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  • Writer's pictureThe San Juan Daily Star

IRS routinely audited Obama and Biden, raising questions over delays for Trump

Starrett City, a Brooklyn housing complex Donald Trump’s father invested in during the 1970s, June 29, 2018. The presidency of Donald Trump, a congressional report reveals, was marked by some of the same questionable tax maneuvers that had characterized his business career.

By Charlie Savage and Alan Rappeport

The IRS subjected President Donald Trump’s predecessor and his successor to annual audits of their tax returns once they took office, spokespeople for Barack Obama and President Joe Biden said last week, intensifying questions about how Trump escaped such scrutiny until Democrats in the House started inquiring.

Late Tuesday, a House committee revealed that the IRS failed to audit Trump during his first two years in office despite a rule that states that “the individual tax returns for the president and the vice president are subject to mandatory review.” But its report left unclear whether that lapse reflected general dysfunction or whether Trump received special treatment.

The disclosure of routine audits of Obama and Biden during their time in office suggested that the agency’s treatment of Trump was an aberration.

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

Reports issued by the House Ways and Means Committee, which obtained Trump’s tax data last month after a yearslong legal battle, said the IRS initiated its first audit of one of his filings as president in April 2019, the same day that Rep. Richard Neal, D-Mass., the committee’s chair, had inquired about the matter.

The IRS has yet to complete that audit, the report added, and the agency started auditing filings covering Trump’s income while president only after he left office. Even after the agency belatedly started looking, it assigned only a single agent to examine Trump’s returns, going up 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 flouted its rules is bringing new scrutiny to concerns about potential politicization at the IRS during the Trump administration and spurring calls for the inspector general who oversees the agency to investigate what went wrong. It has also raised questions about why the IRS devoted so few resources to auditing Trump, who, as a business mogul, had far more complicated tax filings than any previous president.

Under Trump, the IRS was run for most of 2017 by a commissioner appointed by Obama, John Koskinen, and — after about 11 months being overseen by an acting head, David J. Kautter — a successor appointed by Trump, Charles P. Rettig. None ensured that the agency followed its rules requiring presidential audits.

Neither Kautter nor Rettig, who left in October, responded to a request for comment. Koskinen said that his only involvement in Trump’s tax returns was working to ensure that they were kept in a secure location.

“The good thing about being commissioner is that you never know who is being audited,” Koskinen said, adding that it would have been inappropriate to ask about the status of any examination.

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

Spokespeople and associates of several other former presidents over the past three decades either did not respond Wednesday to queries about whether those presidents had been audited every year they were in office or said they did not recall.

Sen. Ron Wyden, D-Ore., the chair of the Senate Finance Committee, on Wednesday called the House panel’s findings a “blockbuster” that required further attention.

“The IRS was asleep at the wheel, and the presidential audit program is broken,” he said. “There is no justification for the failure to conduct the required presidential audits until a congressional inquiry was made.”

The IRS has already been the subject of repeated controversy.

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

Despite the low odds of both being singled out, an inspector general’s report concluded that both had been randomly selected for the initial pools from which the agency drew to carry out the examinations. But it is unclear how the IRS made final selections from those pools.

In 2019, Trump raised eyebrows by telling Sen. Mitch McConnell, the majority leader, to prioritize a confirmation vote for a longtime associate, Michael J. Desmond, as general counsel of the IRS over the nomination of William Barr as attorney general. Desmond had advised a subsidiary of the Trump Organization and worked with two of its tax lawyers.

And in 2018, Trump appointed as commissioner Rettig, who had written a Forbes column in 2016 defending Trump’s refusal to release his taxes as a candidate and portrayed the IRS as fully engaged in auditing very wealthy people.

“Teams of sophisticated tax advisers were likely engaged throughout Trump’s career to assure the absence of any ‘bombshell’ within the returns,” Rettig wrote. “His returns might actually be somewhat unremarkable but for the fact they are the returns of Donald Trump.”

In fact, the few glimpses of Trump’s taxes have shown much to talk about. The Trump Organization was convicted of a tax fraud scheme this month. The New York attorney general has sued Trump and three of his children, accusing them of fraudulently overvaluing his assets.

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

The IRS has had scant resources for years because Republicans have sought to cut its funding. The report highlighted the agency’s broader struggles in dealing with complicated tax returns filed by wealthy people and criticized its willingness to trust that returns filed by big accounting firms contained accurate information.

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

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