By firing his haters, Trump made their taxes more attractive to the IRS

The tax audits that examined the statements of two former top FBI officials and adversaries of former President Donald Trump are part of a little-known research program designed to help the Internal Revenue Service collect data on possible future tax evaders.

James B. Comey and Andrew McCabe, the former director and deputy director of the FBI, were investigated by the IRS’ National Investigation Program for their 2017 and 2019 tax returns, respectively. These audits are designed to help the IRS capture data on certain types of filers who are more likely than others to misreport their income, even inadvertently, and they are different from enforcement audits designed to catch people who break the law. IRS algorithms select taxpayers for National Research Program audits from a pool that disproportionately includes high-income taxpayers who are self-employed or who generate income through sole proprietorships or investments.

Comey and McCabe were government employees for years, earning predictable salaries that were reported to the IRS along with their withholding tax, and they would not have fallen into those categories during that time.

But then Trump fired them — Comey in 2017 and McCabe in 2018. Comey wrote two lucrative books and started giving paid speeches, and McCabe joined CNN as a law enforcement analyst at antenna. These arrangements, according to tax policy experts and former senior IRS officials, would have made the two men far more likely to be picked up for search inspection than they were as employees of the FBI, because the pool of high earners with such eclectic income streams is significantly smaller.

The rare audits were first reported by The New York Times. Lawmakers and the IRS commissioner have asked the agency’s top tax watchdog to investigate.

IRS chief faces questions over audits of Trump haters

Trump has constantly raged about Comey and McCabe – advisers say they topped his list of proverbial enemies as president – and former officials told The Washington Post that Trump frequently thought that they should be investigated. But former IRS officials have said the national review program would be difficult to use as a deliberate weapon.

By firing both men, however, Trump ensured the pair made a lot more money than they did at the FBI – launching them into a new tax bracket that the IRS reviews much more frequently than even government employees. well paid.

The chances of the two men being dragged into the research program audits by coincidence soon after Trump fired them may seem slim, but former top tax policy officials told the Post they are certain that that was what had happened – though they admitted it sounded suspicious.

“We like to see patterns, so that’s what we see,” said Mark Mazur, the Biden administration’s former deputy treasury secretary for tax policy, who previously headed the IRS office in charge of tax policy. enigmatic research program.

The idea of ​​using the IRS against political adversaries certainly crossed the mind of the former president.

Trump, who has refused to release his own tax returns and claimed they were audited, has regularly complained that the IRS has been “a pain in the ass” for him over the years. years, said a former official, and he was “incredibly well versed”. in previous accusations that previous administrations tampered with the IRS for political purposes.

A former senior official said Trump would rant that people should be investigated and audited, although neither of the two officials who spoke to The Post said they had ever heard Trump give specific orders for this purpose. The people spoke on condition of anonymity to describe private conversations.

“They did it to us,” Trump said in 2017, accusing the IRS of conducting politically motivated audits of pro-Republican groups under President Barack Obama, a scenario the conservative media had often focused on. although no evidence has emerged to support such a claim. “He would say this person should be investigated, this person should be audited. I never heard him give a direct order,” one of the former officials said.

The IRS worked for years to avoid giving even the appearance of political bias, although Trump administration officials said that would not have deterred the former president.

“He didn’t care at all what the rules were supposed to be,” said one of the former officials.

Through a spokesperson, Trump said he knew nothing about McCabe and Comey’s audits, even as he criticized the two men.

The agency has previously been suspected that its reviews have been exploited by political actors. Shortly after the 2012 presidential election, Mark Everson, who served as IRS commissioner during the George W. Bush administration, received a call from an investigative reporter about coincident enforcement audits. of two aides to Mitt Romney, now a senator from Utah, who was Obama’s Republican challenger that year.

“I said to the reporter, ‘Please tell me you have something more than the fact that the individuals said they were audited shortly after the election,’ Everson said. The story never ran. Everson said it would be impossible for the IRS to quickly launch a series of investigations after a presidential election, even if it wanted to. “Things happen, and in the political world, they speak and evoke conspiracies.”

The research program involves audits that are intrusive and complicated for taxpayers to manage, but they are very different from the enforcement audits that most people think of when they worry about hearing from the IRS.

Enforcement audits are targeted at specific individuals suspected of violating the tax code. Their purpose is to collect revenue and deter further fraud. For research audits, taxpayers are randomly selected by an algorithm, and the procedures do not mean that the IRS suspects fraud. The agency uses the results to regularly reprogram its enforcement software so that it can more accurately track questionable activity in the future.

“The fact that he is in a [National Research Program] sample, a stratified random sample, how is this return on investment? a former senior IRS official said of Comey.

The Taxpayer Advocate Service, the IRS’ internal consumer rights watchdog, has for years been asking Congress to compensate taxpayers chosen to participate in a research audit because many people spend hours obtaining financial documents for reviewers and often hire a lawyer because they feel intimidated in dealing with it.

“These people, they weren’t selected because you had concerns,” said Nina Olson, who served as a national taxpayers’ advocate from 2001 to 2019. “They’re really doing a public service.”

The research agenda, say IRS insiders, is seen as a boring necessity within the agency. When the tax collector launched the program in 2001, it sent highly trained enforcement officers to examine nearly 15,000 taxpayers each year. The depth of the study frustrated officers, who weren’t reaping revenue, and members of Congress, who received complaints from constituents about the program’s invasive nature, according to a former senior IRS official who said spoke on condition of anonymity to discuss sensitive internal discussions.

Details of the research program are being tightly held as the agency fears that information leaks on topics investigated by the IRS could embolden would-be fraudsters.

In recent years, the tax agency has surveyed between 4,000 and 5,000 taxpayers, a significant drop that experts say is indicative of the IRS’ chronic lack of resources and its distance from enforcement activities, particularly against high earners.

In 2019, the latest year for which data is available, 53% of individual enforcement audits were conducted against taxpayers with incomes under $50,000, according to the Taxpayer Advocate Service, and 8 in 10 filers requested anti-poverty tax credits.

Jeff Stein and Lisa Rein contributed to this report.

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