Asleep at the wheel

IRS asleep at the wheel on Trump audits, House tax writers say

The report is likely to spur further questions about a procedure that calls for audits of sitting presidents.

By BENJAMIN GUGGENHEIM

The IRS didn’t audit the personal tax returns filed by former President Donald Trump during his first two years in office, despite an agency program that mandates scrutiny of every president’s tax information, a House committee said Tuesday.

Trump filed his 2015, 2016 and 2017 tax returns during his first two years as president, which should have triggered an IRS examination of those returns under a Watergate-era policy, according to the report by the House Ways and Means Committee.

However, the agency did not initiate an audit of any of the returns that Trump filed while in office until April 3, 2019. That was the same day that committee Chair Richard Neal (D-Mass.) first asked IRS Commissioner Chuck Rettig to provide Neal six years of Trump’s tax returns and any audits of those returns.

Only one such examination — that of the former president’s 2016 return — was flagged as a mandatory president audit. And three personal tax returns that Trump filed while in office for tax years 2017, 2018 and 2019 weren’t selected for scrutiny until after he left the White House.

The report reveals glaring problems for a program that is supposed to assure Americans that the president is abiding by the law, Joe Thorndike, a longtime tax historian, said.

“We have no other assurance that the president is following the same laws that the rest of us follow when it comes to paying our taxes and being good fiscal citizens,” Thorndike said. “And if the IRS can’t be relied upon to do this to follow their own rules, I think that is extremely disappointing.”

Neal maintained throughout his three-and-a-half-year legal battle to obtain Trump’s returns that the Ways and Means Committee was seeking them to review the presidential audit program, but attorneys for Trump and congressional Republicans said the effort was politically motivated.

Following a Supreme Court decision that blocked Trump’s bid to prevent Congress from receiving the information, the committee voted Tuesday evening to release six years of his personal returns and the returns for eight of his affiliated businesses.

“This is a major failure of the IRS under the prior administration, and certainly not what we had hoped to find,” Neal said in a statement. “Our work has always been to ensure our tax laws are administered fairly and without preference, because at times, even the power of a president can loom too large.”

Democrats are sure to dig into the issue further, even though they will slip into the minority in the House on Jan. 3. The Senate Finance Committee, the counterpart of Ways and Means, will still be controlled by Democrats.