Trump has a decision to make that could change how and if he discloses his tax returns while in his four-year term in office. IRS regulations call for annual audits of tax returns filed by U.S. presidents and vice presidents. Yet this rule is over forty year old, and was put in place during the Nixon administration.
The rules are included in the Internal Revenue Service Manual, which guides actions by the nation’s tax agency. It states that tax returns filed by the president and vice president “are subject to mandatory examinations,” and should not get less-rigorous screening. “The inclusion was made under the direction of career, non-partisan IRS compliance personnel,” Matthew Leas, the IRS chief national spokesman, said of the audit regulation. “Since then, this provision has remained in place during both Republican and Democratic administrations, as well as under IRS commissioners appointed by both parties.”
However, this rule does not have the power of being law and could be changed — potentially through the appointment of a new IRS commissioner. According to different media reports, he has considered several candidates for Treasury secretary, including Steven Mnuchin, the national finance chairman of his winning White House campaign, JPMorgan Chase CEO Jamie Dimon and Rep. Jeb Hensarling, R-Tex.
Though Donald Trump has not openly talked about the future of the IRS leadership, he did refuse to release his tax returns throughout the 2016 presidential campaign citing ongoing IRS audits for several years, he said he would make his returns public when the examinations concluded. Trump claims he he has been under audit now for 15 years.
Current IRS Commissioner John Koskinen, serving a five-year term that’s set to end in November 2017, has been under pressure from congressional Republicans angered by what they contend was the tax agency’s politically motivated delays of applications for non-profit status submitted by conservative Tea Party organizations. They say Koskinen misled Congress and obstructed committees that investigated the issue, allegations he has denied.
House Republicans started the process of initiating impeachment proceedings against Koskinen with a Judiciary Committee hearing in September. But no votes were held during the session. If he leaves through impeachment or resignation after Trump takes office, Trump would nominate a successor, subject to Senate confirmation.
“I serve at the pleasure of the President and a new President can always ask me to step aside sooner,” Koskinen said in part of a statement prepared for a House hearing in July.
In a move to guard against any interference with the IRS, a 1998 federal law makes it illegal for executive branch officials to ask the tax agency to initiate or terminate an audit or investigations, Leas said. Convicted violators are subject to a maximum $5,000 fine and five-year prison term.
Several tax law experts recently told Politico the statute wouldn’t necessarily stop the appointment of a nominee who might seek easier or tougher treatment of certain audits.
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