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Auditing

Congress to Grill IRS Chief on Audits of Former FBI Officials

Tim Shaw  

Tim Shaw  

Congressional tax-writing committees will meet with the head of the IRS this month to glean information on the nature of intensive audits into the tax returns of former FBI top brass.

Lawmakers from both parties have questioned whether former FBI director James Comey and his second in command, Andrew McCabe, were truly selected at random for so-called research audits performed under the National Research Program.

It was reported last week that Comey and McCabe, who were both removed from their positions by then-President Donald Trump in 2017, were audited under IRS Commissioner Chuck Rettig’s watch, albeit for different tax years. See Lawmakers Seek TIGTA Review of Possible Targeted Audits (7/11/2022).

Senate Finance Committee Chair Ron Wyden, an Oregon Democrat, said in a statement that this fact pattern rasises “serious concerns about the possibility that former President Trump encouraged the IRS to investigate his perceived enemies.”

Rettig, asserting that the audits had been conducted without his knowledge, “personally” requested that the Treasury Inspector General for Tax Administration review the matter, IRS spokesperson Jodie Reynolds told Checkpoint. Democrats and Republicans largely agree that targeted audits should be investigated, but views differ along party lines as to whether Rettig was personally involved and should continue leading the IRS. Reynolds previously said it was “ludicrous” to suggest the IRS audits specific individuals.

A closed-door meeting will be held between Rettig and the Senate Finance Committee in two weeks. “The IRS will be briefing the committee on the agency’s audit program on July 26,” Wyden’s statement confirmed. “Members will have the opportunity to ask questions and hear directly from the commissioner.”

The House of Representatives Ways and Means Committee will also meet with Rettig this month, Reuters reported. Like the Senate meeting, the House session is to be conducted in private because the IRS can’t publicly discuss matters concerning individuals’ tax information.

According to the IRS, the National Research Program (NRP) serves to “collect data on reporting, payment and filing compliance that supports strategic decisions about the placement and type of resources necessary to effectively address the needs of taxpayers. The office of the National Taxpayer Advocate said in its 2021 “Purple Book” that “taxpayers audited under the NRP are bearing a heavy burden to help the IRS improve the effectiveness of its compliance activities.”

The taxpayer advocate described those subjected to research audits as “guinea pigs” and recommended that audits resulting in no changes to the return should reward the audited taxpayer with a credit or other compensation. Assessment, interest, and penalties from NRP audits should be waived if there is no clear intent of tax evasion, the taxpayer advocate suggested.

TIGTA, the federal body responsible for independent oversight of the IRS, publishes to its website highlights of investigations and makes reports on specific IRS operations available. However, TIGTA has been tight-lipped as to whether it will look at whether Comey and McCabe were unlawfully targeted for tax examination. It’s unclear how long such an investigation would take, or how many details would be publicly disclosed.

“Commissioner Rettig always welcomes a chance to meet with members on tax issues and routinely flags areas of potential concern for key leaders of congressional oversight committees,” Reynolds said.

 

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