Trump made accountants easier on IRS taxes: Report

House Democrats Research Why the Internal Revenue Service failed to fully audit Donald Trump’s tax returns when he was in the White House, despite an agency policy mandating such a review.

Some insight into the shortfall came in a report Tuesday from the Joint Committee on Taxation (JCT), a bipartisan congressional group that examined Trump’s tax returns from 2015-20.

Part of the reason the IRS gave Trump the benefit of the doubt was that he used professional accountants for his returns, a practice widely used by wealthy individuals, the report said.

The use of accountants does not guarantee financial integrity. In fact, Trump’s own accountants dropped him this year after questions were raised about the accuracy of his reporting.

Despite a policy mandate that the IRS review the income of a sitting president, the agency didn’t begin auditing Trump until 2019 — two years into his presidency, and after Democrats took control of Congress.

JCD said in its report Report No IRS agents could be directly interviewed this week, but a review of its audit materials showed that the agent who performed a “preliminary risk analysis to determine the scope of the examination” of Trump’s 2015 returns “supported a limited scope.”

“In further support of the limited examination, the agent noted that the taxpayer engaged a professional accounting firm and consultant to prepare and file his tax return,” the report said.

In its decision, the JCD questioned why the IRS agent reviewing the return placed so much emphasis on the involvement of accountants.

“We also do not understand why the participation of a consultant and an accounting firm in the tax preparation would ensure the accuracy of the returns,” the report said. “We would assume this fact to be true of the income of most, if not all, high-net-worth individuals and do not believe that such individuals should be subject to limited audit on this basis.”

“It seems inequitable,” said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center, a Washington think tank who previously practiced tax law.

The IRS’s heavy reliance on, and respect for, professional accountants “explains how high the IRS is,” he said.

ProPublica reported IRS Audits the Working Poor in 2019 About the same rate as the top 1%In part because audits of wealthy Americans are more time-consuming and require more resources.

Rosenthal said he was most disturbed by information in the report that the IRS may have limited its investigation into Trump’s taxes due to “case sensitivity.”

The agency noted the “complex nature” of the review, given previous returns and how the revenue was linked to multiple Trump entities, but “decided not to use the expert referral system unless absolutely necessary in the practice network (due to case sensitivity). Therefore, no experts were appointed,” the JCT report said.

In other words, the agency assigned to the 2015 review had other options for dealing with the large, complex nature of Trump’s taxes, according to the JCT analysis.

The JCT report said the audit of Trump’s 2015 taxes was not part of the mandatory presidential review, but a review of Trump’s 2016 taxes was opened in 2019.

That audit listed more concerns and asked for more documents than the 2015 audit, but the JCT identified a dozen additional ways the company should have pressed for more information, including $40 million in deductions.

The JTC also blamed the agent conducting the 2016 audit for placing too much trust in Trump’s accountants.

“Although the IRS investigated more issues in 2016 than in 2015, we are not comfortable relying on professional tax preparation to ensure accuracy, and no experts appear to have been called in to assist,” the report said. “As the audit is incomplete, we cannot comment on the results of the audit.”

The IRS did not respond to a request for comment.

After the House Ways and Means Committee, the JCT report was released on Tuesday Voted To release Trump’s 2015-20 tax returns. Trump is the first president since the 1970s not to release his tax returns.

The returns were expected to be released this week, but Ways and Means Committee Chairman Richard Neal, D-Mass. He told reporters Thursday that they won’t be released for “the next couple of days” as employees redact more sensitive personal information. Documents.

Neil is Pressing the law Requires the IRS to publish and audit the president’s tax returns.

The returns were prepared by accounting firm Mazars Quit working for Trump And the Trump Organization raised red flags this year after investigations by the New York attorney general and the Manhattan district attorney over information Trump’s companies have been providing Mazars for years.

New York AG Letitia James later filed a filing A $250 million lawsuit He accused Trump and his company of inflating the company’s net worth by billions of dollars to get more favorable terms from banks and insurance companies. Decade of Financial Statements Made by Mazars.

In its resignation letter to the Trump Organization in February, Mazars Group general counsel William J. Kelly said: “We are writing to advise that Donald J. Trump’s financial statements for the years June 30, 2011 – June 30, 2020, should no longer be relied upon and to inform any recipients who currently rely on one or more of those documents not to rely on those documents. want

James sent a criminal referral to the IRS about his findings. A spokeswoman for the agency’s criminal division told NBC News in September, “IRS Criminal Intelligence (IRS-CI) receives tips about possible criminal activity from a variety of sources every day. Special agents review the information received for further criminal investigation. The agency did not confirm the existence of the hearings until court documents were made public.

Trump has pleaded not guilty, and his attorney has denied it Alina Hubba James said of the allegations, “We believe our judicial system will not stand for this unchecked abuse of power, and we look forward to defending our client against each of the attorney general’s meritless claims.”

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