TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, November 30, 2016

The IRS Scandal, Day 1301:  If Koskinen Is Impeached Or Fired, Trump Could Appoint New IRS Commissioner To Go Easy On His Taxes

IRS Logo 2USA Today, Trump Faces Potential Decision on IRS:

President-elect Donald Trump could face a decision that may affect whether his tax returns will continue to be audited throughout his four-year term of office.

IRS regulations call for annual audits of tax returns filed by U.S. presidents and vice presidents. But those rules, in place roughly 40 years, theoretically could be changed by the tax agency — whose current leader is under fire from Capitol Hill. ...

Trump has not publicly discussed future leadership for the IRS, which is part of the Department of the Treasury. ... 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.

IRS commissioners haven't always stepped down for a new White House administration. Shirley Peterson, appointed in 1992 by President George H.W. Bush, officially left as of January 1993, as Bill Clinton took office. But Charles Rossotti, appointed by Clinton in 1997, stayed on for the opening two years of President George W. Bush's first term following enactment of the law that established five-year terms for IRS commissioners.

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.

However, Robert McKenzie, a tax expert at the Arnstein & Lehr law firm's Chicago office, theorized that "a conscientious IRS employee would come forward and report it if someone tried to influence him or her on an audit."

http://taxprof.typepad.com/taxprof_blog/2016/11/the-irs-scandal-day-1301if-koskinen-is-impeached-or-fired-trump-could-appoint-new-irs-commissioner-t.html

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Comments

Calling Bob McKenzie an expert is an understatement. If any tax attorney knows what he is talking about, it is Bob. And he is exactly right. For a Commissioner to attempt to influence an examination at the level of Revenue Agent, orders would have to filter down through multiple layers of IRS management to the RA or RA team conducting the exam. It is absurd to think this could be done with a "wink-wink-nudge nudge" without it blowing up.

Posted by: Tim Kelly | Nov 30, 2016 8:57:05 AM

So... how is this different from any president?

Posted by: Oliver Shank | Nov 30, 2016 11:17:24 AM