Trump fired Comey and McCabe, making their taxes more interesting to the IRS

The tax audits that examined the returns of two former top FBI officials and opponents of former President Donald Trump are part of a little-known research program designed to help the Internal Revenue Service gather data on potential future tax fraud.

James B. Comey and Andrew McCabe, former director of the FBI and deputy director of the FBI, to inquiries from the IRS National Research Program regarding their 2017 and 2019 tax returns, respectively. These audits are designed to help the IRS obtain data on certain types of taxpayers who are more likely than others to report their incomes wrongly, even unintentionally, and are different from enforcement audits designed to arrest people for breaking the law. IRS algorithms select taxpayers for NRP audits from a group that disproportionately includes high-income taxpayers who are self-employed, generate revenue through sole proprietorship or from investments.

Comey and McCabe have been government employees for years, withholding expected salaries that were reported to the IRS along with withholding taxes, and he wouldn’t fall into those categories during that time.

But then Trump fired them — Comey in 2017, and McCabe in 2018. Comey wrote two profitable books and started giving paid speeches, and McCabe joined CNN as an on-air law enforcement analyst. These arrangements, say tax policy experts and former high-ranking officials with the IRS, would have made the two men more likely to be selected for a research inspection than they were FBI employees, because the group of high-income earners with such selective streams of income is so important. . smallest.

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 the matter.

IRS chief faces questions about audits of Trump’s enemies

Trump has been constantly angry with Comey and McCabe — advisers say they were at the top of his list of his proverbial enemies as president — and former officials have told The Washington Post that Trump has thought a lot about the need to investigate them. But former IRS officials said it would be difficult to use the NRA as a deliberate weapon.

By firing the two men, though, Trump has set up the couple to make a lot more money than they did at the FBI — and pushed them into a new tax bracket that the IRS examines more frequently than even well-paid government employees do.

The odds of the two men getting into search program audits by chance soon after Trump fired them may seem slim, but former top tax policy officials told The Post they were sure that was what happened — although they acknowledged it looked suspicious.

“We like to see patterns, so that’s what we see,” said Mark Mazur, a former assistant secretary of the Treasury for the Biden administration on tax policy who previously headed the IRS office responsible for the opaque research program.

To be sure, the idea of ​​using the IRS against political opponents came to the former president’s mind.

One former official said Trump, who is notorious for refusing to release his tax returns and claims they are under scrutiny, has regularly complained that the IRS has been “pain in the ass” over the years, and has been “incredibly well informed in past accusations that previous administrations have manipulated the IRS for political purposes.

A former senior official said Trump would shout that people should be investigated and reviewed, although none of the officials who spoke to The Post had ever heard Trump give specific orders to that effect. People spoke on condition of anonymity to describe the 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 story that conservative media has repeatedly focused on, although no evidence has emerged to support such This is a claim. He was saying that this person should be investigated, this person should be audited. “I never heard him give direct orders,” said one former official.

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

“He cared little about what the rules should be,” said one former official.

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

The agency has faced previous suspicions that its investigations were being used by political actors. Shortly after the 2012 presidential election, Mark Iverson, who served as the IRS commissioner during the George W. Bush administration, received a call from an investigative reporter about occasional enforcement audits of my assistant Mitt Romney, now a senator from Utah, And who was the Republican challenger to Obama that year.

“I said to the reporter, ‘Please tell me you have something more than individuals said they were under review shortly after the election,'” Iverson said. “The story never went well. Iverson said it would be impossible for the IRS to quickly begin a set of investigations.” After the presidential election, even if she wanted to. “Things happen, and in the political world they talk and conjure conspiracies.”

Research software includes audits that are intrusive and complex for taxpayers to deal with, but they are very different from the enforcement audits most people think of when they worry about hearing from the IRS.

Enforcement audits are conducted on specific individuals suspected of violating tax law. 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 the IRS suspects fraud. The agency uses the results to regularly reprogram enforcement programs so that it can more accurately pursue questionable activity in the future.

“The fact that in [National Research Program] Sample, stratified random sample, how is this payoff? ‘ a former IRS figure said of Comey.

The Taxpayer Advocate Service, the IRS’ internal consumer rights watchdog, has asked Congress for years to compensate taxpayers selected for a research audit, since many individuals spend hours purchasing financial documents for examiners and often hire a counsel because they are intimidated by the before processing.

“These guys, they weren’t chosen because you have concerns. They really do a public service,” said Nina Olson, who served as an advocate for the national taxpayer from 2001 to 2019.

IRS insiders say the research program is seen as a troubling necessity within the agency. When the tax collector started the program in 2001, he sent highly trained enforcement agents to screen nearly 15,000 taxpayers each year. The depth of the study frustrated agents, who did not recover revenue, and members of Congress, who received complaints from voters about the invasive nature of the program, according to a former senior IRS official who spoke on the condition of anonymity to talk about it. Sensitive internal discussions.

Details of the research program are kept closely because the agency fears that leaking information about topics the IRS studies could encourage potential fraudsters.

The tax agency in recent years has surveyed between 4,000 and 5,000 taxpayers, a significant drop that experts say indicates the IRS’ chronic under-resources and its pivot away from enforcement activity, especially against high-income earners.

In 2019, the last year for which data is available, 53 percent of individual enforcement audits were completed against taxpayers with incomes under $50,000, according to the Tax Lawyer Service, and 8 in 10 of those required anti-poverty tax credits. .

Jeff Stein and Lisa Ryan contributed to this report.

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