A whistleblower alleging interference with President Trump’s tax return audits is almost certainly not employed by the IRS, a former IRS commissioner says.
Washington has been abuzz this summer after an August 20 House Ways and Means Committee Democrats court filing informed U.S. District Judge Trevor N. McFadden that a government employee had presented evidence of possible misconduct and inappropriate efforts to influence the Trump audit.
“It would be astonishing if [the whistleblower] were inside the IRS,” noted John Koskinen, who served as commissioner from 2013 to 2017. IRS executives and employees have taxpayer information privacy protections drilled into them from the moment they enter service, he told Tax Notes September 13.
Probably fewer than a dozen high-level, experienced IRS executives and auditors would even know the status of the president’s audits — and even mentioning it outside the auditor’s chain of command would be illegal, Koskinen said.
Six to eight IRS auditors, examiners, and revenue agents, including the deputy commissioner of services and enforcement, would likely be involved in the audits, according to Koskinen. Large Business and International Division auditors might be brought in because of the apparent complexity of the returns, and Small Business/Self-Employed Division examiners might be used, depending on the tax issues, he said.
Once a presidential tax return audit is complete, it’s closed without further notice or comment by anyone at the IRS, Koskinen added.
The Ways and Means Committee sued the Trump administration July 2 for copies of Trump’s tax returns. Democrats argued that they need to be sure the IRS is properly enforcing tax laws and regulations on the president and his businesses.
Separately, the House Intelligence and Financial Services committees in April asked Deutsche Bank, a long-term financial partner in many Trump enterprises, for the president’s returns. The bank informed a federal court August 27 that it could provide copies of Trump’s or his children’s tax returns in response to a House subpoena.
‘All Bets Are Off’
It remains unclear what evidence was presented to the Ways and Means Committee, or by whom, according to Dean Zerbe, senior policy adviser to the National Whistleblower Center.
“You can have people who seriously believe something’s going on . . . but then it doesn’t lead to a parade of horribles,” Zerbe said. Given the likely size and complexity of Trump’s tax returns, Ways and Means would be wise to consider turning everything over to a trusted, nonpartisan analyst, such as the Joint Committee on Taxation, to decide whether a whistleblower’s claims have merit, he said.
The Ways and Means Committee’s acknowledgment that it is in contact with a government informer is important in itself, Zerbe said, adding, “It’s incredibly serious to state that you have a whistleblower.” He noted that whistleblower protections, while still lacking, are stronger than ever.
Zerbe, a former tax counsel to Senate Finance Committee Republicans, said he has no idea who the whistleblower is. “When we’ve dealt with whistleblowers [through the National Whistleblower Center], they’ve usually already set themselves on fire and run around naked,” he added.
It’s unknown how the whistleblower presented him or herself to the committee, Zerbe said. Some informants seek redress first through their organization’s chain of command; others complain to their inspector general, or perhaps to a U.S. attorney, he added.
Also unknown are the whistleblower’s motives, which might be personal, professional, or political — or all of the above, Zerbe said. “All bets are off when it comes to the president’s returns.”
Who Knows?
Does the IRS know the identity of the alleged whistleblower?
“They might have a clue,” although a careful individual could remain masked, Zerbe said.
“If I were there [at the IRS], I wouldn’t be hunting for them,” Koskinen said. For the sake of the whistleblower’s rights, and for the integrity of official investigations likely to follow credible allegations, IRS managers wouldn’t want to be seen interfering with or intimidating witnesses, he said.
Zerbe said that, whatever their motivations, “whistleblowers who feel they’ve been heard [through the chain of command] tend not to go outside the organization.”
Koskinen noted that besides section 6103 taxpayer information protections and section 7213 prohibitions on unauthorized access to or disclosure of taxpayer information, the post-Watergate era saw bars placed on communications between White House officials and the IRS.
“I don’t know if anyone in 50 years has raised the issue” of interference in presidential tax return audits, Koskinen said. He added that he had never encountered anything similar during his years heading the tax agency.
“It would be extraordinary” if the whistleblower is alleging interference in the president’s tax returns by someone outside the IRS, Koskinen said. “‘Extraordinary’ in the sense that nothing like this has happened since Watergate.”