House Dems plan another swing at Trump over his taxes

House Democrats will keep the spotlight on their disclosure of former President Donald Trump’s tax information by taking up a bill Thursday that would require the IRS to audit presidents' tax returns and make reports of the audits available to the public.

The legislation stands virtually no chance of passing the 50-50 Senate, making it a largely symbolic move. But it affords Democrats one more chance to give Trump a high-profile punch before they surrender their House majority to Republicans in January.

The House Ways and Means Committee disclosed information Tuesday showing that Trump paid little, sometimes nothing, in federal income taxes between 2015 and 2020 despite reporting millions in earnings. The panel issued a second report saying the IRS didn't audit Trump's returns during his first two years in office despite internal guidelines requiring audits of sitting presidents.

The House Democrats’ plan would require the IRS to produce an initial report within 90 days after a sitting president files returns, provide periodic updates on the status and give an estimated time for completing the audit, according to legislation sent to the floor on Wednesday.

The IRS would have to produce a report no later than 90 days after the audit’s completion detailing any adjustments or problems arising from the examination.

“This is a major failure of the IRS under the prior administration, and certainly not what we had hoped to find,” Ways and Means Chair Richard Neal (D-Mass.) said in a statement. “Our work has always been to ensure our tax laws are administered fairly and without preference, because at times, even the power of a president can loom too large.”

Trump filed his 2015, 2016 and 2017 tax returns during his first two years as president, which should have triggered an IRS examination of those returns under a Watergate-era agency policy, according to a report released Tuesday by the Ways and Means Committee.

However, the agency did not initiate an audit of any of the returns that Trump filed while in office until April 3, 2019. That was the same day that Neal first asked IRS Commissioner Chuck Rettig to provide Neal six years of Trump’s tax returns and any audits of those returns.

Only one such examination — that of the former president’s 2016 return — was flagged as a mandatory presidential audit. And three personal tax returns that Trump filed while in office for tax years 2017, 2018 and 2019 weren’t selected for scrutiny until after he left the White House.

The IRS hasn’t responded to a request for comment on the report.

The Senate’s chief tax writer, Ron Wyden (D-Ore.), who will remain chair of the Finance Committee in the next Congress, endorsed the House plan.

“There is no justification for the failure to conduct the required presidential audits until a congressional inquiry was made,” Wyden said in a statement. “I have additional questions about the extent to which resource issues or fear of political retaliation from the White House contributed to lapses here.”

Wyden said the Ways and Means committee’s report was further evidence that the agency desperately needed the $80 billion windfall that it received in August under the Inflation Reduction Act.

Republicans have lambasted the funding, saying it will be used by the IRS to go after small businesses, and are determined to try to claw back some of the money.

An internal IRS memo dug up by the Ways and Means Committee said it would not be possible with agency resources to examine every potential issue reported on Trump’s personal tax return, given it reported more than 400 pass-through returns.

Trump promised several times on the campaign trail to release his returns but later backtracked, saying he was being continuously audited by the IRS as a reason he couldn’t disclose his returns. That made him the first major party candidate since 1976 to not voluntarily release any of this tax information.

Although it is unclear whether Trump was subject to ongoing audits that were initiated before his inauguration, the IRS dropping the ball on mandatory presidential audits of Trump raises questions about his stated rationale for not releasing his taxes, former IRS Commissioner John Koskinen said.

“I suppose in retrospect you shouldn’t be totally surprised if that was erroneous information he was putting out since it wouldn’t be the first time,” Koskinen said.

He added that the agency’s delays on the presidential audit program are particularly troubling in light of the fact that the former president’s taxes were an issue since Trump announced his first bid for the presidency in 2015.