Trump’s IRS commissioner Charles Rettig faces criticism as term ends

The commissioner of the Internal Revenue Service faces a new onslaught of questions after a report Wednesday showed that two foes of President Donald Trump had been selected for a rare audit during Trump’s administration.

Charles Rettig, whose elevation by Trump to lead the service in 2018 surprised many tax professionals when it was announced, will be subject to new scrutiny after the New York Times revealed that both former FBI director James B. Comey and his deputy, Andrew McCabe, were the subject of highly unusual audits that the IRS says was selected at random. The Washington Post has confirmed the audits.

Former FBI leaders who drew Trump’s ire were both audited by IRS

Rettig was a tax attorney in Beverly Hills, Calif., When Trump put him in charge of the agency, which employs about 71,000 full-time staff. He had defended a billionaire the IRS accused of hiding money in offshore accounts, a venture capitalist the agency alleged used sham accounting to shelter assets, and the heirs of a millionaire defense contractor who sought to fend off inheritance taxes.

He started out as a Trump ally when his four-year term began in 2018, shielding the former president’s tax returns from public view in the face of a House Democratic lawsuit. But Rettig has proved a willing partner for the Biden administration, as well, supporting its efforts to close the gap between what taxpayers owe and what they pay, and implementing expansive new stimulus measures.

The IRS commissioner’s term is set to expire in November, and Biden administration officials had already begun interviewing potential candidates for his replacement before this week’s news, according to two people familiar with the matter, who spoke on condition of anonymity to describe private conversations. Rettig has expressed openness to a second term, said one other person familiar with the matter, who spoke on the condition of anonymity for the same reason.

Still, the revelation about Comey and McCabe’s audits will revive difficult questions for the IRS commissioner and his legacy. Rettig has won praise from Democratic lawmakers under Biden for his outreach and responsiveness to Capitol Hill, but his deference to Trump has come under scrutiny given the nonpartisan role the IRS is supposed to play. The revelation will also bring new scrutiny on former Trump treasury secretary Steven Mnuchin, since Treasury oversees the IRS. A spokesman for Mnuchin did not immediately return a request for comment. Trump told the New York Times through a spokesman that he had no knowledge of the matter.

The IRS has been adamant that there is no political interference in its audit process. Comey and McCabe were selected for the National Research Program, which typically selects about 13,000 people and corporations a year out of hundreds of millions of tax returns for the intensive audit program. McCabe’s audit was launched months into the Biden administration, although still under Rettig’s tenure. It focused on his 2019 tax return.

The audit program is run out of the IRS’s Research, Applied Analytics and Statistics Division. A group of career employees – statisticians and data scientists – run a computer program that randomly selects taxpayers across the income spectrum to determine compliance levels with the nation’s tax codes, according to John Koskinen, who served as IRS commissioner under the Obama and beginning of the Trump administration. Once the names are chosen in that random lottery, they are then forwarded to the IRS division that handles audits, according to Koskinen.

The IRS said in a statement: “Commissioner Rettig is not involved in individual audits or taxpayer cases; those are handled by career civil servants. As IRS Commissioner, he has never been in contact with the White House – in either administration – on IRS enforcement or individual taxpayer matters. He has been committed to running the IRS in an impartial, unbiased manner from top to bottom. ”

IRS spokeswoman Jodie Reynolds added: “It’s ludicrous and untrue to suggest that senior IRS officials somehow targeted specific individuals for National Research Program audits. We cannot comment on specific situations. Whenever allegations of wrongdoing are raised on a tax matter, we routinely reach out to the Treasury Inspector General for Tax Administration for further review. ”

Rettig personally referred the matter to the inspector general for review after details of the Times’ reporting emerged, according to a senior government official familiar with the situation.

Trump’s pick for IRS chief is now faced with implementing Biden’s economic agenda

Former IRS officials expressed disbelief that there could have been political meddling in the audit program, since there are federal criminal penalties for interference. There is no way for Rettig to have ordered or performed the audit without the support of career staff, said Mark Everson, who served as commissioner of the service under the George W. Bush administration.

“I would be stunned if there was any intentional selection of either McCabe or Comey for audit under this program. That would be truly shocking. I do not see that, ”Everson said. Everson added that even if randomly selected, Comey should have been excluded from the audit because of his high-profile political status. “Somebody should have exercised more judgment before proceeding with the Comey audit. I would have hoped that would be the case. Even if randomly selected, I think a supervisor should have said, ‘We can just knock this one out.’ ”

Still, former IRS officials, including Everson, said the matter should be investigated. The Treasury inspector general did not immediately return a request for comment on whether it had opened an investigation into the selection of the audits.

“For two guys who are enemies of President Trump to be selected together, although in different years, would have to be viewed as unusual,” Koskinen said. “In light of everything else going on in the last few years, it’s worth taking a look at to assure the public that the IRS is treating all taxpayers fairly.”

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