IRS has routinely scrutinized Obama and Biden, raising questions about delays for Trump

WASHINGTON — The IRS subjected both President Donald J. Trump’s predecessor and his successor to office to annual audits of their tax returns, spokesmen for Barack Obama and President Biden said Wednesday, fueling questions about how Mr. Trump escaped one Review until House Democrats started asking questions.

Late on Tuesday, a House committee revealed that the IRS banned Mr. Trump during his first two years in office despite a rule that says “the president’s and vice president’s individual tax returns are subject to mandatory auditing.” But his report left unclear whether this error reflected a general dysfunction or whether Mr. Trump received special treatment.

Disclosure of routine checks by Mr. Obama and Mr. Biden during their tenure suggested that Mr. Trump’s treatment was an aberration.

“I’m absolutely amazed,” said Nina E. Olson, the national taxpayer advocate from 2001 to 2019. “It’s disturbing. You have a process where you audit the president, you better audit the president.”

Ways and Means Committee reports that Mr. According to Trump’s tax records last month after a year-long legal battle, the IRS initiated its first review of one of his records as president in April 2019, the same day that Rep. Richard E. Neal, Democrat from Massachusetts and chairman of the committee, had inquired about the matter.

The IRS has yet to complete that review, the report added, and the agency began examining records identifying Mr. Trump’s income as president only after he left office. Even after the agency belatedly began searching, it assigned just a single agent to investigate Mr. Trump’s return against a large team of lawyers and accountants, who objected when the IRS added two more people to help.

The committee’s discovery that the IRS broke its rules puts concerns about possible politicization of the IRS during the Trump administration to the test and prompts the inspector general, who oversees the agency, to investigate what went wrong. It’s also raised questions about why the IRS has so few resources to audit Mr. Trump, who, as a business mogul, had far more complicated tax returns than any previous president.

under Mr. Trump, the IRS was headed for most of 2017 by a commissioner led by Mr. Obama, John Koskinen, and – after about 11 months under the leadership of an acting chief, David J. Kautter – a commissioner led by Mr. Trump, Charles P. Right. No one ensured the agency was following its rules, which require presidential scrutiny.

Mr. Rettig, who left in October, said in an email Wednesday night that he had not attempted to audit Mr Trump.

“I am not aware of any taxpayer who has received special treatment at any time before or during my tenure as Commissioner,” he said. “Furthermore, at no point have I made, nor am I aware of, any decision made by anyone else to in any way limit the resources available to conduct examinations as part of the mandatory examination process.”

He added, “I was not involved in the selection process to audit or conduct an audit of any tax return in relation to any taxpayer.”

Mr. Koskinen said his only involvement with Mr. Trump’s tax returns was working to ensure they were kept in a safe place.

“The good thing about being a commissioner is you never know who’s going to be examined,” Mr Koskinen said, adding that it would have been inappropriate to ask about the status of an investigation.

Mr. Kautter did not respond to a request for comment.

The committee’s reports left many questions unanswered as it was given little time to act: While Mr. Neal had had Mr. Trump’s tax records since 2019, Mr. Trump fought the request for nearly four years. The Ways and Means Committee only gained access to the information last month, and Republicans are scheduled to take control of the House of Representatives in January.

Speakers and staffers for several other past presidents over the past three decades either did not respond Wednesday to questions about whether those presidents had been tested every year they were in office or said they did not remember.

Senator Ron Wyden, Democrat of Oregon and chair of the Senate Finance Committee, on Wednesday called the House panel’s findings a “blockbuster” that deserves further attention.

“The IRS was asleep at the wheel and the president’s audit program is broken,” he said. “There is no justification for the failure to conduct the necessary presidential scrutiny until a congressional investigation has been conducted.”

The Internal Revenue Service has been the subject of repeated controversy.

The New York Times reported this year that the IRS’ particularly invasive audits of two of Mr. Trump’s perceived enemies are former FBI Director James B. Comey and his deputy Andrew G. McCabe. Mr. Trump also repeatedly told his chief of staff that he wanted his perceived rivals, including these two, to face tax investigations.

Despite the slim likelihood of either being selected, an inspector general’s report concluded that both had been randomly selected for the initial pools the agency drew from to conduct the investigations. However, it is unclear how the IRS made the final selection from these pools.

In 2019 Mr. Trump raised eyebrows when he told Senator Mitch McConnell, the Majority Leader, to prioritize a confirmation vote for a longtime aide, Michael J. Desmond, as General Counsel of the IRS over the nomination of William P. Barr as Attorney General. Mr. Desmond had advised an affiliate of the Trump Organization and worked with two of their tax attorneys.

And in 2018 Mr. Trump appointed commissioner Mr. Richtig, who wrote a 2016 Forbes column detailing Mr. Trump’s refusal to exempt his taxes as a candidate, and portrayed the IRS as fully engaged in auditing the very wealthy.

“Teams of experienced tax advisors have probably been busy throughout Trump’s career making sure there isn’t a ‘bomb’ on tax returns,” Mr. Correctly Spelled said. “His return might actually be a bit unremarkable, but it’s the fact that it’s the return of Donald Trump.”

The Times gained access to years of tax information and in September 2020 published a report that raised numerous questions about the legality of write-offs and deductions it had used to avoid paying taxes most years. The article prompted the IRS to take a look at Mr. Trump’s 2017 tax returns, the committee report said.

The IRS has been short of resources for years because Republicans have tried to cut its funds. The report highlighted the agency’s broader struggles in dealing with complicated tax returns from wealthy people and criticized its willingness to trust returns filed by major accounting firms to contain accurate information.

Congress has approved an $80 billion overhaul of the IRS, in part to hire more specialists capable of auditing high-income taxpayers.

The committee released the reports after a party-line vote, wielding a rarely used power to receive and release private information from US taxpayers.

Congress invoked it in 1974 when a committee released a report on President Richard M. Nixon’s taxes after there was a scandal over whether he underpaid what he owed. This scandal prompted the IRS in 1977 to issue its rule mandating audits of presidents and vice presidents to ensure agency officials are not put in the awkward position of deciding whether to audit their boss.

The Ways and Means Committee exercised that authority again in 2014, when Republicans accused the IRS of political discrimination for using conservative terms like “Tea Party” when selecting groups to probe for political activities they might do for the United States would make receipt of tax-deductible donations ineligible. But an inspector general noted that the agency had also used liberal terms like “progressive” and “occupy” for the same purpose.

Commissioners of the agency are political agents of the presidents. Mr. Koskinen — who also ran the agency for some of the years it served Mr. Obama — wasn’t the only one to say he avoids being involved in presidential reviews.

Charles O. Rossotti, who served as IRS commissioner from 1997 to 2002, said he knew presidents were scrutinized for convenience, but had no role in the process.

“I stayed away from it with a 10-foot pole,” Mr. Rossotti said.

The requirement for the President’s tax returns to be audited is contained in the Internal Revenue Service’s Internal Review Manual, which provides few details. A 2019 IRS document accompanying the committee’s report said the audits were conducted by senior tax advisors.

“The IRS is not aware of any reports of undue bias or bias in conducting an officer review in its more than 40-year history of mandatory procedures,” it said.

The House Committee report also documented an exceptional lack of resources by the IRS to audit Mr. Trump’s return when it started late and initially assigned only one staffer to handle the matter, despite the unusual complexity of its business units and partnerships.

The committee cited internal IRS memos saying that “it is not possible to raise the resources available to investigate all potential issues” reported by the more than 400 in Mr. Trump’s taxes.

“In order to thoroughly review these returns, we would need a team much larger than the current team,” it said.

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