorney, Jay Sekulow, said that the decision will be appealed to the Supreme Court.