Mnuchin says he was unaware of IRS memo on tax returns

WASHINGTON (AP) -- Treasury Secretary Steven Mnuchin said Wednesday he has no idea who wrote a confidential Internal Revenue Service legal memo that says that tax returns must be given to Congress unless the president asserts executive privilege.

Appearing before the House Financial Services Committee, Mnuchin said he was not aware of the existence of the memo until reporters from The Washington Post made inquiries about it.

Mnuchin noted that it was a draft document. He told the committee he believed he was following the law by refusing to turn over six years of President Donald Trump's tax returns, which have been requested by Ways and Means Committee Chairman Richard Neal, D-Mass.

Mnuchin said he expected the dispute to ultimately be decided by the courts.

Mnuchin has refused to turn over the tax returns despite a 1924 law that gives the chairs of the tax-writing committees in Congress the power to request the returns of any taxpayer.

Mnuchin last Friday refused to obey a congressional subpoena to turn over the returns, saying he request "lacks a legitimate legislative purpose."

Mnuchin told lawmakers that he had not had any discussions on the issue with Trump, who has said repeatedly that he can't turn over his taxes because he is under IRS audit. Trump has not asserted executive privilege to protect the returns.

Neal has said he expects to bring a lawsuit to force the administration to comply with his subpoena.

When a number of Democrats pressed Mnuchin on the issue of whether he was breaking the 1924 law, Mnuchin said that "weaponizing the IRS is a major concern of ours which affects taxpayers of both parties."

Mnuchin's appearance Wednesday before the House Financial Services Committee was a continuation of a hearing that had ended with a tense standoff earlier in the month when Mnuchin had complained to Committee Chair Maxine Waters, D-Calif., that the hearing was going on too long and forcing him to miss a meeting with the head of a foreign country.

Waters and Mnuchin were cordial with each other during Wednesday's hearing. Mnuchin stayed until all lawmakers on the panel had the chance to ask their questions, which ranged over a number of issues from Trump's taxes to the status of the re-design of the $20 bill and the trade dispute with China.

A number of lawmakers questioned whether the trade war with China will end up hurting American households by driving up the cost of numerous consumer items from clothing and shoes to popular cell phones.

Mnuch said he had talked to top executives from Walmart and other companies and had assured them that the administration will be mindful of the impact on consumers.

He said that consumer items were included in the "last tranche" of tariffs that could be imposed on $300 billion in Chinese products and the administration will make no decision on imposing tariffs on those items until after a public hearing which is scheduled for June.

"The last tranche is subject to the president's approval, and we have made no decisions on that," Mnuchin told lawmakers. "I don't expect there will be significant costs on American families."

The administration did increase tariffs on an initial $200 billion of Chinese goods last week from 10% to 25%. But broadening the tariffs to another $300 billion in goods will not go into effect until after public hearings and a final decision by the administration.

On the issue of redesigning the currency, Mnuchin said that a decision by his predecessor, former Treasury Secretary Jacob Lew, to put African-American abolitionist leader Harriett Tubman on the $20 billion would be delayed and will not happen in 2020.

He said that the redesigns were being made to protect the currency from counterfeiters and that other denominations had been deemed more critical to being redesigned than the $20 bill.

He said currently the decision on whether to put Tubman on the $20 in place of Andrew Jackson would likely not happen until 2026. Even if Trump wins a second term and Mnuchin remained as Treasury secretary, Trump's second term would end in January 2025.

Trump during the 2016 campaign had criticized putting Tubman on the $20 in place of Jackson.