Document: Report on the I.R.S. Mandatory Audit Program for Presidents

II.

Cause for Concerns

Both as a candidate and once elected, the former President had frequently attacked the integrity of the IRS’s audit process. As a candidate, he stated that he “unfairly get[s] audited,” and asked, “Why is it that every single year, I’m audited, whereas other people that are very rich, people are never audited[?]” He also surmised that he was frequently audited “because of the fact that I’m a strong Christian, and I feel strongly about it and maybe there’s a bias.” When he was President, he continued to express skepticism about the integrity of the IRS’s audit system. The White House Press Secretary stated in October 2018 that “[t]he [P]resident and First Lady filed their taxes on time and as always, they are automatically under audit, which the [P]resident thinks is extremely unfair.”

Numerous investigative reports have revealed that the former President, through the complex arrangements of his personal and business finances, has engaged in aggressive tax strategies and decades-long tax avoidance schemes, including taking a questionable $916 million deduction, using a grantor trust to control assets, manipulating tax code provisions pertaining to real estate taxes, and extensively using pass-through entities. Media reports have also revealed that he benefited from massive conservation easements, and that certain of his golf courses failed to properly account for wages paid to employees, raising questions about compliance with payroll and Social Security tax laws. As President, he took pride in “brilliantly” maneuvering the tax laws to his personal benefit. Even as he was championing the Tax Cuts and Jobs Act of 2017, the former President referred to the tax code as “riddled with loopholes” for “special interests including myself.”

On February 7, 2019, the Committee’s Subcommittee on Oversight held a hearing on legislative proposals related to Presidents’ tax returns. Then-Subcommittee Chairman John Lewis explained that the Subcommittee was exploring, among others, two issues: “Does the public have a need to know that person seeking or holding the highest office in our country obeys the tax laws?” and “[I]s it fair to expect the IRS to enforce Federal tax law against the President who is the head of the executive branch and has final control of the agency?”

III. The Committee’s Authority For Review

Since there have been so few Presidents in the mandatory audit program, and the dates of any action taken would identify a particular President, the IRS asserted that no information could be provided to the Committee about the program without disclosing confidential taxpayer information. Thus, Chairman Neal requested access to returns and return information pursuant to Section 6103(f) of the Code to answer the Committee’s questions, address its concerns, and fulfill its legislative and oversight responsibilities.

A. The Committee’s Jurisdiction

The Committee is a standing committee to which the House has delegated broad legislative, investigative, and oversight authority over “[r]evenue measures generally,” and the “[d]eposit of public monies,” which encompass the Treasury, the IRS, and all aspects of the Nation’s tax laws and their administration. Rules X of the Rules of the U.S. House of Representatives.

5