Comment The tax audits that examined the statements of two former senior FBI officials and opponents of former President Donald Trump are part of a little-known investigative program designed to help the Internal Revenue Service gather data on possible future tax fraud. James B. Comey and Andrew McCabe, the former director and deputy director of the FBI, were investigated by the IRS’s National Investigative Program for their tax returns from 2017 and 2019, respectively. These audits are designed to help the IRS capture data on certain types of tax preparers who are more likely than others to misreport their income, even unintentionally, and are different from enforcement audits designed to catch people for violation law’s. IRS algorithms select taxpayers for National Research Program audits from a pool that disproportionately includes high-income taxpayers who are self-employed or who generate income through sole proprietorships or investments. Comey and McCabe were public servants for years, drawing predictable salaries that were reported to the IRS along with withholding tax, and would not have been included in those categories during that time. But then Trump fired them — Comey in 2017 and McCabe in 2018. Comey wrote two lucrative books and began giving paid speaking engagements, and McCabe joined CNN as an on-air law enforcement analyst. Those arrangements, tax policy experts and former high-ranking IRS officials say, would make both men far more likely to be singled out for investigation than they were as FBI employees, because the high-income group with such selective income streams is significantly smaller. The rare checks were first reported by The New York Times. Lawmakers and the IRS commissioner have asked the agency’s top tax authority to investigate. IRS chief faces questions about audits of Trump’s enemies Trump has raged about Comey and McCabe all the time — advisers say they were near the top of his list of proverbial enemies as president — and former officials told the Washington Post that Trump often thought they should be investigated. But former IRS officials said the National Review Program would be difficult to use as a deliberate weapon. By firing the two men, however, Trump set the pair up to make far more money than they did at the FBI — putting them in a new tax bracket that the IRS scrutinizes far more often than even well-paid government employees . The chances that both men joined the research program’s audits by coincidence shortly after Trump fired them may seem slim, but former top tax policy officials told The Post they were confident it happened — though they acknowledged that it looked suspicious. “We like to see patterns, so that’s what we’re seeing,” said Mark Mazur, a former Biden administration assistant Treasury secretary for tax policy who previously led the IRS office responsible for the puzzling investigative program. The idea of using the IRS against political opponents certainly crossed the former president’s mind. Trump, who refused to release his own tax returns and claimed they were under audit, regularly complained that the IRS had been a “pain” for him over the years, a former official said, and was “incredibly knowledgeable.” In previous accusations that previous administrations had hacked the IRS for political purposes. A former senior official said Trump would preach that people should be investigated and vetted, though neither of the officials who spoke to The Post said they ever heard Trump give specific orders to that effect. The people spoke on condition of anonymity to describe private conversations. “They did it to us,” Trump would say in 2017, accusing the IRS of conducting politically motivated audits of pro-Republican groups under President Barack Obama, a story the conservative media had often focused on, though no evidence emerged to prove support such a requirement. “He would say this person needs to be investigated, this person needs to be vetted. I never heard him give a direct order,” said one of the former officials. The IRS has worked for years to avoid giving even the appearance of political bias, though Trump administration officials said that would not deter the former president. “He didn’t care at all what the rules should be,” said one former official. Through a spokesman, Trump said he knew nothing about the McCabe and Comey audits, even as he criticized the two men. The agency has faced previous suspicions that its tests had been exploited by political actors. Shortly after the 2012 presidential election, Mark Everson, who served as IRS commissioner during the George W. Bush administration, received a call from an investigative reporter about random enforcement audits of two aides to Mitt Romney, now a senator from of Utah, who was Obama’s Republican challenger that year. “I said to the reporter, ‘Tell me you have more than what people said was under control shortly after the election,’” Everson said. The story never ran. Everson said it would be impossible for the IRS to quickly launch a series of investigations after a presidential election, even if it wanted to. “Things happen and in the political world they talk and invent conspiracies.” The investigative program involves audits that are intrusive and complicated for taxpayers, but they are very different from the enforcement audits that most people think of when they worry about hearing from the IRS. Enforcement audits are directed at specific individuals who are suspected of violating the tax code. Their purpose is to collect revenue and prevent further fraud. For investigative audits, taxpayers are randomly selected by an algorithm, and the procedures do not mean the IRS suspects fraud. The agency uses the results to regularly reprogram its enforcement software so it can more accurately track suspicious activity in the future. “The fact that it is in a [National Research Program] sample, a stratified random sample, how is that payback?’ a former top IRS official said of Comey. The Taxpayer Advocate Service, the IRS’s internal consumer rights watchdog, has been asking Congress for years to reimburse taxpayers who are singled out for audits, as many people spend hours procuring financial documents for examiners and often retain lawyers because they feel intimidated edit , process. “These people, they weren’t elected because you had concerns,” said Nina Olson, who served as the national taxpayer advocate from 2001 to 2019. “They’re really doing a public service.” The investigative program, IRS insiders say, is viewed as a nuisance necessity within the agency. When the IRS started the program in 2001, it sent highly trained court officials to examine nearly 15,000 taxpayers each year. The depth of the study frustrated agents, who did not recover revenue, and members of Congress, who received complaints from constituents about the program’s invasive nature, according to a former top IRS official who spoke on condition of anonymity. sensitive internal discussions. Details of the research program are being closely guarded because the agency fears that leaks of information about matters the IRS is studying could encourage would-be fraudsters. The IRS in recent years has investigated between 4,000 and 5,000 taxpayers, a significant drop that experts say is indicative of the IRS’s chronic under-resources and withdrawal from enforcement activity, especially against high-wage earners. In 2019, the latest year for which data is available, 53 percent of individual enforcement audits were completed on taxpayers with incomes of less than $50,000, according to the Taxpayer Advocate Service, and 8 in 10 of those applicants claimed tax credits of of poverty. Jeff Stein and Lisa Rein contributed to this report.
