Speed Reads

Internal Revenue Disservice

Was the IRS 'asleep at the wheel' regarding auditing Trump's tax returns?

The Internal Revenue Service has come under fire after a report by the House Ways and Means Committee found that the agency failed to do its due diligence when auditing former President Donald Trump.

A rule exists stating "the individual tax returns for the president and the vice president are subject to mandatory review," however the IRS failed to audit Trump at all during his first two years in office until House Democrats requested his tax documents in 2019. The audits that were completed usually deferred to Trump's own staff with only one IRS staffer reviewing his tax returns, writes The Wall Street Journal. On the flip side, regular audits of former President Barack Obama and President Biden were regularly made public, The New York Times reports.

These findings are significant because they suggest partisanship within the IRS, an agency intended to be nonpartial, the Times continues. The IRS was overseen by Obama-appointed John Koskinen and later Trump-appointee Charles P. Rettig, neither of whom apparently ensured the IRS followed protocol. This has been viewed as a monumental failure of the IRS by many.

For one, Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee, said the IRS was "asleep at the wheel." Wyden declared "the presidential audit program is broken," and called for the government to pay more attention to the findings, especially since the audit of Trump's taxes is still yet to be completed. 

"This is a major failure of the IRS under the prior administration, and certainly not what we had hoped to find," said House Ways and Means Chair Richard Neal (D-Mass.), who was the first to ask that Trump be audited. He added that the committee's work "has always been to ensure our tax laws are administered fairly and without preference."

Analysts like Steven Rosenthal, a tax lawyer and senior fellow at the Tax Policy Center in Washington, agreed. He said the report "sort of dispels the image of a powerful and effective IRS," and argued, "the IRS is ineffective with sophisticated taxpayers." The report claims that auditing Trump has become more involved and rigorous. In an internal memo, the IRS expressed that to "do a thorough review of these returns we would need a team much larger than the current team."

Many view the report as evidence the IRS has become politicized, because while Trump's taxes were neglected, the former president regularly called for audits of his political foes including former FBI Director James Comey and former Deputy Director Andrew McCabe, which were properly completed. Former federal prosecutor Shan Wu said in an opinion piece for The Daily Beast that this "should raise deep concerns and trigger increased scrutiny," but added that, "further work by the House of Representatives on the issue is highly unlikely given that the Republicans are about to take control of the House."

"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," remarked tax historian Joe Thorndike. "And if the IRS can't be relied upon to do this to follow their own rules, I think that is extremely disappointing."