Finance

Treasury watchdog finds no Trump retribution evidence in Comey, McCabe audits

Audits of two top former FBI officials who became political foes of former President Trump were not the result of any misconduct on the part of the IRS, according to a report released this week by the Treasury Inspector General for Tax Administration (TIGTA).

The TIGTA report found that the audit selection process in 2017 and 2019, which were the years that former FBI chief James Comey and his deputy Andrew McCabe received especially intense National Research Program (NRP) audits from the IRS, was random and carried out correctly.

“Our assessment of the original sample selection process concluded that the IRS randomly selected TYs [tax years] 2017 and 2019 tax returns for NRP audits,” the TIGTA report found.

TIGTA said that IRS computer programs “categorized returns in the correct strata” and “correctly selected tax returns for audit.” The IRS “did not include malicious code that would force the selection of taxpayers for an NRP audit.”

Democratic lawmakers who had suspected that the audits received by Comey and McCabe were political retribution for not backing off the investigation into former President Trump’s political ties with Russia expressed satisfaction with the inspector general’s report.

“The credibility and integrity of the IRS are foundational to the success of our tax administration, and this report alleviates some concerns,” House Ways and Means Committee Chairman Richard Neal (D-Mass.) said in a statement to The Hill.

Neal has requested a deeper probe into Trump’s use of the IRS, writing in a Nov. 14 letter to acting IRS Commissioner Douglas O’Donnell that he was “very concerned about the Internal Revenue Service’s … selection of former Federal Bureau of Investigation (FBI) Director James B. Comey and Acting FBI Director Andrew G. McCabe for in-depth National Research Program audits.”

Neal said he wanted the IRS to “provide a report on whether each of these individuals has been selected for an examination, audit, or other compliance initiative at any time from 2017-2022.”

While TIGTA’s report found no foul play had taken place at the IRS in the selection process for NRP audits, it did not completely exonerate the agency and called attention to ways the IRS could have improved its sampling methods.

Specifically, it found that identification numbers for taxpayers being considered for audits were not properly documented during the sampling process, risking the possibility that specific people could have been included in the final sample who probably should have been thrown out.

“You can’t rule out definitively the possibility that somebody came in and decided to keep Comey and McCabe, assuming they were already in the original sample. Maybe somebody decided to keep them in when they cut down the size of the sample,” Eric Toder, former head of tax policy economists at the Treasury Department, said in an interview with The Hill.

“But I am 99.99 percent sure that there was no foul play here,” Toder added.

The TIGTA report also called out an error in IRS computer code dating back to 2010 that “assigned random numbers to returns in a manner that differed from the requirements in the NRP sampling plan.”

“As a result, the population of tax returns selected for TYs 2017 and 2019 were not all the same returns that would have been selected if the program assigned random numbers as originally intended,” the TIGTA report said.

“Because of the programming error, for most tax returns, the assignment of the random number erroneously restarted back at an earlier location in the random number file rather than continuing with the next number assignment,” the report found.

IRS officials said they were pleased with the inspector general’s findings.

IRS statistician Barry Johnson wrote in a memo that the inspector general’s office recognized the IRS’s “robust processes to ensure that taxpayers are randomly sampled for NRP audits.”

“While the report posits that it’s theoretically possible the new subsampling seed number could have been selected to ensure certain returns already randomly selected remained in the subsample, the report also states that there was no evidence of employee misconduct or improper selection in 2017 or 2019,” he wrote.

Overall, the TIGTA report found that IRS processes “worked as designed,” which it said “reduces the ability to select specific taxpayers for an NRP audit.”

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